What It’s Like to House-Hunt in Silicon Valley, the Priciest Market in the US
It’s Sunday, which means house-hunting for Barry and Katie Templin. They have been on the prowl for months and saving for years, looking for a place with reasonable commutes to their technology jobs and good public schools for their two young children. They hope that is not too much to ask, even in Silicon Valley, the nation’s most expensive housing market.
They pull their decade-old SUV up to a house that needs to be torn down, yet is offered at $1.5 million (roughly Rs. 9 crores). “Home has original GE metal kitchen cabinets,” the listing brags. They walk up to find the house unlocked and empty. Black mold crawls over the walls. The ceiling is caving in. The wood floors groan as they pass through.
“It’s like going into a haunted house,” Barry Templin says.
“I can’t believe this is one-point-five,” Katie Templin says.
“It’s because it’s Los Gatos,” explains agent Laura DeFilippo of Alain Pinel Realtors.
The median home value in the San Jose region – which includes the headquarters of Facebook, Apple and Google – has reached $922,000, five times higher than that of the nation overall and 2.5 times the Washington area’s $356,000 median, according to real estate website Zillow.com.
That’s also 20 percent higher than nearby San Francisco, the nation’s no. 2 market and the usual target of eye-rolling about a tech-fueled, out-of-control housing market.
But the market is even crazier in the sedate suburbs to the south, in places such as Los Gatos.
The situation in Silicon Valley has long been a full-blown affordability crisis for teachers and construction workers, anyone who draws a paycheck without stock options. Even doctors and attorneys find themselves priced out of popular areas, according to real estate agents. Now, it is becoming harder for tech workers who are willing to spend well over $1 million (roughly Rs. 6 crores) for what was once a standard-issue suburban home.
As prices spiral ever-higher, there is growing concern about Silicon Valley’s ability to attract and keep its tech talent, especially as the millennial workers who flocked here during the current boom grow up, shed roommates, start families and look for homes of their own.
“It’s an increasingly challenging phenomenon,” said Carl Guardino, president of the Silicon Valley Leadership Group, which has found that the region’s company executives cite housing as their biggest impediment to recruitment.
For people moving to Silicon Valley, home prices often lead to disillusionment, said Eric Boyenga, a real estate agent specializing in the area. Many still feel compelled to move. But not everyone gives in.
Boyenga recalled spending weeks showing homes to a client from North Carolina who had just sold his company to eBay, based in San Jose, and planned to move to Silicon Valley. His budget was $6 million. But he decided after weeks of looking that it was cheaper to stay on the East Coast and fly out a couple of times each month.
“What you get for $4 million to $5 million (roughly Rs. 33 crores) here is what you can get for $350,000 in North Carolina,” Boyenga said.
Barry and Katie Templin moved to Silicon Valley right out of college, more than a decade ago. They rented, then bought a small condo in San Jose, then went back to renting. They got married. They had a son. Wyatt is now 3. Their daughter, Hazel, arrived four months ago. Now, the Templins want a place to put down roots.
They both grew up in the Midwest – he’s from Indiana, she’s from Wisconsin – and their parents back home delight in hearing about the house hunt. To them, it sounds like a tragicomedy. The Templins are up against buyers paying all in cash and willing to waive contingencies. And $1 million is the absolute bottom floor. (Anything lower leads to an open-house stampede and a bidding war.)
“My parents are just horrified by the housing prices,” Barry Templin, 37, said, laughing.
Katie Templin, 36, said her father enjoys pointing out that she could buy an entire office building in her hometown of La Crosse, Wisconsin. To make his point, he sent her a listing for a three-story, brick former bank branch.
“He thinks it’s just absurd,” Katie Templin said.
“But out here, it doesn’t shock people,” Barry Templin said.
They love Silicon Valley. The sun is always shining. The winters are mild. Beaches and mountains are a one-hour drive away. They both work at start-ups. He is vice president of engineering at CardioKinetix, a medical device company working on an implant for heart failure. She is a program manager at AcelRx Pharmaceuticals.
“You can’t beat the opportunities available at tech companies,” she said.
Before crossing the haunted house off their list, the couple visited a property billed as a “Lovely Silicon Valley Farmhouse.” It was farmhouse red, but there was no farm. It sat off a quiet residential street. The kitchen was dated. The den had peculiar floor-and-ceiling wood paneling. But it had three beds and 1,500 square feet of living space for $1.25 million.
In Silicon Valley, that’s a deal.
They put it on their list of maybes.
DeFilippo, their agent, used to work as an attorney. But two years ago – when she moved from Atlanta to Silicon Valley, in part to be closer to her sister, an Apple executive – she became fascinated by the local real estate market. So she switched careers. Now, she is making more than she ever did as an attorney.
But that still hasn’t allowed her to afford her own home. As she took the Templins to tour another home, DeFilippo drove by the tiny two-bedroom house she rents for $3,600 a month.
“I’d like to buy, but it’s not in the foreseeable future,” she said.
The Templins’ infant daughter was getting fussy. The day’s last house would be a California Mission Style home for $1.4 million (roughly Rs. 9 crores). But the front door was locked. The lockbox was empty. The listing agent didn’t answer DeFilippo’s calls. The seller holds all the power in a hot market like this one. Katie Templin peered into the windows. She wasn’t thrilled by the location.
They decided to keep hunting. DeFilippo was certain that the Templins would eventually find a home to buy.
“They’ll get in here,” she said. “I know they will.”
Weeks later, after several more house-hunting sorties and failing to win a fierce bidding war for a $1.3 million (roughly Rs. 8 crores) fixer-upper, they did. It was another $1.3 million home. It was in good shape, with four bedrooms and two bathrooms, and offered 1,600 square feet. But it was located in south San Jose, just outside their ideal location.
The house is a mid-century modern tract home, what is known as an Eichler, named after noted developer Joseph Eichler, who built 11,000 clean-lined, simple homes in California after World War II. Steve Jobs credited growing up in an Eichler house in Mountain View with influencing his design aesthetic at Apple, although there is some controversy about whether the childhood home of Silicon Valley’s patron saint was really an Eichler.
In any case, the Templins now have an Eichler of their own. They move in January. They will happily leave the house hunt to someone else.
© 2016 The Washington Post
Tags: Internet, Silicon Valley[“Source-Gadgets”]