Silicon Valley's housing market is still hot, but buyers and sellers need to be aware that the market is rebalancing, fragmented and segmented. All depends on price point, location and area and these days, if people still want to live in or close to Silicon Valley, opportunity lies in lower level markets and in the outlying areas, according to a noted Bay Area real estate consultant.
Carole Rodoni, owner of Bamboo Consulting, Inc. and former president of Alain Pinel Realtors, was back speaking to members of the Silicon Valley Association of REALTORS® this month, giving her take on the current state of the housing market. A lot has changed since the beginning of the year, she said, with home prices continuing their upward trend and tech companies in the Bay Area expanding. Rodoni said the entry level markets are the hottest pockets right now, especially in the East Bay and outlying areas as far as Tracy and Manteca, because prices there are still affordable. She projects the entry market will experience a 6-8 percent appreciation this year. She sees middle tier properties remaining steady, and this time around, she said it is the high-end market that will take longer to sell.
REALTORS® need to re-educate their sellers, said Rodoni. Underpricing a home or overpricing a home is the most dangerous thing a seller can do right now. "Stop with the teasers because buyers are beginning to understand the game and becoming resentful. They are shopping, testing, looking, watching, but they are not immediately buying, especially the millennials," said Rodoni.
Rodoni said the millennials are a different breed of buyer. Born to helicopter parents, she said this generation has been told they are smart and many of them still live at home.
"They are tech savvy, they like things colorful. They have no loyalty and they don't read. A 30-second video, sound bites and bullet points are more their style,' said Rodoni.
She said in looking for a home, millennials want trendy, location, zip code. They will either buy a tear-down and re-build to their specifications or purchase a state-of-the-art home. "They care what their friends think and won't touch a house that has been sitting long in the market. Price is key and the first number is the most important number. They won't play the 'gotcha' game," said Rodoni.
The Bay Area real estate expert acknowledged the Bay Area has its problems. She warned rent control is looming and the industry is going to have to deal with it as best it can. Then there is the traffic, but that's comes with being in a place that is the most desirable place to live in. She listed the region's assets like good weather, excellent educational institutions, cultural diversity, strong job growth and much more. The valley is the center of technology with start-ups and global tech companies, like Facebook, Google and Apple. She said projections are by 2040, the region's population will rise to 2.1 million and there will be 1.1 million more jobs.
"We are lucky to live here," she exclaimed.
Rodoni doesn't mince words with those who complain about the low housing affordability in the region. "You can't always afford where you want to live; it's not a right," she said.
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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