Thanks to Polaris Pacific for providing us with its August 2018 New Home Market Update on Silicon Valley.

As you know, Silicon Valley is and has been one of the country’s hottest markets for single-family homes and condominiums. This update focuses specifically on Silicon Valley’s condominium market.

The median sale price of a new condominium in Silicon Valley in August 2018 was $983,045, an increase of +32.8%.

The number of condominium closings was down -16.4% and the MRI (months of remaining inventory) was 1.7, an increase of +6.3% compared with August 2017. This MRI data point is below the 6-month benchmark data point registered in 2011.

Days on the market, DOM, have tightened over the last 2 years in Silicon Valley. DOM was 11 on 7/31/18. (An enviable statistic…DOM has been below 60 days since 2012 to the present.

Square footage costs for low-rise (1-4 stories), mid-rise (5-12 stories) and high-rise condominiums in Silicon Valley (13+ stories) looked like this in August 2018:

  • low-rise – $886/sq.’ – +41.4% y/y
  • mid-rise – $1,001 sq.’ – +52.9% y/y
  • high-rise – $924/sq.’ – +20.0% y/y

Changes in annual price per square footage look like this in specific Silicon Valley towns:

– +30.3% -Santa Clara, Cupertino, Sunnyvale

– +28.8% – San Jose

-+21.5% – Menlo Park, Mountain View, Palo Alto

– +17.3% – Belmont, Burlingame, Redwood City, San Mateo

– +13.3% – Brisbane, Millbrae, S. San Francisco, Pacifica, Daly City

Buying is more expensive than renting in San Mateo, Redwood City and Menlo Park. The monthly cost to buy in these towns is $8,405; the monthly cost to rent is $3,471.

Changes in the number of sales y/y in specific Silicon Valley markets look like this, according to realtor.com:

  • -46% – San Jose
  • -23.2% – Cupertino, Santa Clara, Sunnyvale
  • +11.8% – Menlo Park, Mountain View, San Mateo
  • +33.3% – Brisbane, Daly City, South San Francisco, Pacifica, Millbrae

The number of cash buyers was 18.4% of total sales as of 7/31/18; in 7/31/17, the number of cash buyers was 20.9% of total sales.

The number of investor buyers of total sales as of 7/31/18 was 16.0%; in 7/31/17 the number of investor buyers of total sales was 17.0%.

Staggering as they are, prices and numbers increase and decrease even in Silicon Valley.