by Mary Pope-Handy, Clair Handy | Mar 5, 2025 | Natural hazards
Lots has changed in the last year, and a general Silicon Valley real estate update is in order. This will be a brief post with broad commentary on what newcomers to the San Francisco Peninsula, South Bay, and nearby areas can expect in these markets. Particular cities, neighborhoods, and price points may be different.
- The housing market is quite robust for single family homes (mostly detached houses, but sometimes a duet home – not the same thing as a duplex*)
- It’s a far cooler market for condominiums and townhouses. (Condo is an ownership type, townhouse is an architectural style. Many townhomes are held in condo ownership, but some are planned unit developments, or PUDs. You can read more about the difference and why it matters in our other article through that link.
- In Silicon Valley, most of the time sellers provide pre-sale inspections and disclosures for buyers to review before putting an offer in on the property. Buyers are expected to read and sign for these disclosures before submitting an offer, and most buyers don’t hire their own inspections once in contract unless they need more details or bids on a particular item of concern. Often homes that sell within 10 days or so get multiple offers and sell with zero contingencies. This is often a sharp change for people coming from outside of this area with experience in other markets.
- Cash offers are happening, but the majority of sales happen with mortgages. Depending on the price point and home type, the percent of cash offers might be 20-30% of the market. But cash isn’t always king: sometimes cash buyers overestimate the value of their cash and they “lowball” the offer, or have less favorable terms. Sellers will wait a little longer and bet on the bank if it makes them more money, or they get their terms!
- A recent change here as with everywhere else, home buyers working with an agent need to have a written buyer-broker agreement to privately tour properties and be represented when making an offer.
- At open houses, the hosting agent is supposed to collect the visitors’ names and whether or not the visitor has a real estate agent, usually done on a non-agency form. This is NOT supposed to be for marketing, but only for clarification should there be a question later about who is or is not representing that buyer should they submit an offer. Some hosting agents will accept a business card from a visitor’s buyers agent instead of signing in. Some misuse the form, or are overbearing and will follow up for your feedback after the showing or to seek your business. I suggest that my clients put my contact info into the form, or just let me show them privately (something we and many clients prefer anyway).
- While some buyers get the first home they bid on, most write 2-4 offers before having one accepted. This is really not a new trend in the Silicon Valley real estate market – it’s been this way for years, but it can still be a shock to people relocating here. Extreme competition for the best homes, a shortage of inventory, and our persistantly hot market make it a challenging market for even the most qualified buyers.
- In our experience, only 50% of buyers who say that they want to buy a home will do so in the first year. Most of that is due to sticker shock and struggling with paying that much for a home. Yes, even for buyers with good Silicon Valley salaries! Unfortunately, waiting can be even more expensive as home values continue to grow.
- Areas with short commutes to major employers, and those with good schools, are hot all the time. For instance, Cupertino offers both and is a highly sought after and competitive market.
- Insurance has been a particular challenge in recent years, especially fire insurance. Fire risks and related insurance costs and availability are major concerns in areas near or in the hills particularly.
Silicon Valley real estate update in 2025 – what about condos?
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by Mary Pope-Handy, Clair Handy | Feb 22, 2025 | Buying Tips, HOA, Real Estate
Photo © Marketing Templates Co. via Canva.com, Money © Lightboxx from Getty Images via Canva.com
Low HOA reserve accounts are surprisingly common, and when I asked the HOA expert, Jacquie Berry, about my observation, she said that 75% of HOAs in California have underfunded reserve accounts. This is a big deal for many home buyers, particularly first time buyers and seniors downsizing to a common interest development after living in a house without an HOA.
What is a reserve account?
Homeowners Associations have two budgets and bank accounts: one for operating expenses (right now items, this year) and one for long term costs (anything more than a year out).
To ascertain how much should be in that reserve fund, the person doing the budget estimates the replacement cost of the item, such as the roof, in today’s dollars and then factors in the rate of inflation, often about 3% per year and calculates the total cost needed in whatever year the replacement is expected to happen.
Why are so many HOA reserve accounts underfunded?
I asked Jacquie this question: why are all of these homeowners associations so poorly funded? She replied that many of them won’t save today for something needed in the distant future (with the underlying thought being “when I may not even live here anymore”.) It appears to be a common practice, at least in some homeowners associations, to simply kick the can down the road.
What’s the risk with a low HOA reserve account?
The risk with low HOA reserve accounts is multifaceted. We’ll touch on a few of them here.
Naturally, one of the first risks is the HOA insisting that home owners pay more. They are allowed to raise the monthly dues by as much as 20% of the previous year’s fee annually. Sometimes, though, that’s not enough. The next approach, when a large sum is needed, it to have a special assessment.
Special assessments get voted in when a majority of the HOA wants to get certain important projects done and there are not sufficient funds for the project. Recently we’ve seen these special assessments get levied for $30,000 – $50,000 or more in some cases. But that’s not all!
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by Mary Pope-Handy | Nov 6, 2021 | Weather, Natural hazards, Relocation, Weather
Bush Fire Image © ascione from Getty Images Signature via Canva.com
Fire season is a concept we are familiar with in the West Coast, but it may be foreign to those moving here or living far away.
Not long ago I was on the phone with a cousin from the East Coast. That area had recently been hit by Tropical Storm Ida and over here we were being smothered by the smoke from the Northern California fires (Caldor, Dixie, Tamarack and some others). Aghast at enormity of it all, my cousin asked the poignant question, “has there always been a fire season, or is that a recent thing?”
Fire Season
Briefly, yes, California has always had a fire season.
One major reason people (myself included) love California is for its mostly dry Mediterranean, subtropical climate. However, that ideal dry hot summer climate is also a perfect tinderbox. Without summer rain, the grasses and annuals die off and many native perennials go dormant. Dry hot winds, frequent from around August through October, dry out the landscape even more. By this time, an open hillside is A-grade kindling – one little spark and it’s a recipe for disaster.
Even in wet seasons with no drought, the summer will always be hot and dry with a high risk of ignition. So while fire season is nothing new, it’s longer and much worse than it used to be.
Fire and California Homes
For California homeowners and buyers, the increasing fire danger is strongly felt. Most buyers tell me they do not want to be in high fire risk zones, but might not always know what to avoid. State and local governments have put more preventative regulations in place to keep homes safe from wildfire, both on builders and homeowners.
If you are relocating to Silicon Valley, you may be wondering what the risks of wildfire are like for this area. There are plenty of resources available online, and I always recommend clients to look at the hazard maps such as those listed in my article Tools You Can Use When Relocating to the San Jose Area. While the mountain and foothill communities may be at risk of wildfire, even the lowlands are experiencing another concern that comes with harsher fire seasons: smoke and air quality.
In my other blogs I have more articles dedicated to the topic, so I won’t go into detail here. I encourage you to view some of my articles about Fire at the Live In Los Gatos Blog or over at the Valley of Heart’s Delight blog under the Natural Hazards and Safety categories if you’re interested in learning more.
Some of the oldest trees living in California have the scars of past fires, sometimes multiple. Native plants have evolved and adapted to fire and can thrive in its shadow. And for as long as people have lived here, they have contended with seasonal fire danger.
Fire season 2021 has come to an end with the arrival of rain – a double bounty since we are in the middle of a severe drought. When the rains come, the problems aren’t over, though. In burned out areas, the next challenge will be mudslides and further damage to the fire zones. This is an old problem also, I remember hearing about the mudslides following the fires as a kid growing up in the 60s and 70s.
“Fire hardening” is an important concept for those of us who live in or near large open spaces with hills especially. I suspect it will grow into a cottage industry with new experts appearing to advise or possibly install features which will make our homes and landscaping more resistant to advancing flames.
by Mary Pope-Handy | Aug 21, 2021 | Weather
Fire season has been getting longer in Silicon Valley, and with it are smoke and air quality issues. The Bay Area is full of micro climates, and that translates to areas which are more or less impacted by these problems.
- Windier areas, where the breeze blows from the San Francisco Bay or the Monterey Bay to inland areas may have the cleanest air if the fires generating the smoke are far away
- Lower elevation areas may have less smoke if the blazes causing the smoke are far (distant fires seem to cause the smoke to be higher up)
Weather patterns, smoke and air quality
Please note, I’m not a meteorologist, but am going to share my observations from living here most of my life (except a few years from age 18-23, I’ve been in this area).
Our Silicon Valley weather is dominated by the nearby Pacific Ocean. Most of the time, the coast enjoys foggy mornings and sunnier afternoons, and the inland areas are impacted by that. When the coastal overcast burns off, clouds recede from the Monterey Bay. In the mid to late afternoon, winds reverse, and breezes pick up. This is also true with winds coming off the San Francisco Bay and moving south along the Calaveras Mountains.
Wind patterns are key for the discussion around smoke and air quality.
Most of Silicon Valley is in the Santa Clara Valley. Valleys can trap air in what is called a heat inversion at times (a warm area prevents the air below it from moving around – we see this in winter sometimes). When that happens, we get a “Spare the Air” day and are asked to do what we can to help the air pollution problem. The coastal areas don’t have this issue, so usually don’t have smog. They have plenty of wind from the ocean. If there is a fire elsewhere in California, most of the time it does not impact the coast to the same degree as the inland areas.
As a general rule, when the fog is pushed in from the Pacific, it comes through any low points or passes it can find. The foggier areas to the north of Silicon Valley, such as Daly City and San Francisco, don’t offer much resistance to the push from the Pacific. Nearly always, coastal wind means cleaner air. (more…)
Lots has changed in the last year, and a general Silicon Valley real estate update is in order. This will be a brief post with broad commentary on what newcomers to the San Francisco Peninsula, South Bay, and nearby areas can expect in these markets. Particular cities, neighborhoods, and price points may be different.
