Silicon Valley Real Estate

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Will YIMBY Create Increased Condo Demand?

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A recent look at YIMBY vs NIMBY said that a person’s attitude about high-density housing was strongly affected by how urban centers were widely viewed when that person was about 18. Boomers were about 18 years old at a time when urban centers had numerous problems reported. When other generations were 18, urban life was viewed as having more activities, parties, and nightlife. Other generations were 18 when suburbs were claimed to be resource-wasteful and caused excessive ecological damage.

Currently Silicon Valley house prices are growing faster than Silicon Valley condo prices. This could be due to a different proportion of renters vs owners for condos vs. houses. It could be due to houses typically being larger than condos.

It should be noted that increased mortgage interest rates have increased the cost of buying a condo. Flat prices do not mean demand is falling.

Will the attitudes of new generations drive the demand for condos and thus their prices up? More discussion is posted at https://julianalee.com/blog/nimby-yimby-condo-demand/

Building “Affordable Housing”

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Does the need for more housing that is affordable mean simply low-income housing? Projects that are being proposed focus on building small condos as the path to creating more affordable housing. That does not address what most residents want. If you look at the Santa Clara house prices vs. Santa Clara condo prices, you will see that the price of houses has been growing faster than condos. In fact, the price of condos has been essentially flat since 2018. The increase in mortgage interest rates would imply that recent condo buyers have higher payments but the demand vs. supply for condos is less than the demand vs. supply for houses, judging by price trends.

Reducing government fees and regulations is rarely done. Adding more fees and regulations is unfortunately the path our different governments take. Making housing more affordable is about removing costs, not adding them.

If our governements simply changed regulations to allow higher density housing, builders would probably mostly ignore studios and one-bedroom units and instead build three or more bedroom units. Doing that would make it easier to recover the building costs and would actually drive down the cost per square foot. (Kitchens and bathrooms are much more expensive to build than bedrooms.) Regulations that encourage building larger homes sounds like the government is helping those who are better off at the expense of those who are less well off, but is a studio condo or even a one bedroom condo appropriate housing for a family?

Is adding more regulations and spending more tax dollars on small housing units creating more housing that is affordable for families?

Median Days On Market

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The roughly two-year-long pronounced difference in house price growth between Santa Clara County and cities near San Francisco invites us to examine other trends.

The volatility of “days on market (DOM)” makes it a trend that is harder to use when looking for changes in real estate trends. DOM is an important attribute to look at, however. It is what sellers, buyers, and agents feel. DOM is also widely available for Silicon Valley cities because our local MLS’s publish it and when listing agents begin listing a new home for sale, they will almost always look at it and share it with their home seller.

DOM has been quite low for Daly City houses since the beginning of 2023 up to the present (Dec 17, 2024). Even the median DOM shows significant volatility during this period, varying from about 11 days to almost 20 days.

Now look at DOM for a Santa Clara County city such as Sunnyvale. The median days on market for a Sunnyvale house has barely moved from 8 days to 7 days from the beginning of 2023 up to the present (Dec17, 2024). The median DOM had been low between 2012 and 2022 but showed noticeable volatility.

It would be easy to conclude that home sellers, home buyers, and real estate agents have good agreement for how much each house can be sold for.

What we see in Sunnyvale during this period is that 70 to 80 percent of houses are selling over list price, and the average sales price to list price has varied between 105% and 112%. It should be noted that average and median Sunnyvale house prices are very close to each other. The initial expected price does not seem as consistent as the agreed-upon price between seller and buyer.

It is hard to draw any conclusion about Sunnyvale’s (and several other nearby cities) median DOM other than that both home buyers and home sellers believe the best price can be reached within one week. Homeowners, whether current or prospective, have widely varying expectations and knowledge. It would appear that the real estate agents involved are providing information that is effective in reaching an agreement. The same does not hold as strongly for cities near South San Francisco such as Daly City. No connection is seen between DOM and house price trends at this time.

Removing Protected Trees

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Many cities have enacted ordinances to protect various trees within their city. A long-time Palo Alto homeowner recently achieved a court ruling forcing his neighbor to remove Coast Redwood Trees whose roots were damaging his house. The legal actions were made more difficult by a real estate agent who indemnified the buyer of the house in order to get the house sold.

A short summary by the long-time owner: In 2021, I sued my neighbor, with a one-sided result in my favor. I claimed for damage under state law #3479, and my neighbor’s ONLY defense was: “I was complying with PA’s tree ordinance”. The PA ordinance will not win against superseding state law. The 7-page opinion of the state judge never even mentioned the PA ordinance because it’s irrelevant against state law. But I still was forced to sue and pay my (winning) legal fees. My neighbor chose foolishly to go to court against state law, using only the PA ordinance as a defense. He had a losing case from the start, so he had to pay his (losing) legal fees.

Learn more about Palo Alto’s protected trees and the legal action.

Bubb Park – Mountain View, CA

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Bubb Park is located behind Bubb School. Bubb Park is larger than the typical neighborhood park. It has a picnic area large enough for small groups and it has restrooms.

Bubb Park, Mountain View, CA

Bubb Park has two different areas with playground equipment for children. There are lawn areas for relaxing but the athletic fields are not open to the public when school is in session 7:30 am to 4:00 pm. View more pictures of Bubb Park.