You’ll need a healthy bank account and strong constitution before wading into the Silicon Valley housing market. The explosion of people moving here for those high-flying technology jobs has created a classic supply and demand problem: there’s not enough housing for everyone so prices have consistently been going up…and up…and up. It’s now among the most expensive places in the United States and there have been high profile stories of people leaving because they can’t afford it.
But if you are moving here, then you’ll need to understand what are the driving factors in this expensive real estate market.
Yup! It’s that simple. People looking to rent or buy in Silicon Valley are interested in good schools, an easy commute and hopefully a good reputation.
Keep reading our guide to understand the market and how to find a place, whether you’re renting or buying.
RENTING IN SILICON VALLEY
In many Valley cities, like Mountain View, the majority of residents are renters so you’ll find a wide range of housing options available, from modest studio apartments to luxury homes. As with all housing here, rentals are expensive for what you get.
Median Silicon Valley rental costs:
Studio/1 bedroom = $2,300 per month
2 bedroom = $2,900 per month
3 bedroom = $3,950 per month
4 bedroom = $5,200 per month
Many landlords expect you to prove an income triple that of the annual rent. So if you’re looking for a 2 bedroom that is going to cost $36,000 per year you’ll need to prove income of at least $108,000. (Note that affordable housing for lower income families is quite difficult to get – there are generally long lists of applicants with estimated waiting periods of a year or more.)
Finding a rental
Real estate agents here generally don’t get involved in helping tenants find rental properties so you’ll work directly with a landlord or property manager when you find something you like. The biggest property managers around are Prometheus, Essex, and Irvine Company and they operate large apartment communities, many with their own fitness centers and pools. You can search directly on their websites or use any of the more popular consolidated property websites below to include these and smaller buildings and single-family homes in your search..
You’ll also find furnished apartments here. These will generally be more flexible on timing if you don’t want to be locked into a year long lease or aren’t sure if you’ll stay in the area, but they’ll also be significantly more expensive.
When to start your search
You shouldn’t start your search more than 30 days before you need a place since any homes you see will rent before you’re ready to move. Leases generally start on the 1st or the 15th of the month, so basically plan for one of those move-in dates and back out 30 days from there to know when to start. When you find a place you like you can contact the landlord/property manager to schedule a viewing.
Be careful of location
Make sure the home/apartment you’d be getting isn’t close to a major road or — worse yet — the train tracks. Caltrain runs from 4:30am to 1:30am, and while this schedule won’t apply to every part of the Valley, you could be stuck with a train passing by at all hours of the night.
If you like a place, you should be ready to submit all your paperwork and a deposit on the spot. Many people have spent a day touring homes and decided they liked on they saw earlier in the day best only to learn that someone else beat them to it. While landlords have some latitude, state law requires they accept the first qualified applicant (that term “qualified” is where they can slant things to favor someone who applied later).
WHAT YOU NEED TO RENT IN SILICON VALLEY
As mentioned, it’s a good idea to have your documents in hand when viewing a property, just in case you fall in love with it and want to lock it down quickly and hassle free. Here’s what you’ll need to rent:
California state prohibits landlords from inquiring about the residency or immigration status of a prospective renter, so you won’t need to provide a Social Security number.
BUYING IN SILICON VALLEY
The average home buyer in the San Jose Metro area will need to plan on making at least $255,836 in order to buy a house, according to HSH. This is based on the median house price of $1.25 Million and monthly payments of $5,946 for a 30-year fixed-rate mortgage.
There are no restrictions on purchasing a property by foreigners in Silicon Valley (or the rest of the United States). Qualified foreign buyers will need to place a larger down payment on their property than US citizens to acquire financing (generally around 30-40% vs 20% for local buyers). Income verification is a must.
Generally speaking, fees will be split between the buyer and seller in order to pay agents on both sides. Fees will range from 2-6%, depending on where the property is purchased and what local laws are regarding sales. For example, San Jose has a transfer fee that must be paid that is about 0.16% of the final sales price.
Homes here are, as you’d expect, very expensive.
Median Silicon Valley home costs:
Studio/1 bedroom = $499,000
2 bedroom = $729,000
3 bedroom = $1,050,000
4 bedroom = $1,680,000
HELPFUL REAL ESTATE WEBSITES
Padmapper.com – Padmapper pulls in rental properties from over 100 sources and displays them in a map view. You can easily filter the results based on home size, cost, and whether pets are allowed.
Zillow or Trulia – Similar in functionality (and owned by the same company) both sites can be searched for properties for rent or for sale. They generally have the exact same listings; the main difference is how they display the results based on your search criteria.
Craigslist – This is not just a place to find a home: you can find pretty much anything you can think of on Craigslist. But it can be a great place to find a rental or a roommate. Just be more careful with the properties you see here since there is not a lot of quality control.