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.
Listed at $2,000,000 and sold with 4 offers for $2,300,000. Closed on August 14, 2018
Original post on this listing is below:
If you’ve been hunting for a move-in ready Cupertino home for sale with Monta Vista High School, this is your lucky week! Set in the beautiful Three Oaks neighborhood, close to Rainbow Drive and S Stelling Road, this sunny house was expanded in 2011 and more updates were done in 2018, including fully remodeling both bathrooms. The addition brought 600 SF of kitchen, family, and office space to the home – and they are exquisite!
The home at 1190 Crestline Drive, Cupertino CA 95014 features 3 bedrooms plus an office (which could be converted to a bedroom), 2 remodeled baths, a spacious living room, dining room, alcove off the dining room (originally the location of the “old” kitchen), a spacious kitchen – family room combination with a large, vaulted ceiling. There are recessed lights in the living, dining, kitchen, and family rooms. The kitchen-family room area offers 2 skylights with retractable shades. Both bathrooms and also the dining room provide sun tunnels. There’s loads of natural light!
Flexible floor plan and more options for another bed, bath, or?
The space which was the original kitchen is now an alcove, but it is possible to create another bedroom there – or use it as a study, music room, hobby room, or play area. It’s got a sewer line there, since it was previously a kitchen, so it may be possible to add a bathroom, too.
- 3 bedrooms + office and alcove
- Office has closet adjacent – could possibly convert office to bedroom
- 2 newly remodeled baths in 2018
- 1715 SF (per county)
- Lot size 6007 SF (per county)
- Built in 1963, expanded in 2011
- No carpeting – mostly hardwood floors, some laminate, some Italian porcelain tile
- Flexible layout—sewer plumbed to possibly add 3rd bathroom and another in original kitchen area
- Schools: Regnart Elementary, Kennedy Middle & Monta Vista High
MLS # ML81714661
OPEN HOUSE SCHEDULE:
Thurs., 7-19-2018 9:30am to 12:30pm (broker tour AND public open house)
Sat., 7-21-2018 2pm to 4pm
Sun., 7-22-2018 2pm to 4pm
You can learn more about this Cupertino home for sale and see all the photos on either of these two sites:
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.
LendingTree, a company which helps match people to loans (think: dating app for mortgages), took the data received from over 1.5 million purchase mortgage loan requests from the 100 largest cities of the United States in 2017 and ranked their real estate markets in a unique way: by competitiveness. Spoiler alert: the top two most competitive cities in this study were San Francisco (#1) and San Jose (#2)!
Three criteria were used to determine the ranking for each city. The first was the number of buyers shopping for loans before finding the property. Next, the average down payment percent. And finally, the percentage of buyers who have prime credit scores (over 680).
Why were these criteria chosen? The more competitive the market, the more competitive buyers offers must be. In a strong seller’s market, having loan contingencies or a lower offer price will hurt your chances at having your offer accepted.
Keep reading below for a snipet of the top 10 most competitive markets from LendingTree’s article, and what it means.
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!
If you want to buy a Silicon Valley home and you’re coming from outside of the area, a few things are done differently here. Rather than give a lengthy explanation, I’ll just provide a quick list of things which are different from other parts of California, the U.S. or perhaps the world.
1.) The escrow account, where money is held and disbursed by a neutral third party, is ordinarily with a title company in Silicon Valley and the San Francisco Bay Area generally. In CA it’s legal for real estate brokers to have the escrow account, but that is not the custom here. By contrast, in southern Calif., there are separate companies which often do the escrow work or a real estate broker may handle the funds, called trust funds.
2.) Santa Clara County is a “seller pay county” by tradition when it comes to the escrow fee and who pays the owner’s policy of title insurance. (Most of California is either buyer pay or split 50/50. Also, SCC is where San Jose and much of Silicon Valley is located.)
3.) Because it’s a “seller pay” county, the seller or the listing agent (the seller’s real estate agent) normally chooses the title company. Most of the time, the home owners do not have a preference and don’t know anyone working at the nearby title companies, so usually the listing agent suggests which one to utilize. If you purchase the property with a loan, you will need to buy lender’s insurance, too – and that’s a buyer cost.
4.) While in many east coast states an attorney is involved with the home buying and selling process, here lawyers are seldom involved with real estate sales – unless there is a big problem.
5.) Surveys are not usually part of the transaction here, with exceptions if there are serious doubts about the property boundaries.
6.) Buyers are provided information on natural hazards, and usually also known environmental hazards and area tax liabilities, in most cases via a professional disclosure company such as JCP Disclosures. Things such as 100 year flood plains, liquifaction zones, earthquake fault lines, underground water contamination will be revealed, if known, in most cases.
7.) In some parts of the world, buyers do not have their own real estate professionals for guidance and advocacy, but here they do. Most of the time, in the San Jose and Peninsula area buyers have their own real estate agent working on their behalf. Usually the buyers’ agents are paid by the sellers – but they do not represent the sellers. Dual agency is legal in California as long as it is disclosed (and dual agency can mean either the same person or brokerage).
8.) In recent years, it has become the norm to get pre-approved with a lender or bank prior to writing a purchase offer on a house, condo or other home. (If you meet with a Realtor, getting you set up with a reputable lender will be one of the first things he or she asks you to do.) Also it’s pretty normal to have to provide “proof of funds” to demonstrate that you have the down payment available. Sometimes our international clients are surprised at the documentation required here, so it’s good if you are aware of it upfront.
9.) It usually takes 30-45 days to close escrow on a property here (from the time the sellers accept your contract to the time you actually own it).
Finally, it should be noted that the cost of housing in Silicon Valley is truly exorbitant. Most people know that Silicon Valley houses are very expensive, but until they get out and see what things cost, they really don’t understand how extreme it is. Often I tell people to expect to pay twice as much and to get half as much. Unless you are coming from a pricey locale, such as London, Tokyo, Paris, Manhattan or Boston, you may still find yourself in “sticker shock.” A half million dollars buys a fairly small, modest home here, in an average area. A million dollars is better – you can get into a better area and better house. The “luxury market” starts somewhere between 1.5 and 2.5 million, depending on which area you’re considering.
As you may know, I have a number of blogs relating to Silicon Valley real estate (I will list them below). My family and I live in Los Gatos, and my office is in Los Gatos too, so my focus is that town and the nearby areas, such as Saratoga, Cupertino, Campbell, Monte Sereno, and parts of San Jose such as Cambrian and Almaden and Willow Glen. One area I’m working on for the blogs, as well as for my Facebook business page, Google + and Twitter are video “drive throughs” of neighborhoods. I’m starting in Los Gatos but eventually hope to get to all of the areas listed above.
Right now, I’ve got 5 Los Gatos neighborhood videos on my YouTube channel, plus slideshows of a few more areas and parks. Additionally there are some slideshows up of Saratoga and parts of San Jose. Interested in an up close view of these parts of Silicon Valley? Please visit my channel: http://www.youtube.com/PopeHandy Or start with the Los Gatos playlist, below. The first one is a slideshow of Los Gatos as a general intro, and after that there is a mixture of slideshows and drive throughs. Enjoy!
Other blogs about Silicon Valley real estate, homes and neigbhorhoods:
Valley of Hearts Delight – aka San Jose Real Estate Los Gatos Homes
Belwood of Los Gatos blog
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)
If you’ve just been hired as a high level executive at Apple, Google, Microsoft or any other high tech or biotech firm in Silicon Valley, you may be coming to the San Francisco Bay Area and Silicon Valley from an enormous home (5000+ square feet) on an enormous lot (1 acre +). You are a raging success. You are highly regarded. You are on the top of your game. Your house “back home” displays your accomplishments.
You’ve heard that prices are bad here, but how much worse could they really be? Surely you could downsize a bit to a 3000 to 3500 square foot house on a half acre with a 20 minute commute, right? And you’d still have great schools for “resale value,” right? You are prepared to give up the full basement, the pool and tennis court and the 4 car garage. That is enough of an adjustment, isn’t it?
No, I’m sorry to say, it isn’t.
That house you are leaving behind in the suburbs of New York, Connecticut, Massachusetts, Chicago, Denver, Miami, Seattle, San Diego, or wherever you’re coming from is a super high end luxury home. It’s probably worth $1,500,000 to $2,000,000. But guess what? Here, in a nice area, that’s a 2000 SF house on a 10,000 lot in a good area that’s a tear down. And in traffic, it’s a 40 minute commute. Want an acre in an area with really good public schools at all levels? Think $3 million plus. And that doesn’t mean that the house will be turn-key. You will very likely have to remodel or personalize so that you are happy with it, as most of our houses were built between the 1960s and 1980s. (Here a 25 year old home is considered relatively young.)
Why make the sacrifice to live in Silicon Valley?
Why on earth should you move here to the San Jose area when real estate prices are so insanely high? Santa Clara County is bad, and San Mateo County is worse. Why would anyone make that kind of sacrifice in living space and prestige?
First, because this is a great place to live because of who’s here. Great minds have coalesced here. From the heavy hitters like Google and Intel to the many fresh startups, the spirit of entrepreneurship is alive and well and imbues much of the culture here. Diversity reigns – fabulous people have converged here from all corners of the earth, bringing with them a richness and vibrancy that is appreciated across the area. Want Ethiopian food? No problem. Thai? Easy. Korean, French, Honduran? Check, check, check. You name it, we seem to have it, whether it’s Middle Eastern, African, Asian, Pacific Islands, or European, there’s something for everyone. (OK I haven’t yet seen an Australian restaurant, but I also don’t know what counts as classic Australian cuisine other than Vegemite sandwiches and barbecues.)
Additionally, there are a number of great universities in the region: Stanford, UC Berkeley, UCSF (for medical), Santa Clara University, San Jose State, UC Santa Cruz (math, marine biology, astronomy and more).
Second, this is a fantastic place to live because the weather encourages a life where you’re not confined to your house and dependent on a big basement. We’re talking 300 sunny days a year. This January we hit 70F one day, which is not unusual. Back in the midwest or northeast, they have beautiful snow. Snow for months and months and months. Yes, it’s lovely, but doesn’t it get old? Here people are golfing, sailing, biking, hiking year round. There are weekend farmers markets open all year! Want snow? No problem, drive to Yosemite, Bear Valley or Tahoe. Enjoy the snow for the weekend – then drive home to the land of palm trees!
Third, this is an exceptional place to live because of what’s nearby. Within an hour or two we have San Francisco, the Monterey Peninsula and Carmel, Napa and Sonoma Valleys (wine country). Within 3-5 hours we enjoy Yosemite, Lake Tahoe, Santa Barbara and much of the California Coast. (California has an incredible array of climates and a diversity of agriculture and economy seldom seen anywhere.) Minutes away, take a little trek around the valley’s mountains and hills, which are full of open space preserves, county, and local parks which make for a great escape from the hustle and bustle of the valley floor.
Moving might mean giving up the palatial house and garden and realizing that your accomplishments are simply not going to be reflected in a ginormous house and yard. The house and yard are often more reflective of when you bought rather than how you were able to buy.
The good news for those who buy here is that Silicon Valley continues to expand and be in demand. Hiring is strong. Economically, tech is leading the way and this area was one of the first to emerge from the Great Recession. Prices are tough to swallow, now more than ever, but as long as huge companies continue to hire, there’s no reason to think that real estate won’t be a wise investment.