Median home sale prices have skyrocketed in Silicon Valley's hottest housing markets, and residents are moving out.
A new study by Joint Venture Silicon Valley found the region's median home sale price reached a peak of $1.53 million in 2022, bolstered by three top competitive markets -- Fremont, Santa Clara and Sunnyvale.
Heidi Young, senior researcher at Silicon Valley Institute for Regional Studies, part of Joint Venture Silicon Valley, said the high demand of these "hot" housing markets in Fremont, Santa Clara and Sunnyvale hasn't saved these cities from more people moving out than moving in. It's a trend across the region.
"That's not anything unique, if anything that is just telling of what's happening across the region ... even hot housing markets are not exempt from that," Young told San Jose Spotlight. "That's the reality of the region."
Santa Clara saw the largest growth in median home sale price at $1.41 million, a 17% jump from 2021. Millennials are still the predominant homebuyers in Santa Clara, with houses averaging nine offers and sold at nearly 10% above asking price, according to the study.
The study also uses data from greatschools.org, which grades schools on test scores, academic progress and equity, to help prospective buyers decide where to live. Based on its data, Santa Clara's elementary schools, for example, scored just a five out of 10. In the other two hot markets, Fremont elementary schools scored from three to seven out of 10, and Sunnyvale schools scored the highest with a grade of nine out of 10.
"School ratings (are) obviously a big attraction for families when they're purchasing a home," Young said.
Will Chea, president of the Santa Clara County Association of Realtors --a trade association representing more than 6,000 real estate professionals in Santa Clara County -- told San Jose Spotlight that Santa Clara school rankings are just one aspect of the city's wider appeal. Over half of the new homebuyers in Santa Clara came from within the county, which suggests the area continues to attract local residents, he said.
"The substantial increase in property values could signify an influx of higher income residents, which could lead to improvements in the local schools and decrease the poverty rate over time," Chea told San Jose Spotlight. "The fact that more than half of the population in (Santa Clara) is foreign-born indicates a diverse and multicultural community, potentially contributing to its unique character and appeal."
Though property values in the county are up as a whole, data from the Santa Clara County assessor's office reported a significant number of properties declining in value from 2,595 last year to 19,325 this year. Aside from a brief uptick in 2020 during the first year of the COVID-19 pandemic, this is the first time the county has seen such a large decline since the financial crisis of 2008, County Assessor Larry Stone told San Jose Spotlight.
In neighboring Alameda County, Fremont is among the most competitive housing markets locally and in the state. The 94536 area code--which includes the towns of Glenmoor, Centerville, Parkmond, Cherry-Guardino, Canyon Heights, Vallejo Mills, Niles and Cabrillo--are where the dollar goes the farthest, with a median price per square foot of $811.
Sunnyvale rounds out the study's list of 'hot housing' markets as the most expensive, with a median house sale price of $2.4 million -- though that's still down 6% from 2021.
"It's apparent that the (Sunnyvale) area attracts families due to its high-quality educational offerings and economic stability," Chea said.
This story was originally published by San Jose Spotlight.