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What is my west San Jose (Silicon Valley) home worth?

By
Real Estate Agent with (408) 425-1601 CA bre 1519182

                                 Sam Shueh

 Realty One Group

                                                 Silicon Valley, CA

 

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 finalialists 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 SFH = 85

                             Inventory: 0.8 month (2.5 month is healthy)

                              unemployment rate=3.1%

                              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. 

 Cupertino School home avg prices

                                             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.

SJ Real Estate Momentum                         San Jose City real estate historical momentum

Sold vs listed ratio                              Historical sold vs asked home price ratio

 

SOURCE:

 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)


  

Sam Shueh

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

Comments(3)

Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Sam

Your area is certainly impressive in terms of the home prices and what it costs to live there. One wonders when the price increases will end!

Jeff

Jun 22, 2016 10:41 AM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Jeff Dowler CRS 

These homes are still not that expensive. Once it is over 2.5+M the affordability is not there for majority new home owners.  They are moving 8,000 employees to Apple 2 Space Ship this year together they have 41,000 Apple employees in the general area.

During the Great Recession with 15.6% unemployment the price falls just 8% as the chart suggests.

Jun 22, 2016 02:09 PM
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

I will have Palo Alto and Los Alto neighborhoods analyzed in a day or so.

A modest home will cost $120,000 annual PITI for 30 years. The catch is do you have $280K min annual income?

Jun 23, 2016 01:25 AM