The Tale of Silicon Valley Real Estate Amid Coronavirus Outbreak
What is really going on in the market? Are people risking their lives in pursuit of the American dream? Many homebuyers view this market as a great opportunity to get in at discount prices thanks to historic low interest rates on home loans and reduced competition with “shelter in place” order by health officials of Santa Clara county starting on March 16th, 2020. Since then, 786 homes closed escrow or went into contract and only 335 new homes were listed, leaving just 1067 homes in all of Santa Clara county with a median list price of $1,300,000.
We have experienced a shortage of homes for sale since 2010. It’s no surprise that around the same timeframe tech unicorns like Airbnb (2008), Uber (2009), Quora (2009), Instagram (2010) just to name a few made their debut out of Silicon Valley. From there, the growth has been exponential. Stock values of Apple, Netflix, Google and Facebook increased by 1200%, 5019%, 504% and 1285% accordingly. If you invested $10,000 evenly among these four companies in 2010, your investment would be worth over $200,000 today.
Prior to the pandemic making visible lifestyle changes for all of us in March 2020, the real estate market in Silicon Valley was soaring for all the reasons mentioned above. Multiple offers and bids exceeding asking price by hundreds of thousands of dollars were making their appearance like flower buds coming out in spring - ready to soak in the sun and BLOOM!
Then coronavirus quickly spread around the world, likely changing how we see the world forever. It is possible that people are also changing their view and ultimately value of real estate. The unprecedented shift to doing everything online from the comfort of your home, like shopping for groceries to celebrating weddings via Zoom (San Jose, CA based company), is making it very clear that we will rely on technology more than ever moving forward. More demand for tech, means more demand for tech employees to support this amazing infrastructure. In the last few weeks while people shelter in place, thousands of new job openings were posted by local tech giants.
Whether you’re looking to buy or sell a home in Silicon Valley, make sure you consider the trends above and keep a long term outlook. At this moment in time, local market shows tremendous amount of promise as a long term asset and as a shelter in an ever growing world supported by technology.
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