Notoriously high home prices are the norm in San Jose, California, and the rest of Silicon Valley. But in the hot housing market of 2021, even these homes are getting immediate and multiple offers when they hit the market.
Local Coldwell banker Agent Theresa Wellman said the region’s seven-figure price tags, which have a median listing price of $ 1.4 million, haven’t scared off potential buyers.
“We’re seeing eight to ten deals on homes as soon as they go to market,” Wellman said. “Honestly, I haven’t seen this kind of market for homes in San Jose since 2009.”
Sales of existing homes in San Jose grew 47.9% year-over-year in March 2021, according to a report by Norada real estate investments. Active listings in the area have declined 16.6% since the start of 2020, pushing up prices for San Jose-Sunnyvale-Santa Clara subway housing by 11.1%.
Wellman said the market in early 2020 was “slow,” but as the COVID-19 pandemic began to spread across the country, interest in Silicon Valley homes began to increase as High-tech employees living in the area were seeing their stock options – in addition to their already high salaries, pay dividends.
“You have a lot of young buyers – the Millennial Wave – looking to buy in San Jose, because they work at LinkedIn, or Google, or Apple, who are all in this business,” Wellman said. “A lot of times it’s a husband and wife, and they both work at a tech company, so putting down a $ 2 million house down payment isn’t much of a problem for them.
Plus, Wellman said, most of the employees at large Silicon Valley tech companies were working from home during the pandemic, saving them even more money on top of their already high salaries.
“No one traveled anywhere, so people were really able to save,” she said. “I have seen many offers that are at least 20% off the asking price.”
Several agents noted that demand in San Jose has remained high due to the lack of building land. To the west is the Pacific Ocean and to the east are mountains, which is why neighboring states like Idaho, where land and house prices are cheaper, see large numbers of Californians. to move out.
Other areas of the country that have seen a huge influx of California movers include Utah, Colorado, Bay City, Michigan, and Harrisburg, Pennsylvania. Some Californian movers even move north to Seattle where prices are relatively high.
California’s appeal is still strong, however, said Andrea Finney, a San Jose-based real estate agent.
“I mean, this is California, right?” Really anywhere from central California through the peninsula and the northwest, there’s just a ton of demand right now, ”said. “The prices are high, but it’s a simple problem of supply and demand – stocks are low, even below what they normally are [in San Jose], so you will inevitably receive a lot of offers on any home that is put up for sale. “
A recent study by Redfin found that nearly a third of users sought to relocate to another metropolitan area in April, based on a sample of over 2 million Redfin.com users who searched for homes in 87 metropolitan areas . Phoenix, Las Vegas, and Sacramento all saw more than 6,000 Redfin users move into the respective subways in April.
Andrea White, a Sacramento-based Redfin agent, said the more affordable domestic subways tend to be the most popular destinations for Redfin.com users looking for homes in another part of the country and even California. .
“When potential buyers look at the ads in Sacramento, they realize that their rent in the big cities costs more than a mortgage here,” White said. “Most of them don’t worry about the competition being intense and house prices going up because it’s an attractive lifestyle change. Employees who have the ability to work remotely often decide that it is worth leaving a big city to live in a bigger house at a lower cost. “
“Less money” does not appear to be a problem for many housing seekers in San Jose, however. Wellman said she recently helped a couple move from their rental home to a $ 2.5 million home.
“Most renters in San Jose can qualify for a home here,” she said. “There is currently a lot of money invested in real estate.”