By Ben Irwin. San Jose Spotlight.
Median home sales prices have skyrocketed in Silicon Valley's hottest housing markets, and residents are moving out.
A new study by Joint Venture Silicon Valley found that the median home sales price in the region will peak at $1.53 million in 2022, driven by three major competitive markets: Fremont, Santa Clara and Sunnyvale.
Heidi Young, a senior fellow at the Silicon Valley Institute for Regional Studies, part of Joint Venture Silicon Valley, said high demand in these “hot” housing markets in Fremont, Santa Clara and Sunnyvale hasn’t saved these cities from more people moving in than out. It’s a trend across the region.
“That’s not a one-off, if anything it’s indicative of what’s happening across the region… even booming housing markets are not exempt from that,” Young told San José Spotlight. “That’s the reality of the region.”
Santa Clara saw the largest growth in median home sales price at $1.41 million, up 17 percent from 2021. Millennials remain the predominant homebuyers in Santa Clara, with homes averaging nine offers and selling for nearly 10 percent above asking price, according to the study.
The study also uses data from greatschools.org, which rates schools based on test scores, academic progress and equity, to help prospective buyers decide where to live.
According to their data, Santa Clara elementary schools, for example, scored just five out of 10. In the other two hot markets, Fremont elementary schools scored between three and seven out of 10, and Sunnyvale schools scored the highest with a rating of nine out of 10.
“School ratings are obviously a big draw for families when purchasing a home,” Young said.
Will Chea, president of the Santa Clara County Association of REALTORS, a trade association representing more than 6,000 real estate professionals in Santa Clara County, told San José Spotlight that Santa Clara’s school rankings are just one aspect of the city’s broader appeal. More than half of new homebuyers in Santa Clara came from within the county, suggesting the area continues to attract local residents, he said.
“The substantial increase in property values could mean an influx of higher-income residents, which could lead to improvements in local schools and decrease the poverty rate over time,” Chea told San José Spotlight. “The fact that more than half of (Santa Clara’s) population is foreign-born indicates a diverse and multicultural community, potentially contributing to its unique character and appeal.”
Although property values in the county have increased as a whole, data from the Santa Clara County Assessor’s Office reported that a significant number of properties decreased in value from 2,595 last year to 19,325 this year. Aside from a brief spike in 2020 during the first year of the COVID-19 pandemic, this is the first time the county has seen such a large decline since the 2008 financial crisis, County Assessor Larry Stone told San José Spotlight.
In neighboring Alameda County, Fremont is among the most competitive housing markets locally and statewide. The 94536 area code, which includes the cities of Glenmoor, Centerville, Parkmond, Cherry-Guardino, Canyon Heights, Vallejo Mills, Niles and Cabrillo, is where the dollar goes the furthest, with a median price per square foot of $811.
Sunnyvale rounds out the study’s list of “popular housing” markets as the most expensive, with a median home sales price of $2.4 million, though that’s still down 6 percent from 2021.
“It’s clear that the (Sunnyvale) area attracts families because of its high-quality educational offerings and economic stability,” Chea said.
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