It can be really 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 areas and cities and areas using the same formula: homes of 1800 – 2200 SF, 3-5 bedrooms, 2-3 bathrooms, on lot sizes of 5000 SF to 10,000 SF that have sold within the last 30 days (short window of time due to price changes in the last 6 months or so – first dropping in the 2nd half of 2018, and now nosing up again).
DOM means “Days on Market”, the number of days a home was listed as available before pending.
Please note that this is a rough estimate of home prices. In many areas, cities, or towns, there can be multiple school districts. In those cases, the home price will be impacted by which school district the property is located within. (If you are interested in prices for similar homes a year or two ago, please also scroll down to find similar charts and data.)
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 if you didn’t 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.
Want to do a deep dive on any of these areas? Please visit my Valley of Heart’s Delight Blog to learn about them.
Historical comparisons of home prices in the same / similar areas
Here’s similar info from about 14 months ago (one change is that the lot sizes used before was a range of 6,000 to 10,000 SF, and in 2019 I went down to 5,000). I also thought it would be useful to share the number of sales represented, since obviously a small number may not be truly representative of home values in today’s market.
January 25, 2018: Continue reading
Edit: I originally wrote this post on August 12, 2013, but it is still accurate today, January 25, 2018, and probably will be for years to come.
- Palo Alto (very costly)
- Cupertino (less expensive for the school scores compared to other areas up to #5 on this list)
- Saratoga (very expensive)
- Los Altos & Los Altos Hills
- Los Gatos & Monte Sereno (95030 & 95032)
- Parts of San Jose in Cambrian 95124 and Almaden 95120 (very good value)
- The Los Gatos Mountains (zip code 95033)
- Parts of Fremont (Mission San Jose area)
You’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):
- A large down payment is needed – usually 25% or more – to win in the multiple offer situations which are the norm right now.
- 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.)
- 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.
- 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.
- 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.
- 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.)
San Jose is the 10th largest city in the United States, and it’s quite sprawling, too. As an introduction, it’s helpful to know a bit about each of the major districts or areas. Within them, of course, there are smaller sections which have their own distinct style.
Below, please find links to most of these areas with articles found on my popehandy.com site.
East San Jose
South San Jose
West San Jose
Want more information? Please also check http://SanJoseRealEstateLosGatosHomes.com
How do home prices compare between Los Gatos, Saratoga, Cupertino, Campbell, and areas of San Jose such as Cambrian, Almaden and West San Jose?
Yesterday on my Live in Los Gatos blog, I compared a number of “west valley” areas in Santa Clara County, or southern Silicon Valley, to provide a sense of how much home you can get for your money in Los Gatos, Saratoga, Cupertino, Campbell, and areas of San Jose such as Cambrian, Almaden and West San Jose. I used my Altos Research weekly newsletters, which provide a snapshot view of four real estate pricing tiers for various cities or areas. In these, you see the median list price per quartile with the type of square footage, lots size, beds and baths found for each one.
Let’s look at Cupertino first, since I get a lot of folks wanting to relocate to Silicon Valley for Apple employment, and many of the new recruits have heard about the wonderful public schools in that city – a major draw. A few years ago, it was very possible to purchase a small house in Cupertino for under a million dollars. But have a look at the chart below and check out the days on market as well as the other data….
In many areas, the most affordable homes are the ones that get gobbled up fastest. Why is it that in Cupertino, the lowest priced listings are on the market the longest? It’s not their size – I can tell you this from two decades of experience selling homes in the Bay Area. It is very likely that these properties are not too livable as a group. They probably need serious remodeling or rebuilding (and perhaps expansion as well). Most buyers do not have the cash to totally “rehab” a house, especially if they are starting at over $1,000,000. If you want to live in Cupertino and not throw a ton of money into the existing house, or tear down and rebuild, you’re most likely to need a budget closer to $1.3 or $1.4 million as a starting point. Want to be able to walk to Infinity Loop? Make that $1.5 or more – and you will still need to do some remodeling unless it’s very small!
What about other nearby Silicon Valley communities and neighborhoods? Please have a look at the full article with charts for a number of areas (plus one for all of San Jose).
Cambrian Park, Santa Clara County
Announcing newly on MLS and at low price for Alta Vista School, quiet street, updated/remodeled condition and oversized lot! 5114 Nerissa Way, a 1,233 sq. ft., 2 bath, 3 bdrm single story “Room to add on!”. Now
– Fabulous price!.
Property information not available
Almaden Winery, Cambrian Park – We invite everyone to visit our open house at 5641 Le Fevre Dr. on October 17 from 2:00 PM to 4:00 PM.
Property information no longer available.
Cambrian, San Jose – The ranch at 4933 Bel Estos Drive has been sold
Property information no longer available.
Cambrian Park, Santa Clara County – The duplex at 5169-5173 Oxbow Court has been sold.
Property Information no longer available.