Below please find real estate market reports for three Silicon Valley counties where I’m most active: Santa Clara County, San Mateo County, and Santa Cruz County. First we’ll provide the data for single family homes, then condos and townhomes, for each region. (“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.)
Late Winter 2020-2021: Three Silicon Valley Counties
Santa Clara County Real Estate Market Report for February 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 10% since last year, though in February the median sale price is over 12% higher in 2021 than in 2020! Homes took about a half-week longer to sell in February compared to January, but compared to 2020 they’re taking about a half-week less to sell. Of course, it hasn’t been even growth. While 2020 had a seasonally hot winter, it experienced major changes with the pandemic putting pressure on the market stifling spring activity and creating a sustained high demand with severely low inventory. Typical seasonal trends around this time are cooler creating a softer market, but pent up activity is higher than usual driving both prices and the sales to list price ratio above the norm. Santa Clara County is heating up for an early spring market without experiencing more than a hint of winter cooling earlier this year.
And the condominium and townhouse report for Santa Clara County:
This year shows about a 7% rise in sales price for condos and townhomes since last year, and a slight rise in sales price, list price, and active inventory from last month.
What does it cost to buy a single family home in the city of San Jose? There are many San Jose districts 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.
It can be challenging for people moving to Silicon Valley to get a sense of pricing for home buying. So to compare “apples to apples,” let’s take a hypothetical case of a 4 bedroom, 2 bath home of approximately 2,000 SF house (appx 185 square meters) and see how the cost looks in one area versus another.
Today I compared several cities and areas using the formula: single family homes of 1,800 – 2,200 SF, 3-5 bedrooms, 2-3 bathrooms, on lot sizes of 5,000 SF – 10,000 SF that have sold within the last 60 days. The prices listed are the average from sales in this criteria, so areas with a higher volume of sales will have more stable averages than those with less sales to analyze. DOM means “Days on Market”, the number of days a home was listed as available before pending.
Please note that this is a rough sketch of home prices based on averages taken across large, diverse residential communities. There are many factors that will affect market value beyond these boundaries.
Now, on to the chart.
The Cost To Buy A 4 Bedroom 2 Bath Home In…
I have arranged this chart in descending order by Sales Price. This is usually how I organize the data, and you can see certain markets shifting position, moving up or down the order depending on what’s hot. Since Los Altos had no sales in the last 60 days, I have left it where it was in the last chart but cannot offer any numbers. Scroll down farther to compare this chart against past years.
Before we get into analysis, here’s a chart from October of 2019 for comparison. Back in 2019 I switched to analyzing the market using a 30 day window instead of the 60 days seen above. This short window of time was due to significant price changes over the course of the year – first dropping in the 2nd half of 2018, and climbing again in the latter half of 2019. You can see a chart from early 2019 down below.
In the past, I’ve done similar studies, but using a larger window of time to even out any aberrations.
In most cases, the most expensive and desirable places have either the best schools or shortest commute location or both. Had I ranked these for school scores, you’d find that Cambrian is fairly high up and a good “bang for the buck” location – though not a super short commute for folks who work in Mountain View (though not so bad for people working in Cupertino). None of these is especially close to North San Jose (Cisco).
Palo Alto is a gorgeous, exciting area with all kinds of wonderful features – beautiful neighborhoods, lower crime, great schools, short commute. It is usually the most expensive area on this list. But unless you found a successful startup company or inherit a couple of million bucks, it can be hard to buy a single family home there. Many people would like to live in the shadow of Stanford University, but the budget just won’t allow it. What, then?
Please use the list above as a way to get your bearings on nearby areas in the South Bay (southern part of the San Francisco Bay Area). This is not an exhaustive list – it’s just most of the areas closest to Highway 85 or the West Valley Freeway. You can study various cities, downs, and districts within the region at my stats site, popehandy.rereport.com. (Free and you do not have to register unless you want email updates.)
Finally, it should be noted that one of the main drivers of home values is school districts. In the San Jose / Silicon Valley area, the school district boundaries do NOT follow the city or town boundaries. Los Gatos, for example, has 3 different elementary school districts, with varying scores which impact home values. So too with Saratoga and many other areas, San Jose especially! All this to say that the figures above are only ROUGH GUIDES. When you break it down to micro-markets, the picture changes more. But as a starter guide, I think you’ll find the above info helpful to give you a general idea of how far your money can go in home buying for areas in Santa Clara County from Palo Alto to Blossom Valley.
The Silicon Valley real estate market is notoriously expensive. It isn’t easy, but you can find a Silicon Valley house for under $1 million – if you are willing to drive a little further to those tech centers.
Tonight I did a quick search and found that it’s not too hard to find a 3 bedroom, 2 bath house with at least 1200 square feet in the south county and very scenic communities of Gilroy, San Martin, and Morgan Hill. Other possibilities are in the Santa Cruz or Los Gatos Mountains, south San Jose, Evergreen, and parts of east San Jose – among others. Here’s a map showing houses recently sold with the above listed criteria.
Most likely areas for finding a Silicon Valley house for under $1 million
When I loosened the criteria (such as showing all bedrooms), more homes and areas opened up, but some were very small, or needed a lot of repairs, or were in a 100 year flood plain, or had other issues.
The bottom line is that if your budget is $1 million or less, there are places that are likely to work – but probably won’t be in Sunnyvale, Cupertino, Palo Alto, or Santa Clara.
Want a shorter commute? You might want to consider looking at condos and townhomes for the more “close in” location.
San Jose apartment rental prices have softened during the coronavirus pandemic. Each month, ApartmentList.com produces a national and local report on rental market trends, including prices. If you are interested in renting an apartment, it’s a good idea to bookmark this page so you can circle back to it every few weeks. Apartment List National Rent Report
Here are some of this month’s highlights:
Rents in San Jose decreased by 2.9% month-over-month, and are down 12.2% since the start of the pandemic in March, the #5 biggest decline among the nation’s 50 largest cities.
Year-over-year rent growth in San Jose currently stands at -11.1%, the lowest rate in October of any year since the start of our estimates.
Median rents in San Jose currently stand at $1,777 for a 1-bedroom apartment and $2,111 for a two-bedroom.
How are the San Jose apartment rental prices as compared to other areas in the U.S.?
Here’s their graphic, but visit the link above to see the whole report.
If you’re relocating to the San Jose area, there are a few tools you can use for resources as you evaluate different parts of the region. When I started this website, I had books listed that you could purchase. Today, mostly I have websites that you should bookmark – for free!
Natural & Environmental Hazard Information Tools You Can Use
Natural hazards are found throughout the United States, often the major one people consider is the one hundred year flood plain. Here in the Golden State, we have some additional concerns relating to fire and earthquake risks.
California MyHazards can display a map anywhere in the state with information relating to liquefaction zones, earthquake faults, 100 year flood plains, and high fire risk areas.
Flooding from Dam Failure (potentially caused by earthquakes as well as other possibilities) is scary. Learn more about those zones at the link I’m providing here. (As of this writing, the Approved Inundation Maps link is not working.)
A Barclay’s Locaide will outline earthquake faults, flood plains, and other natural hazard zones you might want to know about. This is now out of date, but you may be able to locate a used one online or see if a local real estate association of Realtors bookstore has it available.
Something else to know is that there are state mapped earthquake faults (the more active ones, such as the Hayward or San Andreas Fault) and also the city, town or county mapped fault zones (for example, the Shannon Fault). The latter may have been dormant for 11,000 years or more.
Buying a home? Sellers usually provide a Natural Hazard Report, an Environmental Hazard Report, and a Tax Report from a company such as JCP. This same company / site has a great amount of information on local conditions on its About the Hazards page that newcomers would benefit from.
When buying a home in California, consumers are given a link to download brochures, or one combined document, on a variety of hazards. I’m not sure that most of them take the time to read it, but it’s excellent info and I highly encourage anyone living in CA, whether renting or owning, to read it: Homeowner’s Guide to Earthquake Safety & Environmental Hazards
Environmental Hazard Zones
Local concerns also include environmental ones, such as SuperFund sites. here you can see SuperFund sites in reuse (meaning offices and homes on those sites).
Some sites with spills, leaking underground storage tanks, or other issues can be found at this Cleanups in my community page (nationwide info)
Mercury, or quicksilver, was mined in Almaden (New Almaden and related mines) and east Los Gatos (Guadalupe Mine area) – it is a naturally occurring element in cinnabar. For that reason, creeks in those areas should not be entered or fished in.
Asbestos is another naturally occurring element here. It was prized for being somewhat fire resistant and was mined under Communications Hill. It’s something to investigate if you want to live in that area.
Oil, gold silver, and other elements were mined here as well as granite (we still have quarries active in Santa Clara County today, a couple in the Cupertino area and one in the hills by Lexington Reservoir just outside of Los Gatos). Some old mines are not mapped if they are on private land, so one of the disclosures we have relates to unmapped, abandoned mines., which may be found in more rural pockets of the county.
Other Priorities for the Tools You Can Use list
In addition to natural and environmental hazards, there are big plusses that will attract new residents.
A School District Map of the County with school district boundaries will be a big help to you here, as schools are the #1 thing that drive home values. You can buy one at bookstores or online for about $5
All four of these areas are known for good public schools, proximity to the coastal range, and a nice way of life. All but Cupertino have a quaint downtown area, and those three communities each have about 31,000 residents, while Cupertino is more than double that. For folks relocating to the San Jose area for work, most likely, all four will be considered if schools are a priority.
How quickly things can change. The novel coronavirus, or Covid-19, is growing at a quick speed in the US, and in Santa Clara County particularly. With the necessary Shelter in Place order across California, real estate has pretty much ground to a halt (see my related article on the coronavirus impact on real estate sales here).
Coronavirus: is work or a task essential or non-essential?
The crux of the matter comes down to what the government deems essential versus non-essential work or activity.
YES: Grocery stores, pharmacies, police, fire fighters, medical work, bankers, contractors doing home repairs (electrical, roof, plumbing) or residential construction, and title companies fall under essential. Walking one’s dog, getting exercise by walking, jogging, or biking are essential – but individuals must keep that 6′ social distance while doing so. Restaurants are essential but can only operate takeout food (link to article on my Live in Los Gatos blog about eateries offering meals and even groceries at this time). Home sales can get completed, thanks to the county recorder’s office accepting e-recordings. Notaries are allowed to meet with signers (but no real estate licensees or lenders present).
NO: Real estate in-person work is non-essential under this coronavirus order. Real estate agents must stay home, like everyone else. No showings, no appointments in person, no open houses, no meeting appraisers or inspectors. Movers are a no-go, too.
NO for now – may change? Home inspectors seem to be non-essential, but it’s possible that it could be changed a little as the home confinement for everyone continues. It would not surprise me if both inspectors and appraisers could work, but only alone, without buyers, sellers, or agents present sometime in the coming weeks. We Realtors are watching this carefully to see what happens. There’s a push for permitting virtual notarization that I suspect will go through (and become permitted at some point soon).
Appraisers are working for some lenders. Others are not. Today I got an update from my wonderful Wells Fargo lender: “For purchase and no cash out refinance, Wells Fargo will use Drive-By Appraisal report. We will prioritize the purchase appraisal order. ”
Is it possible to buy a home during the Shelter in Place order?
Technically, it is possible to get into contract right now. Closing during this coronavirus Shelter in Place period is another matter. What can happen is:
you may write an offer with your agent and sign it using DocuSign, Authentisign, or another electronic service
you can wire your initial deposit to the title company
you are able to review all of the disclosures, reports, and pre-sale inspections etc. and sign them electronically
you must meet with a mobile notary or escrow officer to sign the final documents
the title company can record the deed electronically
All of that is good, but what cannot happen right now, under the current order, is still a big hurdle:
Appraisers cannot visit the home (perhaps that will change?)
Inspectors cannot go to the property (may change?)
your agent cannot do his or her Agent Visual Inspection Disclosure (mandated, no work arounds exist)
you cannot visit the house or condo
I would not suggest that you buy a house sight unseen, which we call a blind offer. It’s dangerous and unwise. There’s enough danger with coronavirus alone without compounding it!
My belief is that this Shelter in Place will go on for 2 or 3 months as that is what the governor of California said last night. In that case, it would be practical to allow certain real estate functions to move forward in a limited way so that people can buy and sell. It would make sense to permit private showings with clients staying 6′ away from their agents, for inspectors to visit the property with no one else present, and same with appraisers.
There is a lot we do not know. With sales pretty much stopped, we don’t know where values are. Are they falling? Are they rising? There’s no data. With the stock market falling and unemployment rising, it seems like prices should fall in real estate, but we never really know until there’s a look into the past.
We don’t know how long the situation will last. Given that there’s no vaccine, and it will be 12-18 months before we get one, it’s probable that the Shelter in Place will not stretch that whole period. But it seems probable that there will be cycles of sheltering and more liberty based on the number of cases in any given area. I believe that we will have spurts of freedom and being able to sell and close escrows between periods of home isolation.
This is an unfolding situation that seems to be changing almost daily, do expect it to change along with the number of cases of coronavirus, hospitalizations, and deaths from Covid-19. Leaders know that residents do need to buy and sell homes, and they are working on a path forward.
Meanwhile, you can work on your pre-approval, or better yet, a pre-underwritten approval which will enable you to buy faster once that is more possible.
People coming from out of the area to relocate to Silicon Valley might not know what to expect from the weather in the San Jose, Santa Clara County, or Silicon Valley Area. Does this part of California ever rain? How hot is the summer? What is the climate like?
In a nutshell, this is a “sub-tropical” area, or a place that enjoys a mild “Mediterranean climate” that is most heavily influenced by the close proximity of the shoreline and the Pacific Ocean. Temps are mild, we get little rainfall compared to many parts of the country.
More specifically, we usually get about 10-20 inches of rainfall a year (less on the east and more on the west) and enjoy as many as 300 sunny days a year. Winters seldom see many hard freezes (but they can happen).
A typical summer day has highs in the mid to upper eighties but very low humidity – so it feels much cooler. Heat waves and heat inversions can run the temps up to the low to mid 100s in the hottest parts of the valley. Luckily it doesn’t happen much, or stay for long! Once in awhile, a rare storm in summer will bring high humidity and thundershowers, but for the most part, summers are dry. The hottest month is typically August.
The coldest month, usually, is December. A January day will often have a high in the 60s or 50s, depending. A cold day here is when it does not get into the 50s (not too common). By February, though, the worst is usually over and it’s even possible to have freak warm days that hit 80 degrees!
Our weather varies from year to year. Some years we get drought conditions and may require water rationing . Other years we get lots of wet weather from the Pacific – temps are warmer but there’s much too much rain: those are the El Niño years. Most often, though, winters aren’t that bad – evenings can be nippy as temps drop into the 20s on the worst nights in December or January. It will make the news that people should cover their citrus trees so they aren’t damaged by the freezing temps. (more…)
ApartmentList.com puts out a monthly report with data on the rental market here and all over the U.S. Of most interest is the going rate for rentals. This morning I received their update and below are a few of the main points on the rental housing market. The San Jose metro area’s median rent went up 1% over the last year per the article there. They write:
“Currently, median rents in San Jose stand at $2,113 for a one-bedroom apartment and $2,648 for a two-bedroom. San Jose’s year-over-year rent growth lags the state average of 1.1%, as well as the national average of 1.4%.”
San Jose metro area – cost of an apartment rental
San Jose rental costs as compared to other cities / towns in Santa Clara County:
Apartment list provides lots of interesting tidbits, such as Cupertino’s rent falling slightly this last year and Los Gatos having the fastest growing rental prices. Do check out the full report using that top link. It’s interesting to me how much more costly it is to rent in Cupertino than in other competitive areas such as Palo Alto, which also has great schools.
The median reflects the point at which half sold for more and half for less that price. When the median sale price goes down but the average goes up, it suggests not the homes are losing value, but rather that buyers are purchasing less expensive homes. For the condo and townhouse market, this can happen if the price of houses becomes more in reach. If you can afford a huge townhouse or a smaller house, many house hunters will choose the smaller house. Prices softened here after the peak of May 2018, so likely those on the cusp between the two choices of house or townome/condo opted for the single family home.
How does the rental market compare to other areas?
This chart is from the same source cited above. Here we can see how rental prices stack up in San Jose versus San Francisco (more expensive still) and other major cities – all the rest of which are less expensive. That said, New York City is very close to San Jose, just a hair behind.
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