Moving to Silicon Valley: is it possible to get a house here that’s as nice as the one you currently own?

Can You Get the Same Home Relocating to Silicon Valley?“Can I buy the same home in Silicon Valley?”

I am frequently contacted by extremely bright, successful engineers or high tech professionals who are in large homes on large lots with great schools in less expensive areas of the country, or ocasionally outsisde of the country. They want to move here because Silicon Valley is the hub of innovation, a center for jobs in high-tech, our weather’s great, crime’s low, and there’s so much to do in this region. The housing costs here are extraordinarily high here, but often these professionals hope that the salaries are commensurately high such that they can replicate the home and lifestyle they are accustom to elsewhere, but in Silicon Valley. It doesn’t work that way.

Unless you’re relocating here from New York, Tokyo, or Paris (or somewhere equally astronomically priced), don’t expect the salary offered in Silicon Valley will to go as far here as it would elsewhere in the world. I’m sorry.

Relocation & Silicon Valley: Downgrade to Upgrade

Downgrade the House, Upgrade the Price…

Most relocating homeowners can expect a home downgrade and a higher price compared to what they are leaving behind. Yes, incomes are a little higher but not nearly enough to match the discrepancy in real estate prices. This is even more true with the astronomical acceleration of the market that we’ve seen in 2021 and in early 2022. Even without a wild seller’s market I tell people, as a rule of thumb, that when you move here you will pay twice as much and get half as much. (While salaries might be a little higher, they are not usually double what you’d make elsewhere.)

Sometimes I get the comment: “I don’t want to move to Silicon Valley and have my family’s lifestyle negatively impacted by having to live in a smaller house. I want the quality of life to go up, not down!”

That is completely understandable. People who move here don’t do it because of the housing. They do it for the location and the style of living that this area offers.

… to Upgrade the Location and Lifestyle!

We have the Pacific Ocean an hour or less away, San Francisco an hour away, dozens of wineries, theatre, museums, professional sports (go Sharks!), and world-reknown parks and trails. Shoveling snow? Never! San Jose enjoys 300 sunny days a year on average. If you love to be outdoors, you can make the most of it all year long here where the weather is subtropical. Our population is highly diverse and highly educated, crime is low, not to mention it’s the center of the global tech industry! There are a thousand reasons why the South Bay is probably a major upgrade… but it’s not an upgrade if you equivocate your house with your lifestyle.

So if you are considering a move to Silicon Valley, expect to pay more, get less home, and move into an amazing community in a beautiful pocket of the world.

Related Reading from this and my other blogs:

Market Reports for Three Silicon Valley Counties

What can you buy for $1 million in Silicon Valley?

Comparing cost of housing in West Valley communities from Palo Alto to Los Gatos to Blossom Valley: what will a 4 bedroom home cost?

 

Home prices by high school district

Here’s a quick look at home prices by high school district. This is a great way to get a broad sense of where it’s more affordable or more costly to buy a home in Silicon Valley!

First, the median home prices by high school district for single family homes (houses and duet homes) in Santa Clara County. (Click on the images to view a larger version of each).

The SP/LP figure refers to the sale price to list price ratio. When it says 117%, that means the home sold on average 17% over list price. Med DOM is the median Days on Market.

PLEASE CLICK THE IMAGE BELOW TO VIEW LARGER VERSION

Santa Clara County SFH by high school district

 

 

Here’s the same information of home price by high school district, but from May 2021. This provides a pretty good sense of how strong appreciation has been over the last year.

Median Home prices SFH high school district in Santa Clara County

 

Within each of these high school districts, there are more and less expensive areas. In the Los Gatos-Saratoga Joint Union HSD, for instance, some homes are in Los Gatos, some in Monte Sereno, and some in Saratoga – some have views and acreage, some are more modest. The figures are very broad.

Next, the same data but for condominiums and townhouses in Santa Clara County. These are far more affordable, but still very costly.

PLEASE CLICK THE IMAGE BELOW TO VIEW LARGER VERSION

 

Condos and townhomes by High School District as of Jan 2022

The condominium and townhouse market has been strong, but nothing like the real estate market for houses.

Santa Clara County condo and townhouse home prices by high school district as of  May 2021

Median home prices Condo and Townhouse high school district

 

Need other areas? I can provide San Mateo and Santa Cruz County data on request.

Market Reports for Three Silicon Valley Counties

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.

Early Winter 2021-2022: Three Silicon Valley Counties

Santa Clara County Real Estate Market Report for December 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 25% since December 2020, an unbelievable amount of growth! Homes sold nearly a full week faster this December compared to last year. Of course, it hasn’t been even growth.

While the 2019-2020 winter was particularly hot, it experienced a massive slowdown in market activity at the start of the 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 prices sky high and bolstering a heightened average sales to list price ratio, but inventory continues to fall while demand snowballs out of control! Santa Clara County is keeping up the momentum from a raging hot 2021 with hardly any sign of winter cooling!

Santa Clara County SFH Market Report - January 2022

And the condominium and townhouse report for Santa Clara County:

This December shows about a 12% rise in median sales price for condos and townhomes since this time last year, a 4% rise in the average sales to list price ratio, a much faster market absorption rate, and a slightly higher volume of closed sales despite having only a quarter of the inventory compared to last December!

January 2022 – Condo _ Townhouse Market Report - Santa Clara

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What can you buy for $1 million in Silicon Valley?

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

  • Gilroy
  • Morgan Hill
  • Milpitas
  • Certain districts in San Jose
    • Alum Rock
    • South San Jose
    • Evergreen
    • Berryessa
    • 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.

Silicon Valley homes for under $1 million: houses

(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:

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What does it cost to rent a 1 bedroom apartment in Silicon Valley?

Relocation question - what does it cost to rent a 1 bedroom apartment in Silicon Valley?Moving to the San Jose or San Francisco Bay Area? You may be wondering what does it cost to rent a 1 bedroom apartment in Silicon Valley? (You can find a list of rental housing resources on this site here.)

The range in rental prices varies with location, condition, and amenities – exclusive or covered parking, air conditioning, dishwashers, a small yard for downstairs units, and pools are not all automatic.

  • In general, it is very difficult to find a decent 1 bedroom for under $2,000 per month (but possibly as low as $1800).
  • An average 1 bedroom is likely to run $2300- $2600 in most areas.
  • It’s not hard to find one at $3,000 per month, especially in nicer and more in-demand areas such as Mountain View, Sunnyvale, Cupertino, Saratoga, and Los Gatos.
  • If you move to one of the expensive areas and get to enjoy extra perks, you may be spending $3000, $3500 or more per month.

If you are working on a smaller budget, you’ll find a few studio apartments available and they will of course be more affordable. Apartments lacking air conditioning, pools, or other highly sought after amenities will also be offered for a bit less. Another option is to look a little further out and consider units without AC, pools, etc.

Apartment homes with a yard are renting for about 15% more than those with no outside space, from what I have seen.

Recently I saw a studio in West San Jose (fairly expensive area) for about $2100. The complex does have a pool, but the units don’t have air conditioning of any kind. I also viewed a 1 bedroom in Campbell for about the same price but it included a wall AC unit. It’s very similar to purchases in that if you get closer in, you get less home for your money.

A couple of things to beware of when looking for rental housing

Something to be aware of is that some houses have Accessory Dwelling Units that seem inexpensive, and often it’s because something is missing, whether it’s a decent amount of square footage, a kitchen will a full sized oven and stove, etc. Not long ago I saw such a place but the kitchen was really just a wet bar with a microwave and toaster oven. The old adage is accurate: if it sounds too good to be true, it is too good to be true. (more…)

What does it cost to buy a 4 bedroom, 2 bath home in the West Valley areas of Silicon Valley?

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.

Comparing West Valley House Prices 2021-06-28

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.

2020-12-10 60D SFH 4B/2B Cost

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:

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