Silicon Valley real estate

San Francisco and Silicon Valley unemployment rates

The San Francisco and Silicon Valley unemployment rates are a huge driver of the SF Bay Area’s housing market. Today I saw real estate market info from the California Association of Realtor’s chief economist, Leslie Appleton-Young. One of her slides makes plain why the Silicon Valley real estate market is so crazy: our unemployment rate is extremely low, behind only San Francisco (where trying to buy a home is even worse than on the Peninsula or South Bay). Have a look at the data by California metro area:

San Francisco and Silicon Valley unemployment rates

San Francisco & Silicon Valley unemployment rates plus all of California

San Francisco and Silicon Valley unemployment rates plus all of California by metro area

As you can see, San Francisco has a screaming hot jobs market with only 3.4% unemployment. The San Jose metro area is only slightly cooler at 4.1%. (Unfortunately there are no “Cliff Notes” to tell where the San Francisco Metro Area ends and where the San Jose Metro Area begins – so I cannot tell if San Mateo County is lumped in with Santa Clara County to the south or San Francisco County and City to the north.)

With all this hiring going on, it’s no wonder that a frequent topic of conversation is Silicon Valley traffic patterns and congestion.  A few years ago, the rush hour traffic in the morning went from about 6:30 or 7am to 9am, and the evening commute times were about 4 to 7pm.  Today both are extended.  I find that Highway 85 in the “west valley” areas along Los Gatos, Saratoga, and Cupertino tends to still be pretty thick with cars even at 10am.  The return trip from Palo Alto (where I have some doctors at Stanford Hospital) can be sluggish as early as 3pm.

Worsening traffic from low Silicon Valley unemployment rates means that Silicon Valley real estate is even more expensive than usual for close-in locations.   Many San Jose area commuters spend an hour driving into work in the morning and 75 or 90 minutes driving home in the evening (for reasons I don’t understand, the evening commute is quite a bit worse than the morning one).   That translates to home prices being much, much more expensive than you’d expect in places like Mountain View, Sunnyvale and Santa Clara.   For a better quality of life, Silicon Valley employees will often pay dearly to get that shorter commute. If they can get the smaller commute and great public schools, the communities are the most expensive places to live, as is the case in Palo Alto, Los Altos and Los Altos Hills in particular.

Find Silicon Valley real estate and homes for sale in “close in” locations below

A sampling of the newest properties on the market – all price ranges – in the following areas:

Los Altos homes for sale

  1. 4 beds, 5 full, 1 half baths
    Home size: 4,629 sq ft
    Lot size: 21,997 sqft
    Year built: 2008
  2. 5 beds, 4 full, 3 half baths
    Home size: 4,520 sq ft
    Lot size: 11,761 sqft
    Year built: 2017
  3. 5 beds, 4 full, 1 half baths
    Home size: 4,304 sq ft
    Lot size: 15,550 sqft
    Year built: 2011
  4. 5 beds, 4 full, 1 half baths
    Home size: 4,509 sq ft
    Lot size: 17,641 sqft
    Year built: 2017
  5. 5 beds, 3 full, 1 half baths
    Home size: 4,700 sq ft
    Lot size: 14,418 sqft
    Year built: 1953

See all Los Altos, California Real Estate.
(all data current as of 5/26/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Palo Alto homes for sale

  1. 5 beds, 5 full, 2 half baths
    Home size: 7,145 sq ft
    Lot size: 23,522 sqft
    Year built: 1927
  2. 6 beds, 5 full, 2 half baths
    Home size: 9,322 sq ft
    Lot size: 1.80 ac
    Year built: 1929
  3. 5 beds, 4 full, 2 half baths
    Home size: 5,330 sq ft
    Lot size: 19,994 sqft
    Year built: 1913
  4. 5 beds, 3 full, 1 half baths
    Home size: 6,565 sq ft
    Lot size: 19,079 sqft
    Year built: 1906
  5. 6 beds, 6 full baths
    Home size: 4,469 sq ft
    Lot size: 12,414 sqft
    Year built: 2006

See all Palo Alto, California Real Estate.
(all data current as of 5/26/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Sunnyvale homes for sale

  1. 8 beds, 4 full baths
    Home size: 2,898 sq ft
    Lot size: 6,011 sqft
    Year built: 1961
  2. 5 beds, 3 full baths
    Home size: 2,418 sq ft
    Lot size: 8,015 sqft
    Year built: 1956
  3. 5 beds, 3 full baths
    Home size: 2,106 sq ft
    Lot size: 9,452 sqft
    Year built: 1962
  4. 5 beds, 3 full, 1 half baths
    Home size: 2,560 sq ft
    Lot size: 6,882 sqft
    Year built: 1963
  5. 4 beds, 2 full, 1 half baths
    Home size: 2,895 sq ft
    Lot size: 6,185 sqft
    Year built: 1966

See all Sunnyvale, California Real Estate.
(all data current as of 5/26/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Cupertino homes for sale

  1. 1 bed, 1 full bath
    Home size: 624 sq ft
    Lot size: 13.69 ac
    Year built: 1953
  2. 6 beds, 7 full, 5 half baths
    Home size: 6,089 sq ft
    Lot size: 10.95 ac
    Year built: 2016
  3. 7 beds, 5 full, 1 half baths
    Home size: 4,309 sq ft
    Lot size: 13,677 sqft
    Year built: 2017
  4. 5 beds, 3 full, 1 half baths
    Home size: 4,642 sq ft
    Lot size: 24,785 sqft
    Year built: 1984
  5. 4 beds, 4 full, 2 half baths
    Home size: 4,714 sq ft
    Lot size: 1.60 ac
    Year built: 2017

See all Cupertino, California Real Estate.
(all data current as of 5/26/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

 

Learn about some of the local Silicon Valley real estate markets:

Cupertino real estate market trends and statistics

Los Gatos real estate market trends by price point and high school district

 

List of homes for sale by price point

Below please find a way of searching for homes by price point in much of Santa Clara County.  Listings for all of San Jose are first as this area is about half the county.  Below that, many areas are represented (but this is not all of the county).  Please use the Quick Search, immediately below, to see all possible results.

 

 

San Jose (all areas)

 

What does it take to buy a home in Silicon Valley?

Graphic of people running to an open houseYou’ve probably heard that buying a home in Silicon Valley is a bit like purchasing real estate in Manhatten, London, Tokyo, Paris, or other regions where the prices are in the stratosphere.  It’s true. It’s a strong seller’s market.

And yet, every day, homes are bought and sold in the San Jose – Palo Alto – Foster City area.  They aren’t all cash; perhaps 20-30% are bought without any loan or mortgage, but the rest of the properties are sold with some sort of financing.

Here’s a quick summary of what is needed to buy a house, condominium, or townhouse in Silicon Valley (this list applies MOST of the time and with few exceptions):

  1. A large down payment is needed – usually 25% or more – to win in the multiple offer situations which are the norm right now.
  2. Nerves of steel: it’s scary to buy a house, but here, many homes are purchased without the normal contingencies for loan, appraisal or inspection.  (But home sellers do provide a full battery of inspections that you can review before making your offer in most cases.)
  3. The ability to move quickly and decisively as the best homes sell very, very fast – often in a week to nine days.  In the last 30 days, there were 385 houses which sold and closed in the city of San Jose.  Of those, 282 went under contract and became pending sales in 14 days or less.   That’s 73%.    In Sunnyvale the numbers were 47 and 47, so 79%.  Here you need to be 110% sure.  If you give off signals that you are hesitant, your offer is unlikely to be accepted.
  4. It’s a big help if you have a really good Realtor who’s known, liked and respected in the local real estate community.  Listing agents will prefer to work with an agent who’s trusted. In some areas, like Palo Alto, many homes sell “off market” and then the full inventory tends to be known only by those local and trusted agents.
  5. A strong lender, especially if you are coming from abroad, who’s experienced in tracking work history, credit, etc. in other countries (and in some cases other languages). Don’t just walk into a bank and pick someone.  Get a good recommendation, either from someone at your company who’s had a similar experience or from your Realtor, who should be used to working with international home buyers.
  6. Being clear on priorities and being able to put them in order is crucially important.  It’s usually not possible to get everything on the wish list and also get it in budget.  So decide which is most valuable to you: schools, commute time, home type (perhaps you can get what you want, where you want – but only if you buy a condo?), commute time or?

Those are the key ingredients.  Perhaps the hardest one, when getting started, is the last one.  Let’s talk about that.

Priorities list: pick any 2 out of 3

A request I often get is to find a nice sized home and yard in good shape with good schools and a commute to Palo Alto that’s under an hour.  So far, so good.  Then comes the desired price tag: under $1,200,000 or under $1,500,000.    You can get the home, yard, schools, and commute, but it won’t be under $1.5 million for a good sized, remodeled house and a big yard with better schools.   The price tag fitting that description is probably closer to $2 million due to our clogged commute routes.

One of the best areas in terms of schools and pricing is Cambrian, which is a part of San Jose, with either the Union School District or the Cambrian School District.  You can get a Cambrian home with good schools for under $1.4 million and it will have a decent sized lot, be in good condition, etc.  But the morning commute to Palo Alto will likely be a little more than an hour, and the evening commute perhaps 80-90 minutes, depending on where in PA or Cambrian you’re going and what time it is.  A nice house in east Los Gatos with the same schools but more house and yard will probably run around $1,700,000 to $1,800,000 for 2500 SF on a 10,000 SF lot.

Cupertino has great schools but the houses there tend to start at around 1.5 million – so if you are ok with a townhouse or condo, that might work.

The upset as reality sinks in

Most home buyers, even if they’ve studied the market here intensely before arriving, go through some strong emotional stages as they learn the real estate ropes and what their budget can and cannot buy.   Sometimes the main shock hits before arriving, though.  Recently I got an email from someone moving here from the south, who lamented the situation with a question along these lines:  “can you explain to me why home prices in Silicon Valley are 5-6 times more than they are in Atlanta?”  It is that bad, yes, and I am sorry.  It is upsetting.  The faster you can move through the shock and upset, the sooner you’ll be able to clear the emotional clutter and buy that next home and really settle in.

Focus on the positive

The good news is, aside from the cost of housing and the traffic, San Jose – Sunnyvale – Los Gatos and whole Silicon Valley region really is a wonderful place to live.  We enjoy 300 sunny days a year on average.  San Jose has often been named the best place to raise kids.  The intellectual climate cannot be beat as we have great minds from all over the world here.  The coast is close, and so is San Francisco.   If you do buy a home, appreciation may be substantial, far more than in most of the U.S., if you can “buy and hold“. (We’ve had a lot of real estate corrections and downturns since the 1940s, but look at some old Los Gatos real estate home prices then and see the buy and hold value at its best.)

How’s the Silicon Valley real estate market?

What’s going on with the Silicon Valley real estate market? Is it as crazy as ever with multiple offers, overbids, and few or no contingencies?

In many cases, yes – especially in the more affordable price points in areas with good schools and shorter commutes. Those areas are the ones most in demand.    And as before, comparing the three counties (San Mateo, Santa Clara, and Santa Cruz), San Mateo is the most expensive and overall it becomes less expensive in Santa Clara County, then less expensive still in Santa Cruz County.  Alameda County has a little of Silicon Valley, but that area is in a totally different MLS system so is not part of this analysis.

What does it cost to buy a house in Silicon Valley?

In Santa Clara County (home to Palo Alto, Cupertino, Sunnyvale, Mountain View, San Jose, and my own Los Gatos), the average sale price is about $1,150,000 and the median sale price has been bouncing around in the $900s range for the last few month.

In San Mateo County (home to Redwood Shores, Foster City, Menlo Park, San Mateo), the average sale price is in the range of $1.4 to 1.5 million for houses recently sold.  The median is a little lower, closer to $1.2 million.

In Santa Cruz County (Santa Cruz, Scotts Valley, Aptos, Capitola, Soquel), it’s more affordable.  The average sale price of houses recently has been in the 800s, and the median sale price has been right about $700,000.

How is the year over year appreciation in these different parts of Silicon Valley?

Naturally, it’s easier to buy near Santa Cruz than in San Jose, but the demand tends to remain stronger in the areas with the jobs as opposed to the coastal communities, so appreciation is usually stronger in the areas where it’s hardest to purchase.   That seems to be true in a very similar way in San Mateo County, too – yes, it’s less costly to buy in Half Moon Bay, and in an up market it’s great, but in a down market it will not fare as well as Belmont, San Mateo etc.

Santa Clara County
http://rereport.com/scc/print/Mary.PopeHandySCC.pdf

Santa Clara County – prices up over 2014 by 6-8% appx

RE Report ANNUAL SCC Chart 2016-1-25

  • Median home prices increased by 7.9% year-over-year to $917,000 from $849,975.
  • The average home sales price rose by 6.4% year-over-year to $1,157,360 from $1,088,090.
  • Personal note: appreciation in this range is fairly sustainable, as compared to the appreciation in 2014, which was closer to 20%.  Double digit appreciation is usually a little worrisome since it often is not sustainable.

2016-02-01_Annual RE Report for Santa Clara County

San Mateo County
http://rereport.com/scc/print/Mary.PopeHandySMCannual.pdf

San Mateo County – prices up from last year

  • Median home prices increased by 21.9% year-over-year to $1,170,000 from $960,000.
  • The average home sales price rose by 3.7% year-over-year to $1,482,950 from $1,429,870.

Santa Cruz County
http://rereport.com/scc/print/Mary.PopeHandySZCannual.pdf
Santa Cruz County – prices off year over year

  • Median home prices fell by 0.4% year-over-year to $700,000 from $702,500.
  • The average home sales price dropped by 10.4% year-over-year to $801,516 from $894,204.

Within all of these market areas, there are hotter and cooler locations, school districts, price points, etc.  Often there are work arounds to maximize the sale or purchase of a property.  For instance, some homes have a pool that eats up the whole yard.  That might make a home difficult to sell, so perhaps you can buy it without competing against so many offers – and then remove the pool later.  Often the “fixes” are not as costly as you may think.

Want to buy or sell in Silicon Valley?  Please reach out to me. I’d love to chat with you about it and see if we might work together.

Silicon Valley housing prices and the emotional stages they’ll put you through

Stages of Silicon Valley real estate sticker shockGetting over Silicon Valley real estate sticker shock happens in stages.

First there is disbelief or denial.  “It cannot be that bad – people are exaggerating.”  That’s followed quickly by “I thought it was bad where I used to live!”

Then there may be outrage (anger is too mild a word): “Why would anyone pay that to live there?”

Next, a little bargaining: “What’s the work around? Are there any bank owned homes?  How about something older – I don’t mind a 15 year old house…” (To us, that’s a young house, by the way.) “What about buying a lot and building?”  Or the commute negotiation “I thought I had to be within 15 minutes, but I could go 30.”  A typical commute might be 30 minutes in the morning, but 45 in the evening.  Many people have worse than typical, though, as they want a bigger, nicer home, better schools, quieter location, etc.

Depression soon follows suit.  This may be accompanied by “We just cannot do it” or “We are not willing to do that” (until they see that rents are $4000 for a smallish house in an only OK area and $6000 per month for a decent sized home in a good area.)

Acceptance comes at last.  It may lead people to decide to go all in, bite the bullet, and buy locally.  It may lead them to move way out of the immediate area and embrace an hourlong commute – or to take the Apple or Google bus to work, if applicable.  It could lead them to move to Seattle, Orange County or somewhere a little less overwhelming in terms of housing costs.

Prices are up 30 from 2 years agoSometimes people think they are at “acceptance” as they write offers which are habitually 5-15% too low.  In reality, they are actually still in the “bargaining” phase, hoping for a good deal amidst our raging seller’s market.  That doesn’t usually happen, so writing a lot of unsuccessful offers frequently leads to depression (and sometimes blaming their agent for their offers not going through, even when it’s clear at closing that their offer price or terms were the issue).

How fast can you get to acceptance and write a realistic purchase offer?  For people who could have bought 12 months ago but are still shopping now, that wait has cost them about 10% of their home price in many cases.  For those looking 2 years, it’s easily double that, and in some cases prices are up a full 30%.  That’s like setting a match to your entire down payment.

If you want to be a successful home buyer in this crazy Silicon Valley real estate market, you will need to get onboard quickly, because the longer you take to get to acceptance, the more expensive your final home will cost when the market isappreciating, as it has been for about 3 years now.  Time is money and nowhere is that more true than in the San Jose, Silicon Valley, or South Bay real estate market.

 

 

Looking for more Silicon Valley real estate resources?  Here are a few of my other sites, blogs, and market stats tooks:

popehandy.rereport.com – real estate statics for San Mateo County, Santa Clara County, and Santa Cruz County

popehandy.com – Silicon Valley real estate, Los Gatos real estate, info on many areas of the realty market in Santa Clara and San Mateo counties

SanJoseRealEstateLosGatosHomes.com – Santa Clara County real estate, special focus on San Jose areas of Almaden & Cambrian and also Los Gatos with info on the real estate market, neighborhoods, and more

LiveInLosGatosBlog – Los Gatos real estate, neighborhoods, events, businesses, parks. Many photos and neighborhood or subdivision profiles.

Welcome notes and a word about rental housing in Silicon Valley

Although normally I prefer to take photos than be featured in them or in videos, many of my Realtor friends from across the country have been telling me that our blog readers would like to see us on video (and not just read our typed words).  So I’m caving in – and saying hello!  Hope you enjoy this 4 minute video, shot from my home office in Los Gatos.

Mary Pope-Handy
Realtor,
CIPS, CRS, ABR, SRES
Sereno Group
214 Los Gatos-Saratoga Rd.
Los Gatos CA 95030
[Silicon Valley, California, USA]
1-408-204-7673
mary (at) popehandy.com
CA BRE # 01153805

CIPS - Certified International Property Specialist
CRS - Certified Residential Specialist
ABR - Accredited Buyer Representative
SRES - Seniors Real Estate Specialist

Helping nice folks to buy and sell homes in Silicon Valley since 1993. Mary Pope-Handy, Realtor, Silicon Valley
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Silicon Valley Real Estate: San Mateo, Santa Clara, Santa Cruz Counties, and especially
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Real estate in Santa Clara County, focused on west side communities of San Jose, Los Gatos, Saratoga, Campbell & nearby

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Listings by Price Range
Below please find a list of SOME of the popular Silicon Valley areas with listings offered by price range. This is not a complete list! Please use the "search" app to find ALL properties on the MLS.
Trends & Statistics

Click the link below to get real estate data for Santa Clara County, San Mateo County, and Santa Cruz County (together making up about 98% of "Silicon Valley").

Real Estate Market Statistics and Trends for Santa Clara County


Comps near any address in Santa Clara County
Listings and Sales Near Any Address in Santa Clara County

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