With soaring housing prices in Silicon Valley, newcomers and folks potentially relocating here may wonder what can you buy for $1 million or less 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 and are generally considered a specialty market. 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’d 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
- Certain districts in San Jose
- Alum Rock
- South San Jose
- Downtown and Central San Jose
- Santa Teresa
- and Alviso (including County pockets)
- 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. You can find information, including a list of mountain neighborhoods, on the page linked as well as the occasional market update. If you’re interested in buying or selling a mountain home here in the Bay Area, please reach out! I do some work in the mountains, and if it’s not a match I am happy to connect nice folks with trusted Realtors that are mountain market specialists.
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 August 31, 2021) 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.
(Trouble reading the image above? Click to view the full-sized photo.)
This doesn’t mean you can’t find something under $1mil elsewhere. San Jose’s Almaden Valley, Willow Glen, and Cambrian areas each had one sale under the million-dollar mark during the same time period, but these sales are significantly less common. When you see ratios of something like 3% or less 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.
Areas in Santa Clara County where a house is possible but unlikely, but a townhouse or condominium may work:
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.)
Early Summer 2021: Three Silicon Valley Counties
Santa Clara County Real Estate Market Report for June 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 March the median sale price is over 14% higher, and in June that jumped to 27% higher in 2021 than in 2020! Homes sold more than a month faster this June compared to last year. Of course, it hasn’t been even growth.
While the 2019-2020 winter was particularly hot, it experienced a massive swing at the start of the California pandemic falling to it’s lowest point in Santa Clara County around May and June. This put pressure on the market by stifling spring activity and, over the course of the year, created a backlog of demand with severely low available inventory. Pent up activity is driving up prices and the sales to list price ratio, among other things. Santa Clara County is keeping up the momentum from a raging hot spring market into early summer.
And the condominium and townhouse report for Santa Clara County:
This June shows about a 14%-15% rise in median sales price for condos and townhomes since last year, a clear rise in sales to list price ratio, and increased, but still low, active inventory compared to last month.
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 charts.
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. Occasionally one of these markets will have no sales within the timeframe, so those will be left in place from where they were when we last checked, but will show “n/a” in place of any pricing or statistics. Once you’ve reviewed the most recent data, scroll down farther to compare today’s market against past years!
Please use the list below 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.)
Want to do a deep dive on any of these areas? Please visit my Valley of Heart’s Delight Blog to learn about them.
There have been a number of changes to the order since the last time we checked in December 2020. Campbell, Sunnyvale, and Mountain View have all moved down the list. Their prices are higher than last time we checked, they just haven’t gone up this spring as much as some of the other markets. Saratoga has climbed much higher on the chart, but with so few sales it’s normal to see broad fluctuations in the charts for this community.
What we see across the entire chart is sky high spring pricing and extremely low days on market – under 2 weeks in all but two areas! Looking more closely, the Cambrian (San Jose) market had one highly unusual sale where the MLS listing shows a whopping 496 days on market. Discounting that sale, the average becomes a lighting fast 10 DOM! So while there are still the occasional slow sales the majority are selling at breakneck speeds! As for pricing, communities are showing increases from roughly 3% all the way up to 31%! Averaging it out, the West Valley average home is selling 16%-18% above where they were early last winter.
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 would be fairly high up as it is 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).
Also, 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.
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.
Now let’s have a look at that December 2020 chart I’ve been referencing. Los Altos had no sales during this time, although overall it was an active market in the West Valley.
Historical Comparisons of Home Prices in the Same (or Similar) Areas
We’ll start off with something fairly recent, a report from October 29th, 2019.
October 29th, 2019:
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.
Silicon Valley neighborhoods
Los Gatos neighborhood videos
How to find the median rental price by zip code
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.
Rental Housing Market Trend Highlights:
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.
To learn more, see the full report here:
(Note: images in this article are used with permission by ApartmentList.)
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:
Urban Living Neighborhoods in Silicon Valley and San Jose
Silicon Valley’s Apartment Rental Market
The shock of Silicon Valley housing costs: how little you can buy on a huge income