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.

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Silicon Valley Homebuying and Bidding Wars

What do you need to know if you are shopping for a home in Silicon Valley right now?

First, you need to understand that possibly more than in any other time, it’s a deep seller’s market, meaning you most likely will be competing against multiple offers.

Homes for sale are not as abundant as normal, and there are a lot of buyers trying to purchase a house or condo in the San Jose area.  Not enough supply, too much demand equals multiple offers and rising prices.  (You can check the current Santa Clara County real estate market statistics at popehandy.rereport.com.)

Secondly, if you want a chance at buying a property in Santa Clara or San Mateo Counties, you must have a great “offer package”.

It is imperative that you have a solid down payment, 20% is a minimum standard in our area, but often it takes 25% or more to convince sellers that they should take your offer over the others. Cash is king and you may get out bid by an all cash offer, especially if it’s also a non contingent offer.

If you include any contingencies for inspections, loan and appraisal, they will have to be fairly short to compete in multiple offers.  A 17 day loan contingency is a pretty sure fire way to get eliminated from multiple bids.

Want to avoid a bidding war? You’ll have to be willing to compromise, possibly quite a lot, to be the only offer in this market! But don’t confuse being the only bidder with getting a good deal – homes that have been passed over by other buyers will have problems, some of which may not be “fixable”

Continue reading on the Valley of Hearts Delight blog:
http://sanjoserealestatelosgatoshomes.com/homebuying-in-silicon-valley-today/

How is buying a home in Silicon Valley different from in other parts of the country?

How is Silicon Valley Different?Every so often I am asked how the San Jose – Silicon Valley area is different from other parts of the US for home buyers. What did they need to be concerned about here versus in the midwest or east coast? They knew about earthquakes, and having to strap water heaters for earthquake safety, but what about earthquake insurance? Are termites a problem here? What things should home buyers worry about here that perhaps are not issues elsewhere?

Silicon Valley Differences

This is a great question, and the answer to it could fill a book! But here are some of the major differences that most relocating buyers, especially those from out-of-state, should be aware of.

Natural Differences

    1. Earthquakes (of course) and everything related: selling requirements, insurance questions, related natural hazard zones (liquifaction zones, landslide areas, etc.), where fault lines are located, etc. People moving to California generally know that they need to be concerned about seismic occurrences, but perhaps not all the related areas.
    2. Expansive clay soils: when you read your history, you may have heard that in early California, homes were made of adobe bricks. What may not have been clear is how strong that soil is. I have a couple of blog posts on my Valley of Hearts Delight blog on this topic:
      Cracked Foundations, Adobe Clay Soils and Water in Silicon Valley
      What To Consider When Buying a Hillside Home in Silicon Valley
    3. Termites: in general, there are 2 types of these pests active on the valley floor: drywood termites and subterranean termites. (In the Los Gatos Mountains and closer to the Pacific Ocean you may also encounter dampwood termites.) It may be possible to try to prevent subterranean termites with bait stakes placed underground, but there is no way to prevent drywood termites. You can fumigate your home and within a few days they could be back (but won’t be visible for a year or two at the earliest in most cases). Termites do better here than in many places of the country simply because it’s warmer here.  They may swarm twice a year rather than once. Please also read this post for more info:
      How Often Should You Get A Termite Inspection?
    4. Fire / Water: more destructive fire seasons have brought about new, stronger safety regulations including mapped fire zones, higher insurance premiums, and construction limitations. On the other end of the spectrum, the Bay Area has tsunami hazard zones (you can spot the evacuation signs around the bayfront) in addition to the usual flood and dam inundation hazard zones. And expect drought to impact water prices plus restrictions on water useage.
      Are Fire Seasons New?

Structural Differences (Houses)

    1. No basements – there are very few homes with basements here (the very old ones and those which are newer and extremely expensive).  A very common question is “where do people store all their stuff if they don’t have a basement?”  For most households, the storage center tends to be the garage. Built in cabinets and storage shelves are highly appreciated. When people purchase homes with 3 car garages, often that 3rd space is not for a car, but for “stuff” – luggage, holiday decor, momentos, old files, etc.
    2. Foundations – older homes are usually built on a “raised” foundation or perimeter foundation with support beams under the center part of the home. Some types of homes, such as Eichler designed houses (mid-century modern ranch style) were built with slab foundations and actually have radiant heating (heating coils built into the slab). Newer homes now tend to be built on slab also (10-15 years of age or less). Most of our valley has 40-60 year old ranch style homes, though, and these are mostly “raised” foundations with a crawl space.
    3. Houses are built to move in case of an earthquake – most of our homes are built with wood and are intended to move in the case of an earthquake.  It is very rare to find a house made out of brick here because they don’t do well in case of severe shaking.
    4. Suburban sprawl – Silicon Valley was built for cars. While BART and VTA are expanding access to some public transit routes, it’s still a very car-dependant area. The median lot size for homes sold in San Jose over the last 2 weeks (as of this writing) was 6,310 SqFt, and the median home size was 1,568 SqFt. Depending on where in the world you are coming from that can sound quite small, but it’s a relatively typical suburban home in this area.

These are perhaps the most salient differences home buyers relocating to Silicon Valley might want to be aware of. Each of these topics could be a blog post of its own, and I have written about all of them! Our blogs offer information on the local market and home buyer, owner, and seller concerns, and we also provide insight into some of the resources and Tools You Can Use When Relocating to the San Jose Area, but an experienced professional Realtor will be your most useful resource for navigating real estate in Silicon Valley. If you’re ready to move to Silicon Valley, we would love to hear from you!

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?

 

How is home buying in Silicon Valley different from other places?

Home buying in Silicon ValleyIf 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.