Why do buyers buy homes in the Silicon Valley?

By
Real Estate Agent with Compass CA DRE# 01215160

Understanding the real estate market varies per area and per price point. Fortunately for us Realtors® at Compass, our Chief Economist, Selma Hepp gathers the information we need to be better informed and to better help our buyers and sellers. By taking time to read, study and understand the data provided we can help educate our clients and understand the motivating factors for purchases.

In the Silicon Valley, for example, there are some interesting statistics at prices under $2,000,000 and those over $2,000,000

A few of the facts gleaned from questionnaires gathered between 1/1/16 and 12/31/18 include:

                                                                 Under $2,000,000                               Over $2,000,000

Intended use of property by buyer 

  • Primary residence                                                  85.86%                                                  84.52%
  • Investment/rental property                                       7.58%                                                   4.52%
  • Develop Property and flip                                        2.53%                                                   5.16%

Buyers reason for purchase

  • Tired of renting                                                       28.13%                                                   9.92%
  • Desired a larger home                                             13.13%                                                 24.43%
  • Desired different location                                        11.88%                                                 27.48%
  • Changed jobs/relocated                                             6.25%                                                  9.16%

Median sales price by reason for purchase

  • Tired of renting                                                  $1,175,000                                             $2,600,000
  • Desired a larger home                                        $1,480,000                                             $3,682,500
  • Desired a different location                                $1,700,000                                             $3,262,500
  • Changed jobs/relocated                                      $1,414,000                                             $2,774,000

These are just a few of the data points available, and interesting ones I think. Look at the responses given for "reason for purchase" in the two price points--quite a change.

If you would like to receive the charts from which these points were taken, please let me know by 3/1/19 and I will be happy to email them to you.

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Rainmaker
3,199,891
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Lottie. California pricing has always amazed me. Some understandable and much not! Enjoy your day!

Feb 14, 2019 04:22 AM #1
Rainmaker
3,012,974
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Great analysis, Lottie, of your market in Silicon Valley. Like Wayne Martin , I never fail to be gob-smacked by your home prices! Happy Valentine's Day.

Feb 14, 2019 05:28 AM #2
Rainmaker
1,748,503
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Hi Wayne Martin  - No question that our housing prices are high. But--we're outdoors 12 months of the year. Low utility bills!

 

Feb 14, 2019 10:41 AM #3
Rainmaker
1,748,503
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Good morning, Nina Hollander - indeed, high prices, but a quality of life that many (including me) enjoy. I love being outside 12 months of the year.

Interesting hearing from buyers at different price points what affects their buying decisions.

Feb 14, 2019 10:43 AM #4
Rainmaker
751,075
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

Always interesting to see data and information, there are so many different ways to look at it.

Feb 14, 2019 11:50 AM #5
Rainmaker
1,869,457
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good afternoon Dorie - it is good to have those metrics to understand your marketing.  I see the diverage with reason to move.  Prices are high for those under 2,000,000 but rents keep going up.

Feb 14, 2019 12:13 PM #6
Rainmaker
2,494,245
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

That's very interesting data for home buyers and sellers in the silicone valley vicinity, Lottie.

Feb 14, 2019 03:12 PM #7
Ambassador
3,760,158
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Lottie just stopping by to wish you a very special Valentine's Day!!!

Feb 14, 2019 03:46 PM #8
Rainmaker
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Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Hi Nick Vandekar, 610-203-4543 - data can either complicate or help understanding. I think the stats I've read on why buyers buy in the Silicon Valley helps me help others.

Feb 14, 2019 06:36 PM #9
Rainmaker
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Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Hi Grant Schneider and Myrl Jeffcoat - data and statistics are interesting, and can help one understand target marketing.

George Souto - thanks for the Valentine's Day wishes; I hope the day has been a good one for you, too.

Feb 14, 2019 06:39 PM #10
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Lottie Kendall

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