“Can I buy the same home in Silicon Valley?”
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, or ocasionally outsisde of the country. They want to move here because Silicon Valley is the hub of innovation, a center for jobs in high-tech, our weather’s great, crime’s low, and there’s so much to do in this region. The housing costs here are extraordinarily high here, but often these professionals hope that the salaries are commensurately high such that they can replicate the home and lifestyle they are accustom to elsewhere, but in Silicon Valley. It doesn’t work that way.
Unless you’re relocating here from New York, Tokyo, or Paris (or somewhere equally astronomically priced), don’t expect the salary offered in Silicon Valley will to go as far here as it would elsewhere in the world. I’m sorry.
Relocation & Silicon Valley: Downgrade to Upgrade
Downgrade the House, Upgrade the Price…
Most relocating homeowners can expect a home downgrade and a higher price compared to what they are leaving behind. Yes, incomes are a little higher but not nearly enough to match the discrepancy in real estate prices. This is even more true with the astronomical acceleration of the market that we’ve seen in 2021 and in early 2022. Even without a wild seller’s market I tell people, as a rule of thumb, that when you move here you will pay twice as much and get half as much. (While salaries might be a little higher, they are not usually double what you’d make elsewhere.)
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 the housing. They do it for the location and the style of living that this area offers.
… to Upgrade the Location and Lifestyle!
We have the Pacific Ocean an hour or less away, San Francisco an hour away, dozens of wineries, theatre, museums, professional sports (go Sharks!), and world-reknown parks and trails. Shoveling snow? Never! San Jose enjoys 300 sunny days a year on average. If you love to be outdoors, you can make the most of it all year long here where the weather is subtropical. Our population is highly diverse and highly educated, crime is low, not to mention it’s the center of the global tech industry! There are a thousand reasons why the South Bay is probably a major upgrade… but it’s not an upgrade if you equivocate your house with your lifestyle.
So if you are considering a move to Silicon Valley, expect to pay more, get less home, and move into an amazing community in a beautiful pocket of the world.
Related Reading from this and my other blogs:
Market Reports for Three Silicon Valley Counties
What can you buy for $1 million in Silicon Valley?
Comparing cost of housing in West Valley communities from Palo Alto to Los Gatos to Blossom Valley: what will a 4 bedroom home cost?
Here’s a quick look at home prices by high school district. This is a great way to get a broad sense of where it’s more affordable or more costly to buy a home in Silicon Valley!
First, the median home prices by high school district for single family homes (houses and duet homes) in Santa Clara County. (Click on the images to view a larger version of each).
The SP/LP figure refers to the sale price to list price ratio. When it says 117%, that means the home sold on average 17% over list price. Med DOM is the median Days on Market.
PLEASE CLICK THE IMAGE BELOW TO VIEW LARGER VERSION
Here’s the same information of home price by high school district, but from May 2021. This provides a pretty good sense of how strong appreciation has been over the last year.
Within each of these high school districts, there are more and less expensive areas. In the Los Gatos-Saratoga Joint Union HSD, for instance, some homes are in Los Gatos, some in Monte Sereno, and some in Saratoga – some have views and acreage, some are more modest. The figures are very broad.
Next, the same data but for condominiums and townhouses in Santa Clara County. These are far more affordable, but still very costly.
PLEASE CLICK THE IMAGE BELOW TO VIEW LARGER VERSION
The condominium and townhouse market has been strong, but nothing like the real estate market for houses.
Santa Clara County condo and townhouse home prices by high school district as of May 2021
Need other areas? I can provide San Mateo and Santa Cruz County data on request.
If you’re just moving into the area you may be wondering about the different housing markets for the greater Silicon Valley area. The counties are a perfect place to start!
Here are the real estate market reports for three major Silicon Valley counties (and where I’m most active in my work): Santa Clara County, San Mateo County, and Santa Cruz County. Generally, “Silicon Valley” is 95% within Santa Clara and San Mateo Counties, plus a little of Santa Cruz County and a small part of Alameda County. Alameda County uses a different MLS system, and I don’t usually sell there, so am not covering it in my reports. Each section below includes first the data for single family homes and then condos and townhomes for each region.
If you’re ready to dive a little deeper, I also provide regular monthly market updates on some of the popular communities within Santa Clara County over at my Valley of Heart’s Delight blog. Scroll the most recent ones here.
Early Winter 2021-2022: Three Silicon Valley Counties
Santa Clara County Real Estate Market Report for December 2021
First, Santa Clara County – home to San Jose, Cupertino, Sunnyvale, Mountain View, Palo Alto, Los Altos, Santa Clara, Campbell, Los Gatos, Saratoga, Monte Sereno, Milpitas, Morgan Hill, and a number of other cities and towns. This area has generally come up in price about 25% since December 2020, an unbelievable amount of growth! Homes sold nearly a full week faster this December compared to last year. Of course, it hasn’t been even growth.
While the 2019-2020 winter was particularly hot, it experienced a massive slowdown in market activity at the start of the pandemic, falling to it’s lowest point in Santa Clara County around May and June. This put pressure on the market by stifling spring activity and, over the course of the year, created a backlog of demand with severely low available inventory. Pent up activity is driving prices sky high and bolstering a heightened average sales to list price ratio, but inventory continues to fall while demand snowballs out of control! Santa Clara County is keeping up the momentum from a raging hot 2021 with hardly any sign of winter cooling!
And the condominium and townhouse report for Santa Clara County:
This December shows about a 12% rise in median sales price for condos and townhomes since this time last year, a 4% rise in the average sales to list price ratio, a much faster market absorption rate, and a slightly higher volume of closed sales despite having only a quarter of the inventory compared to last December!
Fire season is a concept we are familiar with in the West Coast, but it may be foreign to those moving here or living far away.
Not long ago I was on the phone with a cousin from the East Coast. That area had recently been hit by Tropical Storm Ida and over here we were being smothered by the smoke from the Northern California fires (Caldor, Dixie, Tamarack and some others). Aghast at enormity of it all, my cousin asked the poignant question, “has there always been a fire season, or is that a recent thing?”
Briefly, yes, California has always had a fire season.
One major reason people (myself included) love California is for its mostly dry Mediterranean, subtropical climate. However, that ideal dry hot summer climate is also a perfect tinderbox. Without summer rain, the grasses and annuals die off and many native perennials go dormant. Dry hot winds, frequent from around August through October, dry out the landscape even more. By this time, an open hillside is A-grade kindling – one little spark and it’s a recipe for disaster.
Even in wet seasons with no drought, the summer will always be hot and dry with a high risk of ignition. So while fire season is nothing new, it’s longer and much worse than it used to be.
Fire and California Homes
For California homeowners and buyers, the increasing fire danger is strongly felt. Most buyers tell me they do not want to be in high fire risk zones, but might not always know what to avoid. State and local governments have put more preventative regulations in place to keep homes safe from wildfire, both on builders and homeowners.
If you are relocating to Silicon Valley, you may be wondering what the risks of wildfire are like for this area. There are plenty of resources available online, and I always recommend clients to look at the hazard maps such as those listed in my article Tools You Can Use When Relocating to the San Jose Area. While the mountain and foothill communities may be at risk of wildfire, even the lowlands are experiencing another concern that comes with harsher fire seasons: smoke and air quality.
In my other blogs I have more articles dedicated to the topic, so I won’t go into detail here. I encourage you to view some of my articles about Fire at the Live In Los Gatos Blog or over at the Valley of Heart’s Delight blog under the Natural Hazards and Safety categories if you’re interested in learning more.
Some of the oldest trees living in California have the scars of past fires, sometimes multiple. Native plants have evolved and adapted to fire and can thrive in its shadow. And for as long as people have lived here, they have contended with seasonal fire danger.
Fire season 2021 has come to an end with the arrival of rain – a double bounty since we are in the middle of a severe drought. When the rains come, the problems aren’t over, though. In burned out areas, the next challenge will be mudslides and further damage to the fire zones. This is an old problem also, I remember hearing about the mudslides following the fires as a kid growing up in the 60s and 70s.
“Fire hardening” is an important concept for those of us who live in or near large open spaces with hills especially. I suspect it will grow into a cottage industry with new experts appearing to advise or possibly install features which will make our homes and landscaping more resistant to advancing flames.
With soaring housing prices in Silicon Valley, newcomers and folks potentially relocating here may wonder what can you buy for $1 million or less in Silicon Valley? This article will provide a snapshot in time and provide a sense of whether your million dollar budget can get you into a house, a townhouse, or a condo – or perhaps “none of the above” – on the valley floor.
(Homes in the Los Gatos or Santa Cruz Mountains are generally more affordable, but will of course be farther out and are generally considered a specialty market. Not included will be mobile homes, as the space rents are often close to or more than $1,000 per month. Also not included are duplexes, which you’d be hard pressed to find many of under that $1 million mark.)
If you absolutely must buy a house, and the budget must be under $1 million…
If you absolutely must have a house or single family home, as opposed to a condominium or townhouse, there are a number of areas for you to consider in Santa Clara County, including
- Morgan Hill
- Certain districts in San Jose
- Alum Rock
- South San Jose
- Downtown and Central San Jose
- Santa Teresa
- and Alviso (including County pockets)
- the Los Gatos 95033 (mountains) area – which is vast and contains many small communities
The Los Gatos mountains area varies in price from one community to the next and right now that is a hopping market, I’m told. You can find information, including a list of mountain neighborhoods, on the page linked as well as the occasional market update. If you’re interested in buying or selling a mountain home here in the Bay Area, please reach out! I do some work in the mountains, and if it’s not a match I am happy to connect nice folks with trusted Realtors that are mountain market specialists.
To determine where someone could get into a house for under $1,000,000, I pulled the sales from the last 90 days (as of August 31, 2021) and looked at how many of the sales of houses for any given area were under that budget amount. In many places, there were zero – even if I looked back a full year! The areas below are listed in order of the average sale price for these “in budget” properties, though you might prefer to rank them by the average square footage or some other criteria.
(Trouble reading the image above? Click to view the full-sized photo.)
This doesn’t mean you can’t find something under $1mil elsewhere. San Jose’s Almaden Valley, Willow Glen, and Cambrian areas each had one sale under the million-dollar mark during the same time period, but these sales are significantly less common. When you see ratios of something like 3% or less of the houses sold are under that price point, it’s important to understand that those homes may be major fixer uppers, tear downs, or have a location issue or some other big challenge. But – perhaps you are handy, do not mind the property condition, location, extremely small size, or whatever the presenting issue may be.
Areas in Santa Clara County where a house is possible but unlikely, but a townhouse or condominium may work:
What does it cost to buy a single family home in the city of San Jose? There are many districts in this spread out city and their values vary by about 2 to 1 from the highest to lowest priced areas in this large, sprawling city with about 1,000,000 residents.
In this article we’ll take a look at the main, fairly well defined districts and discuss the cost of purchasing a house in each one. After each small description, there’s a link to a post on my popehandy.com website for that area.
You can also find relevant information on my Valley of Heart’s Delight blog, SanJoseRealEstateLosGatosHomes.com – just click on the “Neighborhoods” link.
Lastly, if you’d like to see a map of where these parts of SJ are located, please click on this link to find this article with a helpful map: San Jose is big and sprawling: where are the districts?
Fire season has been getting longer in Silicon Valley, and with it are smoke and air quality issues. The Bay Area is full of micro climates, and that translates to areas which are more or less impacted by these problems.
- windier areas, where the breeze blows from the San Francisco Bay or the Monterey Bay to inland areas may have the cleanest air if the fires generating the smoke are far away
- lower elevation areas may have less smoke if the blazes causing the smoke are far (distant fires seem to cause the smoke to be higher up)
Weather patterns, smoke and air quality
Please note, I’m not a meteorologist, but am going to share my observations from living here most of my life (except a few years from 18-23, I’ve been in this area).
Our Silicon Valley weather is dominated by the nearby Pacific Ocean. Most of the time, the coast enjoys foggy mornings and sunnier afternoons, and the inland areas are impacted by that. When the coastal overcast burns off, clouds recede from the Monterey Bay. In the mid to late afternoon, winds reverse, and breezes pick up. This is also true with winds coming off the San Francisco Bay and moving south along the Calaveras Mountains.
Wind patterns are key for the discussion around smoke and air quality.
Most of Silicon Valley is in the Santa Clara Valley. Valleys can trap air in what is called a heat inversion at times (a warm area prevents the air below it from moving around – we see this in winter sometimes). When that happens, we get a “Spare the Air” day and are asked to do what we can to help the air pollution problem. The coastal areas don’t have this issue, so usually don’t have smog. They have plenty of wind from the ocean. If there is a fire elsewhere in California, most of the time it does not impact the coast to the same degree as the inland areas.
As a general rule, when the fog is pushed in from the Pacific, it comes through any low points or passes it can find. The foggier areas to the north of Silicon Valley, such as Daly City and San Francisco, don’t offer much resistance to the push from the Pacific. Nearly always, coastal wind means cleaner air. (more…)
Moving to the San Jose or San Francisco Bay Area? You may be wondering what does it cost to rent a 1 bedroom apartment in Silicon Valley? (You can find a list of rental housing resources on this site here.)
The range in rental prices varies with location, condition, and amenities – exclusive or covered parking, air conditioning, dishwashers, a small yard for downstairs units, and pools are not all automatic.
- In general, it is very difficult to find a decent 1 bedroom for under $2,000 per month (but possibly as low as $1800).
- An average 1 bedroom is likely to run $2300- $2600 in most areas.
- It’s not hard to find one at $3,000 per month, especially in nicer and more in-demand areas such as Mountain View, Sunnyvale, Cupertino, Saratoga, and Los Gatos.
- If you move to one of the expensive areas and get to enjoy extra perks, you may be spending $3000, $3500 or more per month.
If you are working on a smaller budget, you’ll find a few studio apartments available and they will of course be more affordable. Apartments lacking air conditioning, pools, or other highly sought after amenities will also be offered for a bit less. Another option is to look a little further out and consider units without AC, pools, etc.
Apartment homes with a yard are renting for about 15% more than those with no outside space, from what I have seen.
Recently I saw a studio in West San Jose (fairly expensive area) for about $2100. The complex does have a pool, but the units don’t have air conditioning of any kind. I also viewed a 1 bedroom in Campbell for about the same price but it included a wall AC unit. It’s very similar to purchases in that if you get closer in, you get less home for your money.
A couple of things to beware of when looking for rental housing
Something to be aware of is that some houses have Accessory Dwelling Units that seem inexpensive, and often it’s because something is missing, whether it’s a decent amount of square footage, a kitchen will a full sized oven and stove, etc. Not long ago I saw such a place but the kitchen was really just a wet bar with a microwave and toaster oven. The old adage is accurate: if it sounds too good to be true, it is too good to be true. (more…)
Which cities are a a part of Silicon Valley? When people are considering a move to the San Francisco Bay Area, that’s one of the first questions asked.
Silicon Valley is not really a valley, though it did originally harken back to the Santa Clara Valley’s geography. The towns and cities which are included in Silicon Valley are primarily in Santa Clara County (by far the largest Silicon Valley city is San Jose), with San Mateo County also having a number of areas, with little snippets of Santa Cruz County and Alameda County.
While San Jose is the largest city in Silicon Valley, the epicenter of the region is probably Palo Alto – Mountain View – Sunnyvale.
This is an amorphous area. If you asked 10 different real estate agents, you might get 5 or 6 different answers, but I believe the list below would be agreed upon by most.
It is important to note that San Francisco is NOT in Silicon Valley. Many reporters get this wrong and report on Silicon Valley with stories out of SF. The regions are certainly related, and there are high tech companies in The City but they are distinct.
A list of which cities are part of Silicon Valley
In Santa Clara County (most of the county) – also known as the South Bay
- Gilroy – possibly
- Los Altos
- Los Altos Hills
- Los Gatos
- Los Gatos Mountains (not incorporated) – possibly
- Monte Sereno
- Morgan Hill
- Mountain View
- Palo Alto
- San Jose
- Santa Clara
In San Mateo County (bayside areas) – on The Peninsula
- East Palo Alto
- Foster city
- Menlo Park
- Portola Valley
- Redwood City
- Redwood Shores
- San Carlos
- San Mateo
In Alameda County – in the East Bay
- Possibly Newark, Hayward
In Santa Cruz County – not part of the San Francisco Bay Area (9 counties), but part of the Monterey Bay Area and the Central Coast
- Scotts Valley
- possibly Santa Cruz & Santa Cruz Mountains
Where is Silicon Valley?
Sometimes people relocating to Silicon Valley tell me that they’d like to move to a waterfront home with a view of the Pacific Ocean. Most of Silicon Valley is inland, though, separated from the ocean by the coastal mountains.
For those truly set on having a view of the Pacific, home can be found in the Santa Cruz area with lovely ocean and Monterey Bay views. The compromise will likely be a long, winding commute over Highway 17’s mountain pass. Or similarly, ocean lovers may settle close to Half Moon Bay or Pescadero, but will have to slog over the coastal hills on Hwy 35 each day to get to the Peninsula. (Some lucky souls may find employment in Scotts Valley or along the coast, but most of the jobs are not in these places.) If a faraway ocean view will work, making the Santa Cruz Mountains home may be the ideal fit.
If you want to live along the waterfront within Silicon Valley, there really are not a lot of neighborhoods from which to choose. Most of the water views involve the San Francisco Bay. There are a few rivers, creeks, ponds and lakes to be found as well, but enjoying lovely water views up close is not the easiest criteria to fill. Along the bay, though, it often comes down to Foster City and Redwood Shores, which we’ll discuss next. (more…)