The cost of homes in Silicon Valley has been steadily rising. Housing prices have risen by 4% in 2017 and the housing inventory has dropped by 17%. This is a broad view of a large area (Los Gatos up to the Palo Alto area), but the numbers show that the limited supply is prompting buyers to pay more for their new home.

Affordability still remains an important issue for many residents, particularly for Bay Area natives. In San Jose, a 1-bedroom rental is well over $2000/month ($2500 in San Francisco), and many Bay Area residents spend over 40% of their income on housing annually.

However this is a very good time for home sellers. The average home in Mountain View sells for 6% over asking price, and about 63% of all San Jose homes sold above list price in 2017.  With the low inventory, rising home prices, and an average days on market of less than 3 weeks, there is no better time for home sellers.

On a broader macro view, the combined growing demand for new employee housing, development for expanded office spaces, and low interest rates at 4% show that Silicon Valley isn’t about to slow down. Indeed, with unemployment in the Bay Area at an all-time low of 3%, we predict that as long as tech companies are continuing to thrive, residential real estate prices will continue to stand to rise.