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Silicon Valley property values are soaring

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The value of San Jose’s taxable properties soared last year thanks to demand for luxury homes and new construction. Experts and county officials say growth will not last long.

In the heart of the wealthy Silicon Valley, the valuation of all real estate has surged $ 15 billion over the past 12 months, from $ 215.9 billion to $ 231 billion. According to county data, in Santa Clara County, its value reached a record $ 619.9 billion. This is an increase of $ 43 billion year-on-year, indicating that the economic impact of the COVID-19 pandemic is limited.

Home ownership changes and new commercial construction Continue to be the greatest driver of growth In the area, Santa Clara County Councilor Larry Stone told San Jose Spotlight. New construction Within the county, it contributed $ 5.9 billion to a total increase last year. Home ownership changes contributed $ 24.5 billion (almost half of the overall increase) in the region. In San Jose, home valuations accounted for an overall increase of $ 9.9 billion and commercial real estate accounted for $ 5.1 billion.

The county’s rating roll, which includes about 500,000 properties ranging from boats and planes to commercial buildings, is revalued annually.

“In Silicon Valley, the luxury housing market is particularly igniting,” Stone said. “On the commercial side, space was built and leased primarily by new construction and major (technical) companies.”

The assessment roll reflects the 2021 housing market and high demand from high-tech workers. Real estate broker Trung Lam told San José Spotlight.Many buyers want a large residential area that can be created later Build a backyard house..

“A few months ago, the market was very hot and homes sold like pancakes,” said Lam, owner of the TE Real Estate Group in San Jose, where the offer was $ 100,000 to $ 30 above the asking price. I often see it being $ 10,000 higher.

Increase value

Last year, the value of taxable assets increased in all 15 cities in the county. Sunnyvale, Mountain View, and Santa Clara (new technology offices are emerging) have all increased their asset valuations by at least $ 3.4 million.

According to State Law Proposal 13 of 1978, the assessed increase in real estate value in California is limited to 2% each year. However, when real estate is sold, it is revalued and taxed based on its latest market value.With many residents Sell ​​their home during a pandemicSanta Clara County was able to collect a much higher tax rate on housing.

As Silicon Valley is flooded with an unprecedented number of new developments, there will also be valued asset value growth. GoogleDowntownWest project San Jose, Mountain View’s new Google campus, Nvidia campus In Santa Clara.

The county is preparing for a recession similar to the Great Depression of 2008 and the collapse of dot-com companies in 2000, but tech companies such as LinkedIn, Apple, Google, Nvidia and Adobe Continue to prosper.. Product price —Including gas— Significantly increased as Supply chain issues Continue to track COVID-19 for over 2 years.

The technology industry invested $ 3.5 billion in the acquisition of office and commercial buildings last year, according to the report. Business assets such as machinery, equipment, computers and equipment also increased in value by 6.6% to $ 42.9 billion.

Growth of the rating roll in Santa Clara County in 2021.

According to Stone, tech companies have helped the region avoid the effects of a pandemic by expanding its offices and attracting more workers. He also Availability of COVID vaccine And a $ 3 trillion federal economic stimulus.

However, not all companies have overcome the effects of a pandemic. The surge in COVID infections last year has damaged retail stores, restaurants and entertainment venues. According to Stone, the assessor’s office has reduced the assessed value of 2,595 properties, reflecting the decline in market value. 18% of them were commercial properties.

Growth is expected to level off

With rising interest rates and lower stock income, Mr Lam said his business lost 80% of homebuyers, most of them technical workers. Many are waiting for their stock income to come back, as others want to get a home at a lower price.

“Now it’s a buyer’s market,” Ram said.

Median home prices in Silicon Valley are above $ 1.7 million, up more than 17% from last year, the evaluator’s report said. According to a recent report from Zillow, mortgage payments in San Jose exceed $ 9,000 per month, Realtors say it’s reasonable..

“This trend can be seen in residential properties of all levels, from single-family homes and apartments to town homes and condos,” Lisa Faria, president of the Santa Clara County Real Estate Association, told San Jose Spotlight that condo and town home prices are Currently, it’s over $ 1 million in San Jose.

With inflation Soaring gas prices Stone expects asset values ​​to rise more slowly next year in Santa Clara County due to heightened uncertainty in other economies.

“Silicon Valley and technology have a special kind of resilience from big fluctuations in economic activity, but we can’t escape it,” Stone said. “I don’t anticipate a disaster in 2023, but I think it will be a much more stable and general economy.”

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