Today we’ll provide a few quick graphics to give you a Silicon Valley pricing snapshot on the 4 counties where we sell homes. These will be ranked by order of housing cost, from highest to lowest. 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.
Santa Clara County
Santa Clara County, our home base, is the second priciest area in this region and is the heart of Silicon Valley:
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.
One of the simplest ways of assessing the real estate market is to check the absorption rate, often called the months of inventory.
In short, it tells you the pace of home sales (beyond the simpler days on market). It informs you:
- if you’re buying, whether or not you need to hurry or if you can take your time!
- if you’re selling, this figure tells you what the odds are of your success in the next month. That could impact your selling strategy.
What is the months of inventory, or the absorption rate?
The absorption rate tells us how quickly the current inventory will be absorbed, or sold off, if sales continue at the same pace and no new inventory were to be added.
The absorption rate could be measured in days, weeks, months, years, or decades – but the most common is the months of inventory. It’s really two data points in one: the available inventory and the number of sales in a particular period of time.
If this is hard to picture, consider a bathtub. If the tub is draining, how long will it take until the water is gone if the faucet is left off and if water continues to exit the tub at the same rate? That is the pace we are considering for homes for sale.
When homes are selling fast, in 30 days or less, often the data is described as days of inventory rather than weeks or months.
What is a fast absorption rate, and what does that mean for home sellers and buyers?
A balanced rate of sales suggests that neither home sellers or home buyers have a real advantage over the other. In the United States, anywhere from 4 – 6 months is considered balanced. Less than that is a seller’s market, and more than that is a buyer’s market. The lower the number, the hotter the market.
In Silicon Valley, though, it’s almost never as high as 4 months – though it can and does happen sometimes.
For us, anything under 2 months is a hot market, and anything under 1 month is a super hot seller’s market.
Here’s a graph displaying the absorption rate for houses in Santa Clara County between January 2005 and now. The highest absorption rate was 14.2 in January 2008. It fell quickly from there with the next month at 12.4, then 10.1 in March, and eventually settling in at around 6-7 months of inventory for a period.
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.
Summer 2022: Three Silicon Valley Counties
Santa Clara County Real Estate Market Report for July 2022
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.
If you’re having trouble reading any of the charts on this page, click to open the full size image.
The market is clearly cooling with longer days on market, fewer sales, and a falling median sales price.
Here’s a look at the AVERAGE sale price for houses (single family homes) since 2016. Imagine that the “average” home has gained almost $1 million in value in just 6 years!
Spring of 2020 experienced a massive slowdown in market activity at the start of the pandemic, but it didn’t last long. Stifled spring activity put added pressure on the market when it opened again, and while fewer sellers chose to list there homes for sale demand shot up! Over the next two years, this buildup of demand with severely low available inventory drove prices sky high as we watched bidding wars and overbids snowballs out of control!
Inflation is finally being checked and we’re seeing that number come down a hair. Despite improving conditions, Santa Clara County remains in a seller’s market.
And the condominium and townhouse report for Santa Clara County
While it had only half the sales of the single family home market, the condo and townhouse market is also experiencing similar trends.
Keep reading for updates on the San Mateo and Santa Cruz county markets.
Sometimes people relocating to Silicon Valley tell me that they’d like to move to a waterfront home, something with a view of the Pacific Ocean or the San Francisco Bay. Most of Silicon Valley is inland, though, separated from the ocean by the coastal mountains.
Ocean View Homes
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.
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 faraway ocean view will work, a home in the Santa Cruz Mountains may be the ideal fit.
Silicon Valley Waterfront Homes
If you want to live along the waterfront within Silicon Valley and not these neighoring communities, there really are not a lot of neighborhoods from which to choose. Most water-view homes involve the San Francisco Bay. There are a few rivers, creeks, ponds (mostly man-made or percolation), lakes, and reservoirs to be found as well, but enjoying lovely water views up close is not the easiest criteria to fill and each come with their own concerns. Waterfront bay views often come down to Foster City and Redwood Shores, which we’ll discuss next. (more…)