As the gloomy reports continue for the housing industry, there is one market where both high-end employment and housing are on an uptick. Thanks in no small part to a techno-renaissance, the Silicon Valley is presently enjoying one of the strongest housing markets in the nation.
To check out a recent article from the NAR about Silicon Valley housing, CLICK HERE.
With growing companies such as Facebook and LinkedIn employing more and more people, there is a growing demand for luxury homes in the nearby areas, with values climbing as a result. In Palo Alto, for example, the median price of single-family homes increased 20% over a year ago to $1.63M. While in Mountain View, the median price climbed 3.1% from April to May up to $957,500. Also interesting to note is that San Jose has one of the shortest average marketing times in the nation, in spite of having one of the highest median values of any major metropolitan area.
A couple of things are interesting about all of this. First off, this market performance relies almost entirely on the local employment market. The Silicon Valley is just as subject to distressed properties and shadow inventory as any other area, yet at present these factors are trumped by area buyers with money burning a hole in their pocket. So given that this market behavior is in stark contrast to a variety of unhealthy market conditions, can it last?
False recovery or sustained recovery? It all depends on who you ask. Some claim that local tech companies, having learned from the errors of their predecessors are on much more stable footing than the last time around. If that is indeed the case, and the Silicon Valley job market continues to churn out buyers, then the local market may find itself well ahead of the curve in terms of market turnaround. It has long been said that jobs are the key to housing, and Silicon Valley appears to be living proof.