Below please find real estate market reports for three Silicon Valley counties where I’m most active: Santa Clara County, San Mateo County, and Santa Cruz County. First we’ll provide the data for single family homes, then condos and townhomes, for each region. (“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 I don’t usually sell there, so am not covering it in my reports.)
Late Winter 2020-2021: Three Silicon Valley Counties
Santa Clara County Real Estate Market Report for February 2021
First, 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 area has generally come up in price about 10% since last year, though in February the median sale price is over 12% higher in 2021 than in 2020! Homes took about a half-week longer to sell in February compared to January, but compared to 2020 they’re taking about a half-week less to sell. Of course, it hasn’t been even growth. While 2020 had a seasonally hot winter, it experienced major changes with the pandemic putting pressure on the market stifling spring activity and creating a sustained high demand with severely low inventory. Typical seasonal trends around this time are cooler creating a softer market, but pent up activity is higher than usual driving both prices and the sales to list price ratio above the norm. Santa Clara County is heating up for an early spring market without experiencing more than a hint of winter cooling earlier this year.
And the condominium and townhouse report for Santa Clara County:
This year shows about a 7% rise in sales price for condos and townhomes since last year, and a slight rise in sales price, list price, and active inventory from last month.
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!
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.
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.
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
Local concerns also include environmental ones, such as SuperFund sites. here you can see SuperFund sites in reuse (meaning offices and homes on those 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.
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.
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.
A School District Map of the County with school district boundaries will be a big help to you here, as schools are the #1 thing that drive home values. You can buy one at bookstores or online for about $5
People coming from out of the area to relocate to Silicon Valley might not know what to expect from the weather in the San Jose, Santa Clara County, or Silicon Valley Area. Does this part of California ever rain? How hot is the summer? What is the climate like?
In a nutshell, this is a “sub-tropical” area, or a place that enjoys a mild “Mediterranean climate” that is most heavily influenced by the close proximity of the shoreline and the Pacific Ocean. Temps are mild, we get little rainfall compared to many parts of the country.
More specifically, we usually get about 10-20 inches of rainfall a year (less on the east and more on the west) and enjoy as many as 300 sunny days a year. Winters seldom see many hard freezes (but they can happen).
A typical summer day has highs in the mid to upper eighties but very low humidity – so it feels much cooler. Heat waves and heat inversions can run the temps up to the low to mid 100s in the hottest parts of the valley. Luckily it doesn’t happen much, or stay for long! Once in awhile, a rare storm in summer will bring high humidity and thundershowers, but for the most part, summers are dry. The hottest month is typically August.
The coldest month, usually, is December. A January day will often have a high in the 60s or 50s, depending. A cold day here is when it does not get into the 50s (not too common). By February, though, the worst is usually over and it’s even possible to have freak warm days that hit 80 degrees!
Our weather varies from year to year. Some years we get drought conditions and may require water rationing . Other years we get lots of wet weather from the Pacific – temps are warmer but there’s much too much rain: those are the El Niño years. Most often, though, winters aren’t that bad – evenings can be nippy as temps drop into the 20s on the worst nights in December or January. It will make the news that people should cover their citrus trees so they aren’t damaged by the freezing temps. (more…)
What can you get for your housing budget? What are you able to afford to buy in Silicon Valley?
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.
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.
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.
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