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.
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.)
Santa Clara County Real Estate Market Report for October 2019
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 1% since last month, but is down 6% from last yaer. Of course, it wasn’t an even slide. Spring and summer saw a rise in sales price, peaking at approximately a 17% increase before slipping back down to our current early autumn cooling.
And the condominium and townhouse report for Santa Clara County:
This year shows about a 4% drop in price for condos and townhomes since last month, but about a 15% drop from last year.
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 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.)
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. To compare, below is a report from April 3rd, 2019 using the same formula.
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 22 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
Today on the Valley of Heart’s Delight Blog, I looked at the real estate markets for Los Gatos, Saratoga, Cupertino, and Los Altos.
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.
To see how these 4 highly regarded communities compare in terms of market conditions and what you can buy for your money, please visit:
Market comparison: Los Gatos, Saratoga, Cupertino and Los Altos on the Valley of Heart’s Delight Blog.
This morning I read a comprehensive article assessing the real estate market in California and several key markets within it. Normally I do not publish a post here suggesting that people read analysis elsewhere, but this is an exception, as it includes 2019 predictions that most home owners or home buyers would find of interest.
Some of the 2019 predictions are along the lines of my own thinking, including that we have to see what happens in February to understand the market’s direction, and that it seems that it will continue to be an appreciating market in 2019 (if milder, per many economists). Also the falling prices have spooked home buyers, so rather than rushing at the 20% off sale, some are waiting for prices to be cut by 65% (I wouldn’t hold my breath) or some other extreme number.
California Housing Market Report and Predictions 2018 2019
If you’d like to check out the real estate market data in Santa Clara County and other Silicon Valley communities, please visit my main blog site, ValleyOfHeartsDelight.com/blog or SanJoseRealEstateLosGatosHomes.com (the first link forwards to the second).
Other reading of interest:
Here’s a 10 or 11 minute interview with Mike Simonsen, Altos Research CEO (whose charts and graphs are found on all my sites) on the 2019 real estate market.
It is not at all unusual for the housing market to go flat or even decline a little in the second half of the year. In October, the local Silicon Valley real estate market got an uptick as prices rose from the month before, homes sold a little faster, and basically things inched back into the seller’s favor. Sometimes homes that sell between Labor Day and Halloween seem to be in a second spring of sorts. In November so far, though, the Silicon Valley real estate market softens again – slightly. It’s all slightly more depressed than in October: prices are a little lower, days on market a little longer, etc. It is still a seller’s market, but not nearly to the degree it was in spring.
In other words, it’s a good time to buy (at least compared to 6 months ago).
Home buyers are funny, as a rule. They tend to buy when it’s a frenzy and prices are skyrocketing and multiple offers are in the crazy zone with buyers going in without any contingencies. Once the foot comes off the gas and they can buy with some rights to contingencies and can purchase closer to list price, many buyers freak out and won’t buy at all. It’s like the market has to be against them if they are at all interested.
Let’s look at the numbers for Santa Clara County. I pulled these tonight from MLS Listings and the data reflects single family homes in Santa Clara County. (Remember, closed sales were usually ratified about 30 days prior.)
First – inventory – I think it’s very important to not just view the month-over-month changes, but the year over year. How does it usually look for this month in the past? 2017 was a weird year, so going back a little further in time provides helpful perspective.
How is the Silicon Valley real estate market? It’s more of the same this month, with too-low levels of available inventory of homes for sale in Silicon Valley. At this point, the low inventory is a chronic problem for everyone. Inventory is up from the beginning of the year, but no where near “normal”, as you can see in the data below.
Home buyers in the county or on the Peninsula have little or nothing to purchase, and sellers feel trapped – they cannot sell their current home as there are bad odds that they would be able to purchase something else if they did sell. Unless they expect to leave the metro area, they are going to hold on tight in most cases.
Have a look at the inventory of houses on the market from 2001 (the earliest year I can pull from the MLS) to today in Santa Clara County – June is highlighted in a pale yellow to make it easy to find and compare the same month over the last 17 years.
The Silicon Valley real estate market – a look at inventory of available homes for sale:
The numbers really say it all. Even if you are new to the San Francisco Bay Area, you cannot help but notice the relative scarcity of homes for sale this month as opposed to last month or any other dating back to 2001. Therefore, it’s no surprise that solid homes here that are not in the luxury tier for their area (and are aggressively priced, beautifully staged, professionally photographed, and easy to view) are getting multiple offers, high overbids, and selling with no contingencies for inspection, loan, or appraisal. It’s more difficult, but not impossible, for anyone trying to purchase with less than 20% down in multiple offer situations. The key is to have extra money, beyond that 10%, for a potential appraisal deficit.
Here’s how the numbers look for various Silicon Valley communities. You can see all the info for them at popehandy.rereport.com or view the PDF newsletter by clicking the link or the image below.
One of the tools I use in my Silicon Valley real estate practice is Altos Research. My subscription, which generates reports on mls data of homes for sale weekly, covers all the zip codes of Santa Clara County. The market reports by zip code can be a real wealth of information for home buyers trying to figure out how much home they can get for their money as the report breaks down each zip code area listings by price quartiles and provides the average home and lot size, among other items, in each bracket.
Here’s one part of this week’s report for single family homes in 95032
This is a really helpful way to grasp qucikly how much it will likely cost to get you into a certain sized home. It also provides a sense whether your particular price point is near the bottom or top of the market – or if it’s possible at all. Want to buy a home here but the budget is $1 million or less? The data above reveals that this is unlikely in a house. But perhaps a condo or townhouse might work.
Next, please notice the days on market by pricing tier. It’s a lot hotter of a market in the lowest priced houses than it is in the highest.
It also helps home sellers to understand what part of their local market is hot or cold (if any).
There are many other elements included in the report. The main summary of “how’s the market?” is found in the upper right corner. Below is the example from the same Los Gatos 95032 report cited above:
The Altos data is strictly by town or zip code, so school districts won’t be covered – and here they are a major driver on home values. Even so, this is a great starting point and a way to get the big picture painlessly.
Please sign up and get the monthly newsletter, too!
The report is free to you – please sign up below to get the market reports by zip code emailed to you automatically each week. Yo
But wait, there’s MORE! Two monthly newsletter options, too!!
I also offer a couple of monthly newsletter than you can sign up to receive. The Silicon Valley RE Report comes out between the 5th and 10th of each month, and that site automatically generates an update for particular addresses or areas, depending on what someone signs up for. If interested, go to http://popehandy.rereport.com/market_reports and navigate to the report you want (by city, the county, or part of San Jose, for instance) and sign up to receive updates by clicking on the “Subscribe to report” button.
Additionally, once a month I send out a personalized newsletter via Mail Chimp that includes some data from the RE Report as well as other information, such as stats I’ve pulled directly from the MLS or what I’m hearing about market conditions at office meetings, or changes to the purchase contract or disclosure paperwork, etc. You can see a sample with my May 5, 2018 newsletter and also view the past mailings (upper left side “Past Issues”) & sign up if you like to get these each month. The sign up button is on the upper left side and simply says “subscribe”. There will be a little overlap with the RE Report, but it will provide info that isn’t available on that site.
With soaring housing prices in Silicon Valley, newcomers and folks potentially relocating here may wonder what can you buy for $1 million 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.) 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’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
- the Alum Rock area of San Jose
- South San Jose
- the Evergreen area of SJ
- the Berryessa area of SJ
- Downtown and Central San Jose
- the Blossom Valley area of San Jose
- and the Santa Teresa area of San Jose
- 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. (Please find info on a list of neighborhoods at the link above.)
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 March 1, 2018) 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.
Areas in Santa Clara County where a house is possible but unlikely, but a townhouse or condominium may work:
There are some areas in the valley where a few properties that sell under a million are single family homes or houses. When you see ratios of something like 3% 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.
These long-shot, but perhaps possible, areas include Willow Glen (area of San Jose), Cambrian (area of San Jose), Santa Clara, and Campbell. In most of these desirable locales, a townhouse or condo is very doable, but a house – not too likely.
What about condos or townhomes? Except for areas which stratospheric pricing like Palo Alto and Los Altos, a condo or townhouse under $1 million should be possible in virtually all of Santa clara County.
Areas where you will NOT find a house for under $1 million
If you absolutely must buy a house, and not a condo or townhome, skip Palo Alto, Los Altos, Los Altos Hills, Saratoga, Los Gatos, Monte Sereno, Sunnyvale, Cupertino, and West San Jose. Also skip Santa Clara where the schools are Cupertino. It just isn’t going to be in budget.
What about San Mateo county?
In general, San Mateo County is more expensive than Santa Clara County. However, there are some pockets that may work.
Silicon Valley really includes the bayside areas of SMC, not the side that is along the Pacific Ocean. The beachside areas are far more affordable, but you will find the commute to be a bit arduous if you are working in central Silicon Valley. If you don’t mind a longer drive, do check into Pacifica (a pretty good value area) and other communities by the shore. that said, Half Moon Bay is super popular, and that price point won’t work there.
Redwood City is a good value area overall. The schools do not rank as highly as some other areas, and the plus to that is that home prices are a little more affordable. In the last 90 days, 7 of 103 sold houses were under $1 million. That’s not a high percentage, but it may not be impossible. More likely, you’ll get a far nicer townhouse with more space than you would a house in RC. Keep your options open there!
Inland, East Palo Alto has been coming into its own, steadily improving, and showing itself to be a good value area. In the last 90 days, 12 of the 17 homes sold went for $1 million or less. Yes, that’s hardly any inventory, but it is in range – so keep your eye on it.
Daly city had 33 of 70 homes go for $1 million or less. That’s definitely worth checking out, especially if your work takes you to Redwood City or South San Francisco.
Brisbane had 2 of 6 sales sold for $1 million or less. (Inventory so small that you shouldn’t count on it.)
South San Francisco had 16 of 43 homes sell in range.
The rest of the areas were either highly unlikely or a slam dunk “no” to selling in budget for a house.
What about the East Bay?
The east bay tends to be more affordable than the south bay or Peninsula. I did not check into those areas as I don’t know them as well (though I did live in Fremont for a year when I was in grad school). The bridges can get quite backed up. Over time, I believe that “Silicon Valley” will creep more and more into the east bay, both Alameda and Contra Costa Counties.
Some home buyers just must have land, a yard, a detached home. For them, it will be imperative to not spin wheels trying to locate a single family home in areas where they simply won’t be “in budget”. In Silicon Valley, the usual remedy is “drive a little, save a lot”. Hopefully, once BART comes through, the driving will be a whole lot less!