San Jose—the so-called Capital of Silicon Valley—and its surrounding metro area is home to all but one of of Redfin’s Hottest Neighborhoods in 2018. While that's good news for people who already own property in those communities, it's also a sign of the region's worsening affordability crisis. Below are some of the highlights from the ranking.
All but one of the 10 hottest neighborhoods in the nation this year lie in the South Bay, according to a new report by real estate website Redfin. The study’s authors say that’s because tech workers are getting priced out of San Francisco and the Peninsula and have set their sights in the San Jose metro area because of its proximity to Apple, Google—which is eyeing downtown San Jose for future expansion—and other Silicon Valley giants.
The median sale price of a home in Palo Alto last year topped $2.5 million, making San Jose’s median of $1 million look like a relative steal. But increased demand continues to put pressure on San Jose’s housing market, which, according to Redfin, has the shortest supply, higher price growth and a faster pace of sales than any other market.
In San Jose’s Bucknall neighborhood, where the median listing approached $1.6 million in 2017, every single home sold for above the asking price. On average, people paid nearly 24 percent above list price in this affluent West San Jose neighborhood.
The rate South Bay home prices rose from the end of 2016 to the same time last year.
“While the San Francisco peninsula has traditionally been the hottest of the hot places, we’re seeing it become unaffordable for even the tech giants that helped create its demand in the first place,” Redfin Silicon Valley agent Kalena Masching noted in a prepared statement on the company website. “The result has been a tech-worker migration to the South Bay charged by people looking for relative affordability, highly rated schools, short commutes and access to jobs.”