According to the latest Santa Clara County real estate data, slowing down the booming economic engine of Silicon Valley’s real estate market will require more than a pandemic.
The valuation of all assets in the county reached a record $ 619.9 billion. This is an increase of about 7.5% over the previous year. This was also a big boost to the expensive Silicon Valley, and despite the COVID-19 pandemic, experts were worried that it would undermine the region’s prosperity.
“Last year, we were pessimistic about the prolonged recession,” Larry Stone, a councilor in Santa Clara County, said in a news release. “Silicon Valley’s resilience combined with a very strong housing market has strengthened the local economy and accelerated the growth of valuation rolls to record levels.”
Santa Clara County gained $ 43 billion in asset value last year, according to the 2022-2023 valuation roll that determines property taxes on commercial and residential real estate in Santa Clara County as of January 1, 2022. Did.
Stone believes that the combination of the availability of the COVID vaccine and the $ 3 trillion federal economic stimulus has prevented a major economic collapse. And the Silicon Valley real estate market has been red for years. According to CoreLogic, average home prices in Santa Clara County in May were $ 1.5 million, up 18% from a year ago. Median prices were $ 1.2 million in Alameda County, $ 1.8 million in San Mateo County, $ 1.7 million in San Francisco, and $ 925,000 in Contra Costa County.
Real estate ownership changes and new construction are the two biggest drivers of real estate growth last year, accounting for $ 24.5 billion and $ 5.9 billion, respectively. Due to Proposal 13 (a controversial 1978 state law that artificially reduces the value of real estate), real estate valuations and unpaid property taxes are either changed or built. Unless you know it, it will only increase by less than 2% per year.
According to Stone’s office, following the pandemic downturn, new construction has picked up again. For example, Santa Clara’s new Nvidia campus has added $ 310 million to the county’s asset roll. In addition, projects are imminent, including San Jose’s massive Google Downtown West project.
The technology industry, which is the backbone of Silicon Valley’s economy, continued to invest in the economy last year, completing the $ 3.5 billion acquisition of office and commercial buildings. Business assets, including machinery and computers, increased nearly 7% to $ 42.9 billion.
However, Silicon Valley was unable to get out of the pandemic unscathed, as many retailers, restaurants and entertainment venues suffered from the consequences of a long-term blockade. The appraisal office lowered the appraisal value of 2,595 properties due to the decline in the market value of the property. Of these assets, 18% were commercial and were most eligible for adjusted valuation due to the blows dealt with by the pandemic.
Experts also say that the real estate market may be chilling as inflation, high interest rates, soaring gas prices, stock market volatility and other economic uncertainties scare potential buyers. Is warned. Bay Area realtors report that homes are selling less and are selling at prices close to the asking price. This is in contrast to a few months ago, when many homes were sold well above demand.
“Mortgage rates have doubled and inflation has reduced consumer purchasing power,” Stone said in a news release. “It shows that growth could level off next year.” ..