Silicon Valley Pricing Snapshot

Today we’ll provide a few quick graphics to give you a Silicon Valley pricing snapshot on the counties where we sell homes. These will be ranked by the usual order of housing cost, from highest to lowest. (Sometimes they move “out of order”.)  After that, we’ll provide more resources from our other sites and blogs with a deeper dive on our main Silicon Valley real estate markets. We don’t cover all 9 of the San Francisco Bay Area counties, but here you’ll find 3 of them covered, and it’s a pretty good primer on the Bay Area housing market analysis.

Silicon Valley Pricing Snapshots

San Mateo County

San Mateo County is “The Peninsula”, the county just south of San Francisco and north of Santa Clara County and Santa Cruz County. About a quarter of Silicon Valley is in this area, generally. It’s normally more expensive than Santa Clara County, but once in awhile those two areas flip for pricing order. It’s a hot market in San Mateo County!

 

San Mateo County stats

 

For three of these counties, we have a newsletter with info by city. The data from Sereno (above) is a little different from the RE Report data for the median sale price. Here’s the San Mateo County real estate newsletter in PDF format (or go to popehandy.rereport.com to see all 3).

 

San Mateo County market stats by city or town - SFH

 

Santa Clara County

Santa Clara County, our home base, is the second priciest area in this region and is the heart of Silicon Valley:

 

Santa Clara County_MAY2024

 

Read the PDF for the Santa Clara County newsletter here. And the city by city market stats (much closer aligned for this county between the two data sets):

 

Santa Clara County market stats by city or town - SFH

 

 

We also do monthly market updates on communities within the Santa Clara County and more on our other blogs. Check out some of those market reports through the link.

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

Stages of Silicon Valley real estate sticker shockIt’s no surprise that housing prices in and around Silicon Valley are extremely high. So when moving to or purchasing a home in the area, know that getting over Silicon Valley real estate sticker shock happens in stages.

The 5 Stages of Housing Sticker Shock

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. Either you can and will buy locally, or you won’t. For some, coming to terms with our local market costs means they’re ready to go all in, bite the bullet, and buy locally. That may mean spending more or getting less than what you would like. It may lead others to move out of the immediate area and embrace an hour-long commute, or to take the Apple or Google bus to work, if applicable. Or perhaps they choose to rent indefinitely (although this can also appear in the other stages).

Alternatively, it could lead some people to move to Seattle, Orange County or somewhere a little less overwhelming in terms of housing costs where they can buy the home they want.

Burning Money While Housing Prices RiseMoving Through the Stages – Acceptance of Housing Prices

Progressing through the stages is often not a straight line.

Sometimes people think they are at “acceptance” as they write offers which are habitually 5-15% too low.  In reality, they are actually still somewhere between the “denial” and “bargaining” phases, either refusing to believe the market data or hoping for a good deal amidst our raging seller’s market. That “good deal” doesn’t usually happen. Writing multiple unsuccessful offers frequently leads to depression, and sometimes even blaming their agent for their offers not going through (outrage), even when it’s clear at closing that their offer price or terms were the issue, and they were recieving good guidance from their agent that was disregarded (denial).

So how fast can you expect to get to the acceptance stage and write a realistic purchase offer? Honestly, everyone will go at a different pace, but the sooner the better. 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, possibly more. For those who have been looking 3 years, it’s more than double that. At that point, it’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 is appreciating, 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.

 

 

 

 

 

Overbids in homes that sell fast

House at twilight with the words Overbids in homes that sell fastWe are in the middle of the spring market, and overbids in homes that sell fast are often sky high.  Today I just want to mention it since it’s worse than usual, even for Spring. That said, it’s not as bad as in the first half of 2022.

We periodically publish a pricing snapshot, but keep in mind that those are by calendar month, and often the best info is whatever went into escrow yesterday (recently pending sales). That data isn’t published, so it’s a case of learning what can be learned the old fashioned way: networking.

What is going on with overbids in homes that sell fast?

What’s causing these extreme market conditions?

  • Inventory is extremely low.
  • Most of what is for sale is from “have to sell” situations. Many of those properties are not super updated.
  • The recently remodeled, nicely updated segment of the market is probably 20% of what’s available. Buyers are mostly fighting for them.
  • It’s like there are two different markets: the white hot market for recently remodeled homes (that are usually listed low) and the market for homes that are not as updated and not priced too aggressively.

The overbids in homes that sell fast in Silicon Valley have to do with both the home’s condition and the home’s pricing position – think low. The lower the listing price, often the larger the number of competing home buyers and the larger the number of eventual bids. In some cases the offered list price is so low as to be a price mirage. If it looks too good to be true, well, you know.

How bad is it? For single family homes in Santa Clara County that sold / closed in the last week, the average sale to list price ratio was 111%, and the median was 109%.  That figure ranged from a low of 83% to a high of 151%. Often the properties with a very large number of bidders will get the super high offers.

It is deepening. I ran the same data for closed sales 8 – 18 days back and the average sale to list price ratio was 108% and the median was 106%. Month over month it’s been rising.
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The shock of Silicon Valley housing costs: how little you can buy on a huge income

Relocation Housing Costs: how little you can buy on a huge income in Silicon ValleyIf you’re relocating because you’ve just been hired as a high level executive at Apple, Google, Microsoft or any other high tech or biotech firm in Silicon Valley, you may be coming to the San Francisco Bay Area and Silicon Valley from an enormous home (5,000+ square feet) on an enormous lot (1 acre +). You are a raging success. You are highly regarded. You are on the top of your game. Your house “back home” displays your accomplishments. What about your Silicon Valley Home?

Housing Costs & Relocation

Set Your Expectations

You’ve heard that prices are bad here, but how much worse could they really be? Surely you could downsize a bit to a 3,000 to 3,500 square foot house on a half acre with a 20 minute commute, right? And you’d still have great schools for “resale value,” right? You are prepared to give up the full basement, the pool and tennis court and the 4 car garage. That is enough of an adjustment, isn’t it?

No, I’m sorry to say, it isn’t.

That house you are leaving behind in the suburbs of New York, Connecticut, Massachusetts, Chicago, Denver, Miami, Seattle, San Diego, or wherever you’re coming from is a super high end luxury home. It’s probably worth $1,500,000 to $2,500,000. But guess what? Here, in a nice area, that’s a 2,000 SF house on a 10,000 lot in a good area that’s a tear down. And in traffic, it could be a +40 minute commute.

Want an acre in an area with really good public schools at all levels? Think $4 million plus. And that doesn’t mean that the house will be turn-key. You will very likely have to remodel or personalize so that you are happy with it, as most of our houses were built between the 1960s and 1980s. (Here a 25 year old home is considered relatively young.)

Setting expectations is a battle of it’s own. If you’re having trouble coming to terms with the price of homes here and seriously want to buy, or maybe you’re wondering why your offers aren’t working out, you may find this article helpful for introspection: Silicon Valley housing prices and the emotional stages they’ll put you through. And if you aren’t already working with an agent, getting good professional help is one of the #1 ways to succeed in this market, so make sure you know how to find and keep a quality agent! We love working with our blog readers, so always feel free to reach out if you’re in need!

Why make the sacrifice to live in Silicon Valley?

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San Jose Districts and their Values

San Jose Districts Price Rankings Graphic January 2024 Landscape SMALL

Click to view full size.

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.

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?

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