Tech workers come in droves to Silicon Valley, but few can afford to buy homes there.
Recent data shows that prospective homebuyers are migrating south in search of affordability.
The real-estate company Redfin produces an annual list of the hottest housing markets in America, based on increases in internet traffic to listings in a neighbourhood. In 2018, nine of the 10 hottest ‘hoods are in the San Jose metro area, in the heart of Silicon Valley.
According to Redfin, San Jose’s ultracompetitive housing market had the lowest housing supply and the fastest pace of home sales compared with any other Redfin market in December. The median sale price climbed 32% year over year, reaching $US1.1 million that month.
San Jose most likely won’t be “affordable” for long.
Check out the 10 hottest neighbourhoods in the US:
10. Rex Manor, San Jose, California
Median sale price: $US1.5 million Average sale-to-list-price ratio: 114.4%Per cent of homes that sold above list price:83.9%
“Rex Manor has been gaining traction as a desirable neighbourhood, where you’ll see many residents riding their bikes to Google, Shoreline Park, and the Shoreline Amphitheatre, where people can enjoy all sorts of live music and events,” said Kalena Masching, a Redfin agent in San Jose.
“The area still has some relatively affordable homes,” Masching said, “and we’re seeing a lot of attention from the investment community where people come in and buy up the older homes under 1,400 square feet and turn them into modern, technology-filled homes that sell like hotcakes.”
9. Blacow, Fremont (San Jose metro area), California
Median sale price: $US1 million Average sale-to-list-price ratio: 109.4%Per cent of homes that sold above list price:91.7%
“Blacow is a neighbourhood in Fremont that is known for its relative affordability and schools in the areas that rankings have been increasing,” said Kat Said, a Redfin agent in Fremont.
“People also really enjoy the new-construction homes in the area and all the nearby places to shop,” Said added. “One hot spot is NewPark Mall, which has some of the best restaurants in town and is a short car ride away from most homes in Blacow.”
8. Sunnyside, San Francisco, California
Median sale price: $US1.3 million Average sale-to-list-price ratio: 125%Per cent of homes that sold above list price:89.5%
“Sunnyside is a popular spot because it’s a bit more affordable than Glen Park, but still has easy access to 280 and Bay Area Rapid Transit,” said Miriam Westberg, a Redfin agent in San Francisco. “In recent months, homes Redfin listed in the neighbourhood went under contract in as little as two days because there were so many well-qualified buyers ready to pounce on this desirable location.”
7. Lakewood, Sunnyvale (San Jose metro area), California
Median sale price: $US1.2 million Average sale-to-list-price ratio: 121.3%Per cent of homes that sold above list price:92.3%
“Lakewood is a good commuter neighbourhood and one of the few remaining places in the San Jose metro area where people can get a home for less than $US1 million without getting deep into San Jose or going to the East Bay,” said Jason Burkhart, a Redfin agent in Silicon Valley.
“It’s close to Mission College and a fairly new shopping plaza with a beautiful movie theatre, small grocery store, and plenty of restaurants and pubs to keep up with demand,” Burkhart said. “The neighbourhood is also close to the new 49ers stadium and California’s Great America, which some people love but others see as a nuisance because of the added traffic and noise.”
6. Sunnyvale West, Sunnyvale (San Jose metro area), California
Median sale price: $US2 million Average sale-to-list-price ratio: 118.3%Per cent of homes that sold above list price:91.3%
“Sunnyvale West has historic, century-old homes intertwined with new construction, giving the neighbourhood a real old-meets-new feel that you can’t really find anywhere else in San Jose,” said Chad Eng, a Redfin agent in Silicon Valley.
“People like the neighbourhood because of its proximity to the Caltrain station and downtown Sunnyvale, which has really been revitalized in recent years,” Eng added. “There are lots of community events in the summer, like concerts and movies in the streets, farmers’ markets, and jazz bands that play along the footpath.”
5. West Santa Clara, Santa Clara (San Jose metro area), California
Median sale price: $US1.2 million Average sale-to-list-price ratio: 116.1%Per cent of homes that sold above list price:90.3%
“West Santa Clara has a lot of perks, and oftentimes the people that seek it out travel a lot and appreciate the proximity to the San Jose Airport,” said Martin Garcia, a Redfin agent in Silicon Valley.
“It’s also really close to Koreatown, which has karaoke, incredible restaurants that infuse American and Korean flavours into fun dishes, and grocery stores that sell unique Korean ingredients,” Garcia said.
4. Ortega, Sunnyvale (San Jose metro area), California
Median sale price: $US1.9 million Average sale-to-list-price ratio: 116.5%Per cent of homes that sold above list price:100%
“Homebuyers like Ortega because of its proximity to the Cupertino and Santa Clara Apple campus, its highly rated schools, and its access to highways 101 and 280,” Garcia said.
“People also enjoy the abundance of grocery stores and unique, local restaurants,” Garcia added. “Ortega Park or the Community Center are popular places for residents to stretch their legs and get some exercise.”
3. White Oak, San Jose, California
Median sale price: $US1 million Average sale-to-list-price ratio: 105.7%Per cent of homes that sold above list price:66.7%
“White Oak is a neighbourhood that many first-time homebuyers choose because it has a lower price point and is close to vibrant downtown Campbell and downtown Los Gatos,” said Kimberly Douglas, a Redfin agent in San Jose. “There are several highly rated schools in White Oak, and the Los Gatos Creek Trail is a popular spot for after-work hikes or a leisurely weekend stroll.”
2. Cambrian, San Jose, California
Median sale price: $US1.2 million Average sale-to-list-price ratio: 118%Per cent of homes that sold above list price:100%
“Homebuyers flock to Cambrian because of its easy access to public transit and the freeways, its proximity to downtown Campbell and the iconic Willow Glen and its highly rated schools,” Douglas said.
“Compared to other neighbourhoods in San Jose, you get more home for your money,” Douglas added. “Locals enjoy evening farmers markets in the spring and fall, many public parks and greenspaces, and the nearby Camden community center, which offers lots of recreational activities for kids and adults.”
1. Bucknall, San Jose, California
Median sale price: $US1.6 million Average sale-to-list price ratio: 123.8%Per cent of homes that sold above list price:100%
“Bucknall is hotter than ever; buyers should be prepared to act fast as the typical home goes off the market in just eight days,” Masching said.
“Bucknall has a ton of single-family homes, which sets it apart from many neighbourhoods in the area that have more mixed-use or multi-family homes,” Masching said. “Bucknall borders the Saratoga Westgate shopping plaza and has easy access to five grocery stores, multiple gyms and yoga studios, shopping, highly rated schools, and a movie theatre to help keep people entertained.”
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.