I have lived and worked in Silicon Valley since 1963. In 1963 San Jose was a sleepy town with a couple of shopping centers, a freeway that actually had traffic signals, and Fruit Packing Plants and many Fruit stands along the roadways. Most students walked to school cutting thru orchards.
Housing was cheap. The weather was good and the homes could be built cheaply because they did not require much insulation and a simple foundation. Builders bulldozed the orchards and built mostly small track homes. Still people did not want to come to San Jose. To attract buyers a builder put a model home on top of Macy's in San Francisco.
Many tracks were build, build small, and built cheaply. A 3 Bedroom 2 bath 1500 square foot home could be purchased for $13,000. A lot of people bought the homes with no money down. My parents were paying rent to American Savings and Loan and one day they received a letter that said "come on down, sign these papers, and you now own the home"..the new mortgage payment was a little less than the rent payment.
Then somebody invented a computer chip. Somebody invented the Internet. Techies started to arrive. More and more computer companies opened. IBM opened a large plant in south San Jose..then Hewlett Packard..Sun Micro Systems...Lockheed was always just north of San Jose. We have more computer companies today than we had people in 1963.
Real Estate Value Explosion. Location, Location, Location. What was a horrible location in 1963 is now considered Prime Location..being near Apple or Google or Facebook, Adobe, or Cisco is a Prime Location.
So - many of the people who could only afford the cheaper homes in the past; smaller homes but for some reason a lot of these homes were built on lots considered larger for a California Metro area (6000 is normal). Many of the lots are 7500 to 10,000 square feet. New Techie buyers came in, over paid for the home, tore it down and built a large attractive home. One by one these neighborhoods are being transformed.
People who purchased these homes 25-30 years ago are selling and moving to Central Valley and paying cash for 'dream homes'. In the show Beverly Hillbillies, Jed Clampet had a financial adviser in his banker and Ms. Drysdale. For all those moving out get your finances and taxes in order and realize that there will be for almost everyone a long term Capital Gains tax for Federal and State. If the gain after adjustments for a married couple is more than $500,000 then in most cases the tax will be dure.
Having given the whole history of the valley the blog boils down to this: Get the information about Capital Gains Tax to make sure you prepare properly for the next sale..
One more comment - agriculture. This valley has a top soil of more than 100 feet..... Why would we ever destroy one of the best places to grow fruits and vegetables to grow silicon chips?
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