Silicon Valley Market Strategy
Is the ‘Return to Office’ mandate affecting home prices?
Possibly, yes. Homes within a 20-minute commute of Apple (Cupertino), Google (Mountain View), or Nvidia (Santa Clara) are seeing renewed bidding wars. We see a significant price premium for “commute-friendly” zip codes like 94087 vs. 94085.
Inventory seems low—is that true?
Yes, historically low. We have about 1.8 months of inventory (6 months is balanced). Most homeowners are “locked in” with low interest rates, so when a turnkey home hits the market in areas like Willow Glen, Cambrian or Sunnyvale expect 5+ offers.
How do I avoid the new San Jose Transfer Tax (Measure E)?
The tax threshold for homes over $2M jumped to $2.3M on July 1, 2025. If you are buying in that price range, you can expect the tax to apply…only staying under $2.3 avoids this tax.
Is it smarter to buy in less expensive areas farther out from San Jose?
Only if you work remotely. You get more land, but the commute on the 101 North is grueling again. Also, be aware that parts of these areas are now designated a “High Fire Severity Zone,” which complicates insurance and can add expenses.
How much over list price should I offer?
It depends on the zone and on the list price of the property. In Cupertino or Palo Alto, list prices are often teasers; expect to pay 10-15% over. In the condo market or South San Jose, homes are often selling at or slightly under the asking price.
Specific Local Risks
My insurance agent can’t write a policy for the Los Gatos Mountains. What now?
You may need the FAIR Plan. Many major carriers have paused writing in fire zones. We will likely need to wrap the state-run FAIR Plan with a secondary policy for liability. We must get quotes before removing contingencies.
Is declining school enrollment hurting property values?
It depends on the zone and on the list price of the property. In Cupertino or Palo Alto, list prices are often teasers; expect to pay 10-15% over. In the condo market or South San Jose, homes are often selling at or slightly under the asking price.
What is the Mountain View Measure G tax?
A luxury transfer tax. It applies a 1.5% transfer tax on properties sold for over $6 million. This rarely affects standard homebuyers but is a major factor for multi-family investors in Mountain View.
Investment & Logistics
Does an ADU add value in San Jose?
Yes. New 2025 laws allow you to rent out both the main house and the ADU (no owner-occupancy required). This makes properties with ADU potential highly desirable for offsetting high mortgage rates.
Are there pre-approved ADU plans available?
Yes. Santa Clara County offers a “Pre-Approved ADU Program.” using these ready-made plans can save you thousands in design fees and months of permitting delays.
Who pays closing costs in Santa Clara County?
It varies by city. In Palo Alto/Mountain View, it’s usually split 50/50. In San Jose, sellers typically pay, but aggressive buyers often offer to cover these taxes to win competitive multiple-offer situations.
Can I use RSU (Stock) income for a loan?
Yes, with a local lender. Big banks often reject volatile RSU income. We use local “tech-savvy” lenders who can average your RSU income over 2 years to significantly boost your purchasing power.
Financing & Appraisal Realities
Why do appraisals come in low during hot markets?
Appraisals rely on closed sales. In a fast moving market where values are escalating quickly, the appraisals cannot keep up to the current value as the appraisers are looking at history.
What happens if an appraisal is lower than the offer price?
It depends on how the offer is written. In our area, many buyers agree to cover the gap in cash. Otherwise, if there is a contingency, one can attempt to renegotiate the price, or cancel the contract.
Why do local lenders often outperform national banks here?
They understand local pricing norms and can possibly close faster in competitive situations.
Is cash always king in the South Bay?
Cash is attractive, but strong conventional financing with clean terms can compete effectively.
Why do jumbo loans work differently here?
High property values mean many buyers use jumbo products with stricter underwriting timelines.
Title, Escrow & Legal Quirks
What is a Preliminary Title Report and why is it critical?
It reveals liens, easements, and ownership issues that could affect future resale or use. It is important to review this report as soon as the Prelim is available.
Why are easements common in South Bay properties?
Very often they are used for utility access, but can also be shared driveways, and condos and townhomes have them to accommodate the use of common area.
What is a seller rent-back?
Sellers can negotiate to stay after closing (often 30–60 days) to transition to their new home smoothly. This can be at a cost or the buyer can waive the cost as part of negotiating.
Can escrow timelines be shortened here?
Yes—some lenders can accommodate 14-day or less closings in competitive scenarios.
Why is title insurance especially important in older neighborhoods?
Historic ownership transfers and unrecorded changes can create hidden risks.
Selling Strategy & Preparation
Why do sellers sometimes list below market value?
Strategic underpricing can trigger multiple offers and drive the final price higher.
Does staging really matter in Silicon Valley?
Yes. Buyers pay premiums for homes that feel move-in ready. They also have an emotional appeal and can help in visualizing furniture placement.
Why do some listings avoid offer review dates?
It can create urgency and attract early, strong offers or if the seller or sellers’ agent feels that demand is not strong for this particular home.
Is it worth selling during the holidays in the South Bay?
As the inventory reduces, the serious buyers are still out looking which can produce a sale. We often do avoid listing too close to the end of the year unless the sellers have pressure to move quickly.
Why do sellers hesitate to accept FHA or VA offers?
These loans might have stricter appraisal and condition requirements, so it is important to understand the differences and speak with the buyer’s lender before acceptance to be prepared for the process.
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