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:
There are tabs for houses and condos, and you can toggle as desired.
On the right, you will see the market profile. Below, view one for the single family homes and one for condos. I have outlined where the median rental value shows so that you can locate it fast.
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.
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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: firstname.lastname@example.org as I get a lot of spam / robo calls. However, feel free to call first if you prefer – 408-204-7673.
San Jose Districts and their Values (Feb 2018)
What’s going on with the Silicon Valley real estate market? Is it as crazy as ever with multiple offers, overbids, and few or no contingencies? Today we’ll consider the regional view, aka The Big Picture, to provide a sense of what is going on. For info on smaller areas or districts, please head over to my main blog, the Valley Of Heart’s Delight Blog – SanJoseRealEstateLosGatosHomes.com. There cities, towns, and districts are looked at in depth.
Seasonal Patterns in Silicon Valley
The quietest time (number of sales, traffic, etc.) and lowest prices in the real estate market tend to fall in January, or sometimes in December. As with most years, this time around January had the lowest prices.
Most years, we see strong buyer activity with multiple offers early in the year – often emerging as a pattern by the middle of February.
Right now, some home sellers have not accepted that home prices have dropped 20% or so since the peak last spring (more or less depending on location, pricing tier, school districts, property condition, and so on). Those properties are not moving quickly.
For sellers who understand the current market conditions and have priced appropriately, home buyers are flocking and multiple offers are back – in force.
In short, there’s a kind of duality right now, so it’s a weird time. Homes that were sitting on the market but get a price reduction may linger awhile, and then sell with multiple offers. This catches buyers and their Realtors off guard.
To provide regional Silicon Valley market conditions, today I’ll post info on the three counties (San Mateo, Santa Clara, and Santa Cruz).
In terms of expense, San Mateo is the most costly of these 3, and overall it becomes less expensive in Santa Clara County, then less expensive still in Santa Cruz County. Alameda County has a little of Silicon Valley, but that area is in a different MLS system so is not part of this analysis.
Next, a look at sale prices an market conditions for single family homes and condominiums / townhomes by county.
What does it cost to buy a house or condo in Silicon Valley?
In Santa Clara County (home to Palo Alto, Cupertino, Sunnyvale, Mountain View, San Jose, and my own Los Gatos), the average sale price is $1,413,000 and the median sale price $1,185,000 – quite a bit lower than last spring.
Santa Clara County
Please click to enlarge:
For condominiums and townhouses, of course, it is a more affordable.
In San Mateo County (home to Redwood Shores, Foster City, Menlo Park, San Mateo), the average sale price is about $1.78 million for houses recently sold. The median is a little lower at $1.425 million. Continue reading
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 long are homes taking to sell? It is more than 2017, but not unusual compared to 2013, 2014, 2015 and 2016.
Price per square foot – year over year, it’s a steady upward progression.
And lastly, sale price to list price ratio – here, we do see that it is softer than prior years.
What to make of all of this? The market is softening, but most indicators are still fairly robust. We are overdue on a correction in the housing market, but I don’t see it coming right away. The thing to watch for will be what happens in Feb – April 2019. The market could surge upward again, it could rise gently, be flat, or fall.
The real question is whether the Silicon Valley real estate softening will continue into the new year or not. If it continues, hesitant buyers will be glad they waited. If not, they will want to kick themselves for a missed opportunity.
It’s hard to know the future, but right now, conditions are the best for buyers I’ve seen in a long time. Prices are lower than spring, and home buyers are able to purchase with contingencies in many cases.
The Silicon Valley market recently seemed to be on the skids from late spring through summer. The question was whether the decline in average and median sales prices was “seasonally normal” or if it was the beginning of a correction. Depending on which way you look at the data (or which data you used), you might come up with a different conclusion. What I did not expect at this point was an uptick in the market.
Today I did a quick study of pricing in Santa Clara County and San Mateo County. To my surprise, it appears that the closed sale prices so far in October are noticeably higher than in August – perhaps the sliding prices are sliding no more? Do we have an uptick in the market? We’ll have to watch and see. There are obviously very few sales so early in the month, but no matter which angle I tried, I did keep getting the same result: higher median and average sale prices in Santa Clara County and San Mateo County for single family homes. It was also strong for the condo / townhome market in Santa Clara County, but there’s a little dip for San Mateo County so far this month.
Here are some charts that I created from MLSListings, using the stats tools, today.
First, Santa Clara County single family homes, average sale price and median sale price. The uptick in sale prices is clear.
Next, the same criteria, but for San Mateo County, which also shows rising average and median sale prices :
What about the condo and townhouse market? Here’s the same criteria but for condominiums and townhomes in Santa Clara County. Once again, the numbers are up – rather than deepening the trend of downward pricing pressure.
San Mateo Condo and Townhouse market:
Whether you’re a long-term renter, temporary renter looking for a furnished rental, or a landlord, you’re probably wondering how the Silicon Valley’s apartment rental market is today and where it’s heading. Most real estate agents in this area do not deal with rentals, so rental housing is not typically something we track super closely. That being said, the same things that affect the residential resale market frequently effect the apartment rental market as well. So, without the help from my usual sources, such as the MLS (Multiple Listing Services), let’s look at what people are saying about the current trends.
Silicon Valley’s cooling apartment rental market
There are a few good sources for rental home information. One of them is RentCafe, which provides info on many cities and towns in Santa Clara County. The RentCafe page on Mountain View, for instance, provided the average apartment rental for all apartments, for studios, 1 bedrooms, 2 bedrooms, and 3 bedrooms. The overall averages seem to be somewhere between the 1 and 2 bedroom price points. It also shared today’s softened prices relative to last year’s. (I find this curious since buying a home is now more expensive than a year ago.)
RentCafe has similar info for a few cities nearby. You can find Santa Clara here, but change the last part of the URL to get a different city:
Another excellent source of information is Apartment List.
Apartment List does not analyze every city and town, nor do they study the difference between neighborhoods, such as comparing South San Jose with Willow Glen, but where they do give insight helps to show the major trends happening around the bay area. Check out Apartment List for more detailed analysis, and the most up-to-date information on the market. Also check out their Rentonomics page with more articles on renting.
Is there a solution to the lack of low-cost apartment rentals?
Analysts all believe there will be some market turnaround in the not too far future, but there are a few answers to where it may come from. CNBC published an article on the housing shortage dealing with high tech companies. Large industry leaders such as Google, Facebook, and Twitter continue to hire, bringing people into the area more quickly than developers are building, and forcing up the prices in both housing and rental markets. Employees have asked these companies to help, and some are responding. Google and Facebook have both come up with plans to construct affordable housing.
For years, California law has stated that a certain amount of affordable housing must be available in each community. Unfortunately, many communities are ignoring both the law and the need for such developments. If every community were to develop what the law required, the market would be much more balanced. Yet again, it’s the investors that are controlling the development, and it will not likely happen soon.
Below, please find a simple chart which provides a pretty good sense of what homes actually cost – not what they are listed for, but where they sell, here in the Valley of Heart’s Delight.
Often when people relocate to the San Jose area, they are interested in communities with good schools, like Cupertino, Saratoga, Los Altos, and Los Gatos. It can be a real shock to the system to find out that buying power isn’t what was hoped.
This data is courtesy of Sereno Group – thought it would be helpful to folks relocating here as a snapshot on the Silicon Valley real estate market Disclaimer: in many of these cities, there are different school districts within a city’s borders, and they are their own “markets”. Consider this as general information only.
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.
How about the various parts of the county? The Silicon Valley real estate market varies from one area, price point, and school district to the next. The hottest of the hot markets are in the heart of the tech centers in prices under $2 million.
Sunnyvale has the highest sale price to list price average, with a staggering 116.1%, and Santa Clara is just behind at 113.9%. Only Monte Sereno is coming in at under 100% for the sale price to list price ratio (it is a very high end community). There are no “soft” markets in the bottom 50% of pricing anywhere.
Note that it’s very similar to the South Bay in that most communities have average sale price to list price ratios of over 100%, and the super high end areas like Woodside, Portola Valley, and Hillsborough are seeing milder SP to LP ratios than the more moderately priced cities such as Daly City (120.6%), San Bruno (117.7%), or Belmont (116.2%). These areas are not, generally speaking, luxury markets – so there is much more competition.
As is the normal pattern, San Mateo County is the most expensive of these three, followed by Santa Clara County, and then Santa Cruz County. Living by the coast is a dream for many, and with slightly softer prices and competition, this can be a fantastic retirement option for Silicon Valley homeowners looking to downsize.
In Santa Cruz County, like SMC and SCC, affordability is fueling the hottest market activity. Boulder Creek, known for its abundance of redwoods and rainfall, gleaned the most intense overbids in that county at 104.9% sale price to list price ratio and an average sale price of $570,000 – an absolute bargain relative to nearby areas “over the hill”.
Got a luxury budget? You are in luck!
Home buyers looking to purchase over $3 million (at least in most areas) will find it a good market for them to purchase. Selling under $2 or $2.5 million – again, in most areas – is fantastic for most properties. Who’s got it made? The move up luxury home buyer!
To get more details on the real estate market in Santa Clara County , San Mateo County, or Santa Cruz County, please visit http://popehandy.
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.
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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.
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 using the same formula: homes of 1800 – 2200 SF, 3-5 bedrooms, 2-3 bathrooms, on lot sizes of 6000 SF to 10,000 SF that have sold within the last 90 days (120 days when there’s less inventory, 60 when there’s more). Here’s how it shakes out in the “west valley areas” along the Highway 85 corridor. What areas are most affordable? One way of analyzing this is the “price per square foot” figure. How competitive is it? Have a look at the DOM or “Days on Market” figure. All of these days on market are short, but they range from low to heart-skipping fast. Please also note that while most of these numbers are working on a handful of sales, Mountain View and Saratoga had only two each over the last 3 months that fit the criteria, so the data may not be as accurate in that row as others, like Cambrian in San Jose which had 23 sales in the same time. Now let’s have a look.
How much have prices changed? I’m trying a different approach this time to arrange the chart, showing areas that have moved up on the chart in white and those which have moved down in the darker rows. While that shows how prices have changed in relation to other areas, and for the most part the rankings don’t change very much. Compare each individual market to where it was last July and you’ll see that prices everywhere are up from summer 2017.
This chart was from last July.
Below is another flashback to March 2017. Do you notice the difference in ordering? A couple of markets have switched places, Sunnyvale and Saratoga, but there’s not too much different. For the most part, rankings have changed very little.
This next chart was from last March.
In most cases, the most expensive and desirable places have either the best schools or shortest commute location. 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).
What about a little longer term? What did this look like in 2013? Click through to see. 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)