The adage “Location, Location, Location!” has long been applied to real estate markets, and with good reason. Many factors about property locations will impact not only the value and market prices of homes, but also the demand and viability of a market. The Silicon Valley, encompassing San Jose and much of the Santa Clara County is no exception.
What is an exception is how strong this region continues to be regardless of other pitfalls facing neighboring markets, the state and the Nation. The San Jose Mercury News has summarized the current Silicon Valley Market in a recent article, highlighting the ongoing increase of sales in 2017. The housing supply has remained low while the demand for homes has continued to climb. Home values in the region have gone up on average between 4-7% as of August 2017. In Santa Clara County, comparing year to year data, sales were up by 13% in July, while other Bay Area markets saw a decrease.
Throughout 2017 the Silicon Valley market has proved to be unique in the state, with its ongoing rise in sales and values, even during the Summer months which is typically second slowest season of the year. This region has not slowed down in terms of buyers’ activities or offer activities. Following are some examples we have come across within the market.
In Sunnyvale, we generally have to compete with over 10 bidding buyers. Much of the time, these offers do not have any contingencies included, creating a true price bidding war, where the top dollar will win. The accepted price can often be 15% – 20% over the asking price. We recently had a 3 bedroom, 2 bath, semi-remodeled, tenant-occupied home which sold for $1,810,000 with an original list price of $1,149,000.
Due to the recent announcement of the new Google campus in Downtown San Jose, the real estate market has also boomed in recent weeks. A 3 bedroom, 1bath 950-square foot, single family house, off West San Carlos St. next to commercial properties (including a hookah bar) received 8 offers and went $100,000 above asking price. This is a prime example of the area location being more important to buyers than the specific neighborhood, the demand to live in the Silicon Valley is precisely that high.
From a buyer’s perspective, we are seeing buyers who are eager to get into a home before list prices rise. Because each accepted offer includes a new series of comparable reviews, often, buyers will forego imperfections in a property. Some buyers who are already renting have realized their budget can’t catch up with the rising prices of homes, and are seeking to extended their lease instead.
There has been an ongoing debate over whether the housing market in Silicon Valley will crash for the last 3 years. Our position has remained the same, the demand is outpacing the speed of the new developments and property units, as well as the number of sellers ready to list their property. For many would-be sellers, they can’t afford anything else within the county; the best option for many who want to remain in the Silicon Valley is to stay where you are if you already own a home.
All in all, Haylen Group believes the Silicon Valley housing market will continue to stay strong. Sunnyvale, Cupertino, West San Jose, Campbell, and Santa Clara have become too expensive for many buyers. If you are still interested in investing in Silicon Valley, the following San Jose neighborhoods are the ones we feel the prices are more affordable (relatively speaking), and have great appreciation potential: Berryessa, Rose Garden, Auzerais-Josefa, Sunol Midtown, Japantown, and Cambrian Park.
If you are ready to buy or sell a home, working with a Realtor® who understands the region and local housing trends, will make for a better experience. We at Haylen Group are here to help you with all your real estate needs! As your agent, we will strive to work together and give you the best support we can. Call Helen Chong at (408) 800-LIST or email at Helen@HaylenGroup.com. You can also visit us at our website for available listings and additional information.
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Photo two Attribution- By David Sawyer from Campbell, California, United States (House) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)%5D, via Wikimedia Commons
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