Silicon Valley housing prices and the emotional stages they’ll put you through

Stages of Silicon Valley real estate sticker shockIt’s no surprise that housing prices in and around Silicon Valley are extremely high. So when moving to or purchasing a home in the area, know that getting over Silicon Valley real estate sticker shock happens in stages.

The 5 Stages of Housing Sticker Shock

First there is disbelief or denial.  “It cannot be that bad – people are exaggerating.”  That’s followed quickly by “I thought it was bad where I used to live!”

Then there may be outrage (anger is too mild a word): “Why would anyone pay that to live there?”

Next, a little bargaining: “What’s the work around? Are there any bank owned homes?  How about something older – I don’t mind a 15 year old house…” (To us, that’s a young house, by the way.) “What about buying a lot and building?”  Or the commute negotiation “I thought I had to be within 15 minutes, but I could go 30.”  A typical commute might be 30 minutes in the morning, but 45 in the evening.  Many people have worse than typical, though, as they want a bigger, nicer home, better schools, quieter location, etc.

Depression soon follows suit. This may be accompanied by “We just cannot do it” or “We are not willing to do that” (until they see that rents are $4000 for a smallish house in an only OK area and $6000 per month for a decent sized home in a good area.)

Acceptance comes at last. Either you can and will buy locally, or you won’t. For some, coming to terms with our local market costs means they’re ready to go all in, bite the bullet, and buy locally. That may mean spending more or getting less than what you would like. It may lead others to move out of the immediate area and embrace an hour-long commute, or to take the Apple or Google bus to work, if applicable. Or perhaps they choose to rent indefinitely (although this can also appear in the other stages).

Alternatively, it could lead some people to move to Seattle, Orange County or somewhere a little less overwhelming in terms of housing costs where they can buy the home they want.

Burning Money While Housing Prices RiseMoving Through the Stages – Acceptance of Housing Prices

Progressing through the stages is often not a straight line.

Sometimes people think they are at “acceptance” as they write offers which are habitually 5-15% too low.  In reality, they are actually still somewhere between the “denial” and “bargaining” phases, either refusing to believe the market data or hoping for a good deal amidst our raging seller’s market. That “good deal” doesn’t usually happen. Writing multiple unsuccessful offers frequently leads to depression, and sometimes even blaming their agent for their offers not going through (outrage), even when it’s clear at closing that their offer price or terms were the issue, and they were recieving good guidance from their agent that was disregarded (denial).

So how fast can you expect to get to the acceptance stage and write a realistic purchase offer? Honestly, everyone will go at a different pace, but the sooner the better. For people who could have bought 12 months ago but are still shopping now, that wait has cost them about +10% of their home price in many cases, possibly more. For those who have been looking 3 years, it’s more than double that. At that point, it’s like setting a match to your entire down payment.

If you want to be a successful home buyer in this crazy Silicon Valley real estate market, you will need to get onboard quickly, because the longer you take to get to acceptance, the more expensive your final home will cost when the market is appreciating, as it has been for about 3 years now.  Time is money and nowhere is that more true than in the San Jose, Silicon Valley, or South Bay real estate market.

 

 

Looking for more Silicon Valley real estate resources?  Here are a few of my other sites, blogs, and market stats tooks:

popehandy.rereport.com – real estate statics for San Mateo County, Santa Clara County, and Santa Cruz County

popehandy.com – Silicon Valley real estate, Los Gatos real estate, info on many areas of the realty market in Santa Clara and San Mateo counties

SanJoseRealEstateLosGatosHomes.com – Santa Clara County real estate, special focus on San Jose areas of Almaden & Cambrian and also Los Gatos with info on the real estate market, neighborhoods, and more

LiveInLosGatosBlog – Los Gatos real estate, neighborhoods, events, businesses, parks. Many photos and neighborhood or subdivision profiles.

 

 

 

 

 

How to find the median rental price by zip code

Looking to get a sense of the rental prices in Silicon Valley? Today I’ll show you how to find the median rental price by zip code for homes in Silicon Valley by using my weekly Altos Research real estate market reports for Silicon Valley.

We will use Cupertino’s housing market as an example, because many high tech employees plan to work in that city. My Altos Research report for Cupertino. You can access it at this link  Mary Pope-Handy’s Cupertino Market Report. When you click through, it will look something like this:

Altos Research - find the median rental price - Mary Pope-Handy weekly report for Santa Clara County cities, towns, and zip codes

There are tabs for houses and condos, and you can toggle as desired. The condo rent can be found in the same area on the right (after toggling to that page).

Not really wanting to live in Cupertino? Find the “Search Anywhere” field near the top and enter a city name or a zip code and you can spot check areas of interest.

Subscribe for the weekly reports

Please click the “Subscribe” button in the upper right corner to get any of the reports emailed to you weekly.

 

Not a rental Realtor

NB: I do not work in the rental market as 99.99% of rental homes are “for rent by owner” and there’s not a place for a Realtor in that structure.  When folks first move to Silicon Valley, though, they usually want to rent for awhile, so I will sometimes provide rental info because I know it’s needed.  Interested in buying or selling? Please do reach out to me! Best to start with email so that a phone call can be scheduled: mary@popehandy.com as I get a lot of spam / robo calls. However, feel free to call first if you prefer – 408-204-7673.
Related reading:

Silicon Valley neighborhoods

San Jose Districts and their Values (Feb 2018)

Facts about San Jose, the Capital of Silicon Valley

Finding New Homes for Sale in Silicon Valley

New Homes in Silicon ValleyFrequently, people new to Silicon Valley and the San Jose area arrive expecting to find new homes like the ones they left behind. But in reality that’s just not the norm in this market!

Unless you are looking to purchase a condominium or a townhome, or are looking at areas with very long commutes, it can be challenging to find truly new homes for sale here.

Finding New Homes in Silicon Valley

For the most part, Silicon Valley had a post World War II housing boom that stretched primarily from the 50s into the 70s. By the 1980s, most open space in the Valley was gone.

(more…)

Relocating to San Jose

Relocating? Evergreen: The Ranch with view of Downtown San Jose.

A view of Downtown San Jose on the valley floor from The Ranch community in Evergreen district on the East Valley area of Santa Clara County.

Are you mulling over a job opportunity in the tech capital of the world, Silicon Valley?  If you’re relocating to San Jose, or nearby, there are a few helpful things to know right away.  Here’s a quick primer:

Relocating to San Jose – Here are Some Quick Facts.

  • San Jose (officially named City of San José) is located at the southern end of the San Francisco Bay, so is part of the SF Bay Metro Area and about 1 hour by car south of San Francisco (which locals call The City).
  • It is located within Santa Clara County, and geographically in the Santa Clara Valley and along the foothills of the Santa Cruz and Diablo ranges.
  • This sprawling city has a number of different districts or communities, some of which have their own thriving downtown strips.  There are also quite a few school districts – school lines are not based on city or zip code boundaries.
  • The beach at Santa Cruz is anywhere from 30 – 60 minutes away from most of San Jose (assuming you don’t go at the peak of “beach traffic” timing on a weekend or holiday).
  • San Jose is also the home of Silicon Valley, which began here in Santa Clara County, but has now spread throughout the area.
  • This city is the 10th largest in the United States (though poll most people who aren’t in The Golden State and they couldn’t tell you where it is).  The population is just shy of the 1 million mark.  The county has about 1.9 million people and the Silicon Valley region (Santa Clara County, San Mateo County, and a little each of Santa Cruz County and Alameda County)
  • Home prices are reportedly on average the highest in the nation, and 5th highest in the world. The average price of a house in the area is $1 million.  And that is not for a big home, in most cases. Sticker shock is the #1 reason why some people won’t move here – and why others move away.  Rents are, similarly, high.  It’s not uncommon to hear of people spending half their income or more on housing.
  • Next to housing or real estate prices, traffic is the second biggest complaint.
  • Weather is often ideal – 300 sunny days per year, and there are many parks and open spaces to make use of it all. Winter here is pretty much just December and January, and even in January you’ll see some trees pop alive with beautiful blossoms.
  • San Jose has frequently been named one of the best places to raise a kid.

Looking for more info?  Here are some links:

Facts about San Jose, the Capital of Silicon Valley

From the City of San Jose: San José at-a-glance

San Jose is big and sprawling: where the the districts?

Browse available listings of San Jose homes for sale

 

Market Reports for Three Silicon Valley Counties

Today we’ll share the market reports for three Silicon Valley Counties. These are from December 2022.

Santa Clara County, San Mateo County, and Santa Cruz County are the areas covered below. 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 we don’t usually sell there, so we are not covering it in this post.

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, we 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.
December 2022: Three Silicon Valley Counties

Santa Clara County Real Estate Market Report for Dec 2022

The first of the three Silicon Valley counties is 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 county is the heart of Silicon Valley.

If you’re having trouble reading any of the charts on this page, click to open the full size image.

 

Santa Clara County real estate market trends for December 2022

The market is clearly cooling with longer days on market, fewer sales, and a falling median sales price.

The condominium and townhouse report for Santa Clara County

While it had fewer than half the sales of the single family home market, the condo and townhouse market is also experiencing similar trends.

 

Santa Clara County condominium and townhouse real estate market stats for Dec 2022

Keep reading for updates on the San Mateo and Santa Cruz county markets.

(more…)

Tools You Can Use When Relocating to the San Jose Area

If you’re relocating to the San Jose area, there are a few tools you can use for resources as you evaluate different parts of the region. When I started this website, I had books listed that you could purchase. Today, mostly I have websites that you should bookmark – for free!

Tools you can use - the Cal My Hazards Awareness map is a wonderful first step for researching natural hazards in California. Map showing San Jose with liquefaction zone.

Natural & Environmental Hazard Information Tools You Can Use

Natural hazards are found throughout the United States, often the major one people consider is the one hundred year flood plain. Here in the Golden State, we have some additional concerns relating to fire and earthquake risks.

  • California MyHazards can display a map anywhere in the state with information relating to liquefaction zones, earthquake faults, 100 year flood plains, and high fire risk areas. (The info for the very high fire hazard severity zone has not been updated, so use the Cal Fire map for that info.)
  • Cal Fire map for all of California with the high fire severity zones shown – zoom in to find the areas of concern
  • Flooding from Dam Failure (potentially caused by earthquakes as well as other possibilities) is scary. Learn more about those zones at the link I’m providing here. (As of this writing, the Approved Inundation Maps link is not working.)
  • A Barclay’s Locaide will outline earthquake faults, flood plains, and other natural hazard zones you might want to know about. This is now out of date, but you may be able to locate a used one online or see if a local real estate association of Realtors bookstore has it available.
  • Earthquake Zones of Required Investigation can be used throughout the state to identify landslide, liquefaction, and other zones relating to quakes.
  • Something else to know is that there are state mapped earthquake faults (the more active ones, such as the Hayward or San Andreas Fault) and also the city, town or county mapped fault zones (for example, the Shannon Fault). The latter may have been dormant for 11,000 years or more.
  • Buying a home? Sellers usually provide a Natural Hazard Report, an Environmental Hazard Report, and a Tax Report from a company such as JCP. This same company / site has a great amount of information on local conditions on its About the Hazards page that newcomers would benefit from.
  • When buying a home in California, consumers are given a link to download brochures, or one combined document, on a variety of hazards. I’m not sure that most of them take the time to read it, but it’s excellent info and I highly encourage anyone living in CA, whether renting or owning, to read it:
    Homeowner’s Guide to Earthquake Safety & Environmental Hazards

Environmental Hazard Zones: Research Tools You Can Use

  • Local concerns also include environmental ones, such as Superfund sites.
  • Some sites with spills, leaking underground storage tanks, or other issues can be found at this Cleanups in my community page (nationwide info)
  • Mercury, or quicksilver, was mined in Almaden (New Almaden and related mines) and east Los Gatos (Guadalupe Mine area) – it is a naturally occurring element in cinnabar. For that reason, creeks in those areas should not be entered or fished in. It can be found in other creeks and rivers, too, but primarily in Almaden. 
  • Asbestos is another naturally occurring element here. It was prized for being somewhat fire resistant and was mined under Communications Hill. It’s something to investigate if you want to live in that area.
  • Oil, gold silver, and other elements were mined here as well as granite (we still have quarries active in Santa Clara County today, a couple in the Cupertino area and one in the hills by Lexington Reservoir just outside of Los Gatos). Some old mines are not mapped if they are on private land, so one of the disclosures we have relates to unmapped, abandoned mines., which may be found in more rural pockets of the county.
  • Flooding from dam failure (dams are human made, hence it’s not a “natural” hazard ) is a risk in a large part of Silicon Valley. Most of the areas at risk from flooding due to dam failure are listed on this site. 
  • Noise pollution: use either How Loud or Noise-Map. We discussed the pros, cons, and shortcomings of these on our main blog: Measuring Noise Pollution

Other Priorities for the Tools You Can Use list

In addition to natural and environmental hazards, there are big plusses that will attract new residents.

It is also helpful to have a knowledgeable Realtor as your resource!  Please call me if you’d like assistance in your move to SIlicon Valley. I’d be happy to help you.

 

Related Reading to Tools You Can Use:

Silicon Valley liquefaction zones (on the Valley of Heart’s Delight blog)

Is there a radon risk in Silicon Valley homes? (Valley of Heart’s Delight blog)

Smoke and air quality

Silicon Valley liquefaction zones (on SanJoseRealEstateLosGatosHomes.com, our Valley of Heart’s Delight blog)

Elevation map – learn your home’s elevation (on SanJoseRealEstateLosGatosHomes.com, our Valley of Heart’s Delight blog)

Do you  have a high water table? (on our Live in Los Gatos blog)

Are fire seasons new?