Real Estate Articles
Canadian homebuilders group tours homes in Santa Clara County
Twenty-five members of the Canadian Homebuilders Association - Alberta were on a two-day housing tour of homes in Santa Clara County March 12 and 13 and learned about the Silicon Valley housing market and challenges to urban development from local speakers.
At a breakfast presentation arranged by the Silicon Valley Association of REALTORS®, Dave Walsh, vice chair of MLSListings Inc., shared local housing data with the builders. Walsh described Santa Clara County, which is at the heart of Silicon Valley, as "the single, most crazy market."
Walsh said the region, once filled with orchards, has become the leading hub of high-tech innovation and development in country. Recent growth has led to record-setting home prices. Home prices today have now exceeded the 2007 high, but there are far fewer homes on the market. Santa Clara County's February median home price of $950,000 is "the best February ever," said Walsh. The median is 20 percent above the median peak of $790,000 in February 2007. The problem is the county just had 1.4 months of inventory, with only 1,761 single-family homes for sale in February.
Walsh showed how home prices increase the closer one gets to Palo Alto, the central economic focal point of Silicon Valley, home to Stanford University and other prominent tech firms, and close to Facebook in neighboring Menlo Park and Google in Mountain View. Homes in Palo Alto are selling 110 percent of asking price, at an average of $1,491 per square foot. In Gilroy, which is about 50 miles from Palo Alto, homes are selling 99 percent of asking price at an average price of $284 per square feet. In Saratoga, which is about 18 miles from Palo Alto and has an excellent school district, homes are selling 102 percent of list price at an average of $812 per square foot.
The lack of housing supply to support the job growth has definitely become a critical issue in the region, contributing to dramatic price increases, explained Walsh. The city of San Jose's Master Plan calls for high density and no expansion beyond the existing housing footprint.
"We will continue to see constricted supply for the near future," Walsh projected.
Jim Rivait, CEO of the Canadian Homebuilders Alberta group, said the tour of homes and information from Walsh gave the builders insight which they can take back with them. Comparing the Alberta and Santa Clara County housing markets, Rivait said, "There is some nervousness where we are due to lower oil prices, but our housing markets in Edmonton and Calgary are doing well. Yours, however, is truly a unique market."
Rivait said homes in the Alberta area have smaller lots, about 32-34 square feet in size, with the average home costing between $450,000 and $500,000. Multifamily housing starts there have doubled in the last five years.
During their stay the group visited housing developments in San Jose, Morgan Hill and Milpitas. Rivait said this was the group's fourth housing tour in the U.S. They previously have toured homes in Austin, Texas, Orange County and Phoenix.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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