The cost of housing is the # 1 challenge for newcomers to Silicon Valley
For most people, the hardest issue is the cost of housing in the San Francisco Bay Area. Whether buying or renting, it’s extremely costly here. Depending on where you’re coming from, it could be man, many times more expensive. Finding affordable housing is the # 1 challenge for people relocating to Silicon Valley.
How does it compare to other places? It is close to on par with New York City, about 50% more expensive than Austin, TX, and about 1/3 more than Chicago, IL. Check Sperling’s Cost of Living comparison to get a good sense of how it relates to your current home town.
Not only are the houses, condominiums, townhouses and apartments more expensive, but most of our homes are smaller too. Continue reading
In many areas of the U.S., real estate agents actively work the rental market. In those areas, owners are willing to pay a commission for the service, and houses and condos are listed in the local multiple listing service.
Not in Silicon Valley, though. Instead, it’s a land of “for rent by owner”. A few properties may be on the MLS (see link below), but hardly any. Far less than 5%.
Moving to Silicon Valley: is it possible to get a house here that’s as nice as the one you currently own?
I am frequently contacted by extremely bright, successful engineers or high tech professionals who are in large homes on large lots with great schools in less expensive areas of the country. They want to move here because Silicon Valley is the hub of innovation, our weather's great, crime's low and there's so much to do in this region. They know that housing costs here are extraordinarily high, but they hope that the salaries are commensurately high such that they can replicate the home & lifestyle they currently have – but put it here.
But that really doesn't work. Unless someone's relocating here from Boston, New York, Tokyo or Paris (or somewhere equally astronomically priced), the salary offered in Silicon Valley will not usually make that kind of housing duplication possible.
To move here normally means downgrading the house and paying more for it. Yes, incomes are a little higher but not nearly enough to match the discrepancy in real estate prices. I tell people, as a rule of thumb, that when you move here you will pay twice as much and get half as much. (Salaries? You get a little more. Not twice.)
Sometimes I get the comment "I don't want to move to Silicon Valley and have my family's lifestyle negatively impacted by having to live in a smaller house. I want the quality of life to go up, not down."
That is completely understandable. People who move here don't do it because of housing. Lifestyle often is better here. Shoveling snow? Forgetaboutit. We have 300 sunny days a year on average – if you love to be outdoors, your lifestyle will be far better here where the weather is subtropical. We have the Pacific Ocean an hour or less away, San Francisco an hour away, about 2 dozen wineries, theatre, museums, the Sharks, parks and trails. Our population is highly diverse and highly educated. Crime is low. There are a thousand reasons why the lifestyle here probably is far better than in other parts of the country… but it's not if you equivocate housing with lifestyle.