Realty One Group
Silicon Valley, CA
We have a robust real estate market in Silicon Valley near high tech job center. This area encompass much of Cupertino school district map covering 94087, 95014, 95129 zip codes. The homes are close to high technology job centers and public schools are exceptionally good. Many “spelling bees” on TV and high school science fare finalists live here. The homes are mostly tract-type built between 1950-1960s. Some older homes have been demolished and rebuilt as contemporary homes.
Approx. boundary of West San Jose neighborhoods
Single Family homes: 3 br+, 2 bath+ (1300-2000 sf)
Total listings homes = 85
Inventory: 0.8 month (2.5 month is healthy)
Sold/Asked=106.4% was 116.7% (2015 vs 2014).
Marketing time=14 days
$1.716 M (Apr-June 2016) $1.657 M (1 yr ago) +3.5%
$1,050/sf $1,021sf +2.8%
Since 2014 the teens (+16.2% and +15.6% price increase) enjoyed during 2013 through 2015 have come to a crawl. Prior to 2013 it was +21.2% price increase. The home price appreciation rate is slower than overall San Jose City prices in reference 1 below and prior quarter summary.
Consider this, if one wants a “typical” home at $1.7M with 20% down payment at 3.75% mortgage interest the monthly PITI is over $8,500. The minimum required annual income for the 80% mortgage is over $221,000. That does not include car payment, credit cards payments or any other loans. Applicants need to have $340,000 savings in the bank for the down payment. It is hardly attainable even with a dual income family. Most new residents manage such life style.
Historical avg. sold home prices near Cupertino School district
We are having a fantastic real estate boom since last quarter of 2011. It has been over 5.5 years. After this summer, if the local economy can not support the momentum required, the home prices can stall or slide slightly.
This may not be a bad thing as the neighborhood home prices are overheated too long. $1,050 per square feet is a very challenging level. Below shows the historical real estate market momentum using 1 year moving average. Note that it has tapered off somewaht since 2014 third quarter. If interest rate or employment changes we can expect it go lower affecting home value. Apple is moving its campus II to east part of the neighborhoods and any hiring or lack of work can impact this market. There are many high tech firms. Apple is the largest employer in the area. Some companies are doing better than others.
San Jose City real estate historical momentum
Historical sold vs asked home price ratio
San Jose, CA June Home Prices (June 2016 San Jose Home prices)
Silicon Valley West side homes (2016 quarter 1 West side Silicon Valley home)
Shueh, Sam (Sam Shueh Blogs)
Shueh, Sam (Sam Shueh Realtor website)
I‘ve called San Francisco South Bay home for over 30 years. We love this area and all it has to offer, and I enjoy sharing what I know about homes. I documented in several books about Silicon Valley history. I have much expertise in real estate…please give me a call. ( Four-O-Eight) 425-1601 Sam Shueh Realtor website