What does it cost to buy a 4 bedroom, 2 bath home in the West Valley areas of Silicon Valley?

It can be 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 cities and areas using the formula: single family homes of 1,800 – 2,200 SF, 3-5 bedrooms, 2-3 bathrooms, on lot sizes of 5,000 SF – 10,000 SF that have sold within the last 60 days. The prices listed are the average from sales in this criteria, so areas with a higher volume of sales will have more stable averages than those with less sales to analyze. DOM means “Days on Market”, the number of days a home was listed as available before pending.

Please note that this is a rough sketch of home prices based on averages taken across large, diverse residential communities. There are many factors that will affect market value beyond these boundaries.

Now, on to the chart.

The Cost To Buy A 4 Bedroom 2 Bath Home In…

I have arranged this chart in descending order by Sales Price. This is usually how I organize the data, and you can see certain markets shifting position, moving up or down the order depending on what’s hot. Since Los Altos had no sales in the last 60 days, I have left it where it was in the last chart but cannot offer any numbers. Scroll down farther to compare this chart against past years.

2020-12-10 60D SFH 4B/2B Cost

Before we get into analysis, here’s a chart from October of 2019 for comparison. Back in 2019 I switched to analyzing the market using a 30 day window instead of the 60 days seen above. This short window of time was due to significant price changes over the course of the year – first dropping in the 2nd half of 2018, and climbing again in the latter half of 2019. You can see a chart from early 2019 down below.

In the past, I’ve done similar studies, but using a larger window of time to even out any aberrations.

In most cases, the most expensive and desirable places have either the best schools or shortest commute location or both. 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).

Palo Alto is a gorgeous, exciting area with all kinds of wonderful features – beautiful neighborhoods, lower crime, great schools, short commute. It is usually the most expensive area on this list.  But unless you found a successful startup company or inherit a couple of million bucks, it can be hard to buy a single family home there. Many people would like to live in the shadow of Stanford University, but the budget just won’t allow it. What, then?

Please use the list above as a way to get your bearings on nearby areas in the South Bay (southern part of the San Francisco Bay Area). This is not an exhaustive list – it’s just most of the areas closest to Highway 85 or the West Valley Freeway. You can study various cities, downs, and districts within the region at my stats site, popehandy.rereport.com. (Free and you do not have to register unless you want email updates.)

Finally, it should be noted that one of the main drivers of home values is school districts. In the San Jose / Silicon Valley area, the school district boundaries do NOT follow the city or town boundaries. Los Gatos, for example, has 3 different elementary school districts, with varying scores which impact home values.  So too with Saratoga and many other areas, San Jose especially! All this to say that the figures above are only ROUGH GUIDES. When you break it down to micro-markets, the picture changes more. But as a starter guide, I think you’ll find the above info helpful to give you a general idea of how far your money can go in home buying for areas in Santa Clara County from Palo Alto to Blossom Valley.

Want to do a deep dive on any of these areas? Please visit my Valley of Heart’s Delight Blog to learn about them.

Historical Comparisons of Home Prices in the Same (or Similar) Areas

We’ll start off with something fairly recent, a report from April 3rd, 2019 using the same formula the October report from the same year.

April 3rd, 2019:

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Tools You Can Use When Relocating to the San Jose Area

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. 
  • Earthquake Zones of Required Investigation can be used throughout the state to identify landslide, liquefaction, and other zones relating to quakes.
  • 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.

It is also helpful to have a knowledgeable Realtor as your resource!  Please call me if you’d like assistance in your move to SIlicon Valley. I’d be happy to help you.

 

Related Reading

Silicon Valley liquefaction zones (on the Valley of Heart’s Delight blog)

Is there a radon risk in Silicon Valley homes? (Valley of Heart’s Delight blog)

Silicon Valley: A Word About the Climate

Silicon Valley Climate - sub-tropical tempsPeople 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…)

Linguistic Quirks in Silicon Valley

Every area has its linguistic quirks or slang, and the San Jose – Silicon Valley – Santa Clara County region is no exception. Some of it is in the words we use, some of it’s the way we pronounce things, and some of it is just the way we think. If you relocate to the South Bay, you may want to know what some of these mean!

Silicon Valley linguistic quirksPlaces:

The Hill – refers to the Santa Cruz Mountains. Going “over the hill” means going to Scotts Valley, Santa Cruz, or somewhere along the coast.p>

The City – means San Francisco, even though it’s smaller in population than San Jose.

South County – areas such as Gilroy, Morgan Hill, San Martin and Coyote Valley (and outlying areas)

The Bay – is the San Francisco Bay, not the Monterey Bay.

The Airplane Park – this is Oak Meadow Park in the Town of Los Gatos

Read the rest of the post on the Valley of Heart’s Delight blog post, Silicon Valley Local-Speak: A Guide to Understanding Folks in the South Bay

 

 

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.