The San Francisco and Silicon Valley unemployment rates are a huge driver of the SF Bay Area’s housing market. Today I saw real estate market info from the California Association of Realtor’s chief economist, Leslie Appleton-Young. One of her slides makes plain why the Silicon Valley real estate market is so crazy: our unemployment rate is extremely low, behind only San Francisco (where trying to buy a home is even worse than on the Peninsula or South Bay). Have a look at the data by California metro area:
San Francisco and Silicon Valley unemployment rates
San Francisco and Silicon Valley unemployment rates plus all of California by metro area
As you can see, San Francisco has a screaming hot jobs market with only 3.4% unemployment. The San Jose metro area is only slightly cooler at 4.1%. (Unfortunately there are no “Cliff Notes” to tell where the San Francisco Metro Area ends and where the San Jose Metro Area begins – so I cannot tell if San Mateo County is lumped in with Santa Clara County to the south or San Francisco County and City to the north.)
With all this hiring going on, it’s no wonder that a frequent topic of conversation is Silicon Valley traffic patterns and congestion. A few years ago, the rush hour traffic in the morning went from about 6:30 or 7am to 9am, and the evening commute times were about 4 to 7pm. Today both are extended. I find that Highway 85 in the “west valley” areas along Los Gatos, Saratoga, and Cupertino tends to still be pretty thick with cars even at 10am. The return trip from Palo Alto (where I have some doctors at Stanford Hospital) can be sluggish as early as 3pm.
Worsening traffic from low Silicon Valley unemployment rates means that Silicon Valley real estate is even more expensive than usual for close-in locations. Many San Jose area commuters spend an hour driving into work in the morning and 75 or 90 minutes driving home in the evening (for reasons I don’t understand, the evening commute is quite a bit worse than the morning one). That translates to home prices being much, much more expensive than you’d expect in places like Mountain View, Sunnyvale and Santa Clara. For a better quality of life, Silicon Valley employees will often pay dearly to get that shorter commute. If they can get the smaller commute and great public schools, the communities are the most expensive places to live, as is the case in Palo Alto, Los Altos and Los Altos Hills in particular.
Find Silicon Valley real estate and homes for sale in “close in” locations below
Moving across the state, country, or globe always presents opportunities – but also challenges. What are the biggest hurdles for people moving to Silicon Valley?
The cost of housing is the # 1 challenge for newcomers to Silicon Valley
For most people, the hardest issue is the cost of housing in the San Francisco Bay Area. Whether buying or renting, it’s extremely costly here. Depending on where you’re coming from, it could be man, many times more expensive. Finding affordable housing is the # 1 challenge for people relocating to Silicon Valley.
How does it compare to other places? It is close to on par with New York City, about 50% more expensive than Austin, TX, and about 1/3 more than Chicago, IL. Check Sperling’s Cost of Living comparison to get a good sense of how it relates to your current home town.
Not only are the houses, condominiums, townhouses and apartments more expensive, but most of our homes are smaller too. (more…)
On another of my websites, I wrote about congestion and traffic patterns on Silicon Valley highways and roads. For many transplants to the San Francisco Bay Area and especially the Peninsula and South Bay areas, traffic is an enormous consideration on where to live and how much to pay for real estate.
If this is a topic that interests you, please take a look:
Silicon Valley’s rush hour traffic can begin as early as 6:45 or 7 am and last until 9 or 9:30am most workdays. The evening commute begins to get congested around 3 or 3:30pm with a knot of traffic in place by 5pm and lasting until around 6:30 or 7pm on some roads.
Looking for a reverse commute? Many commuters do precisely that!
If you work in Scotts Valley (just “over the hill” in Santa Cruz County), living in Los Gatos, Campbell, Cambrian Park or West San Jose will be a reverse commute for you. You’ll be going against the flow of traffic and your commute will be immensely easier.
Ditto that if you work in the south San Jose or Edendale region and begin your commute in Almaden Valley. Once you get to 85, it will be a breeze!
Work in Gilroy? Living in Blossom Valley or Almaden, you can engineer a reverse commute on the back roads or take Santa Teresa Blvd going south.
Most employees and workers try to carpool, take light rail, or otherwise beat the rush by using tricks of timing or alternate routes to avoid spending twice as much time on the road as necessary. Many companies have flexible hours – it’s worth investigating to see if you can shorten the length of your time in the car!
Relocation to Silicon Valley can be a bit of a shock to people in terms of the traffic and commute times if they are not accostomed to suburban living (which is most of the valley). Typical commute times are about 30 minutes, though some people have longer or shorter commutes, of course.
Traffic moves toward downtown San Jose primarily along Highways 87, 680 and 280 and toward the Cupertino – Sunnyvale – Mountain View areas along Highway 85 (and 280). Bringing traffic in from the south county is 101. Other roads getting a lot of use too are 17 and 880 (same road, different stretches), San Tomas Expressway, Montague Expressway, Lawrence Expressway, Santa Teresa Boulevard, Saratoga-Sunnyvale Road, Stevens Creek Blvd. and Almaden Expressway.