The unemployment rate in California dropped 1% to 6.2% in May 2015. In fact, some pockets including San Francisco, the unemployment dropped to 3.5%. Santa Clara and San Mateo County dropped to 4.0% and 3.3% respectively. The impact of such drop in unemployment on Silicon Valley housing prices is that there are more buyers for each home on the market.
The shortage of inventory of available homes in Silicon Valley has continued well into the summer where homes in desirable neighborhoods with good school districts sell within one weekend with multiple offers. Listing prices of these homes are 15-16% higher than the list price of similar homes on the same zip codes.
CoreLogic reported that for May 2015 the medina home prices of homes in San Francisco Bay Area was $650,000. Compared to 2015, this is up 5%. The Bay Area median sale price has risen year-over-year for 38 consecutive months, with the median sales price climbing toward its peak price of $665,000 in June 2007.
According to CoreLogic, a total of 8,030 new and resale houses and condos were sold in the Bay Area counties in May 2015 which climbed 3.1% compared to May 2014. During May 2015 home sales were the highest for the month of May since 2013.
But the numbers don’t tell the whole story about the housing crisis in Silicon Valley. The real story is on the highly skilled labor force where couples who are both employed are unable to buy a home in the Silicon Valley. Minimum home prices in Los Gatos is more than $1.3M in 95032 zip code.
In fact, we know a husband and wife who work for Intel. They moved to Silicon Valley more than 5 years ago and they have been unable to purchase a home. They have now concluded that they are better off moving back to San Diego since $1M can not even buy a fixer upper in Los Gatos.