Average home sales prices have skyrocketed in Silicon Valley’s hottest housing markets, and residents are moving out.
A new study from Joint Venture Silicon Valley found that the region’s average home sales price peaked at $1.53 million in 2022, led by three of the most competitive markets – Fremont, Santa Clara and Sunnyvale.
Heidi Young, senior researcher at https://www.paloaltoonline.com/news/edit_story.php?id=62875#Silicon Valley Institute for Regional Studies, part of the Silicon Valley Joint Venture, said the high demand for these “ hot” housing markets in Fremont, Santa Clara and Sunnyvale have not protected those cities from more people moving out than moving in. This is a trend across the region.
“It’s nothing unique, if anything at all, that just speaks to what’s going on across the region… even hot housing markets are not exempt from this,” Young told San Jose Spotlight. “This is the reality in the region.”
Santa Clara saw the largest increase in average home sales price at $1.41 million, a 17% increase over 2021. Millennials continue to be the dominant home buyers in Santa Clara, with homes receiving an average of nine offers and selling at almost 10% above the starting price – according to the study.
The study also used data from Greatschools.org, which rates schools on test scores, academic progress and equal opportunity, to help potential buyers decide where to live. This data shows that 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 nine out of 10 rating.
“School ratings are obviously a big attraction for homebuying families,” 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 Jose 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 itself, suggesting the area continues to attract local residents, he added.
“A significant increase in property values could mean an influx of higher-income residents, which could lead to improvements in local schools and, over time, reduce the poverty rate,” Chea told San Jose Spotlight. “The fact that more than half of (Santa Clara’s) population is foreign-born indicates a diverse and multicultural community, which potentially contributes to its unique character and attractiveness.”
While property values have increased throughout the county, data from the Santa Clara County Assessor’s Office showed a significant number of properties have dropped in value from 2,595 last year to 19,325 this year. Other than a brief increase 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 Jose Spotlight.
Fremont, located in neighboring Alameda County, is one of the most competitive housing markets locally and statewide. Area code 94536, 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 an average price per square foot of $811.
Sunnyvale rounds out the list of hot housing markets as the most expensive, with a median home sales price of $2.4 million, though that’s still down 6% from 2021.
“It is clear that the (Sunnyvale) area attracts families because of its high-quality educational offerings and economic stability,” Chea said.
This story was originally published by San Jose Spotlight.
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