Just because west & central side of the Santa Clara County have surpassed historically high, there are still many neighborhoods have not still max out yet.
There are plenty of investors who are happy with 3-4% cap rate. Many seem to have forgotten that rentals in the past always ran negative cash flow. There was never a shortage for an investment home since tax write off was useful to offset hefty income from many.
Overall, the Silicon Valley market has been pounding upward for the past 18 months and finally appears to be slowing to catch it's breath. How will this translate into the coming months? No one knows. You might want to consider reading the following post:
Housing Market Cooling Off: Top 5 Reasons
Because the Silicon Valley is really at the heart of Bay Area values, it is a much safer place to buy so long as the fundamentals are correct.
What you don't specify in your question is whether or not the "buyer" you are referring to is a normal home buyer or an investor: the answer to this question differs greatly based on who is buying the home. If the purchaser is a normal buyer looking to purchase a Silicon Valley home close to good schools and their work AND they plan on living there a ling time, then there is no wrong time to buy. The goal is a roof over their head, not an investment per se. Over time, they will more than likely see increases in the value of their home.
If, however, the buyer is an investor, the answer is different. I personally don't buy investment properties based on speculative return: I buy based on whether of not the property cash flows out of the gate. As prices increase in Silicon Valley, it's becoming very difficult to find properties with a good CAP rate.
Since you are a Realtor, I'd be interested in your take on this.
I agree with Charles and other two agents, Bay area housing market still has high demand and pricing has room to growth comparing when a pick time . In addition to that the interest rates are still low , around 4.375% for 30 yrs fixed .
I had been helping buyers to purchase homes in Silicon Valley -area almost 20 yrs with experience enthusiasm, trusted Realtor . Living and Knowing San Jose very well .
Whenever you feel comfortable and ready to purchase or have any questions
Please feel free to give me call
Lisa Hoa Tran, Broker
ByLand Realty & Mortgage
1772 clear Lake Ave, Ste# 200
Milpitas, CA 95035
Zip code 95148 is one of the areas that hasn't reached its 2007 home value peak
There is room for growth. The amount of growth depends upon whether the local job market is more attractive than other areas and upon government policy decisions. I changed how I present home values from value versus quarter to include value versus month so that changes could be seen sooner.
Top 2 agent nationwide at Keller Williams Realty, the nations largest
Over 20 years experience
Over 1,000 homes sold in Santa Clara County and San Mateo County
I agree with Mr. Juarez:
The Silicon Valley is essentially "built out". There is no place left to build. The economy of the Silicon Valley is strong and the economy of the Silicon Valley is continuing to grow. With no place left to build, that means that real estate prices will continue to be bid up.
Essentially the Silicon Valley is becoming the place where top management lives. The lower level, lower pay jobs are outsourced to other locations. That trend will continue for years.
The result is that residential real estate, especially single family homes, with a decent size lot will become a luxury for only the very rich and highest paid executives. Real Estate prices will be bid up to levels even higher than they are now.
The greatest amount of demand is for the locations with the highest rated schools. Therefore, the locations with the highest rated schools will be bid up to the highest levels.
Short term, real estate prices will bounce around in an unpredictable manner. Anyone who tells you that they can predict the short term moves in the real estate market over the next 3 to 6 months to a year, does not know what they are talking about. Short term moves in the real estate market are very dependent upon political decisions which are often unpredictable, arbitrary, short term and emotion laden.. Long term, because powerful economic forces, prices will bid up much higher than they are today.
I recommend that you buy your own home as soon as you are able to do so.
Charles Butterfield MBA
Real Estate Broker/REALTOR
Broker/Owner: The Butterfield Real Estate Firm
Cell Phone: (408)509-6218
Email Address: firstname.lastname@example.org
Short term forecasts are notoriously unreliable. You will find conflicting opinions.
Silicon Valley continues to be a sellerâ€™s market now but markets change over time.