Housing in 2018: San Jose neighborhoods top the nation’s ‘hottest’ list

Housing in 2018: San Jose neighborhoods top the nation’s ‘hottest’ list SAN JOSE — More bad news for people house-hunting in the Bay Area: Of the 10 hottest neighborhoods in the country this year, according to the real estate website Redfin, nine are in the San Jose metro area. The last is in San Francisco. Redfin experts say that’s largely because tech workers, even very well compensated ones, are getting priced out of the San Francisco Peninsula. Others are drawn by new jobs from companies such as Google and Apple — or by Google’s plans to build a downtown campus around San Jose’s largest transit hub, Diridon Station. “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,” said Redfin Silicon Valley agent Kalena Masching. Start your day with the news you need from the Bay Area and beyond. Sign up for our new Morning Report weekday newsletter. Compared to Palo Alto, where the median sale price last year topped $2.5 million, and San Francisco, where the average home sold for $1.3 million, San Jose’s median home price of over $1 million (and rising) apparently looks like a deal. Topping the list is San Jose’s Bucknall neighborhood, where the median sale price last year was $1.57 million and 100 percent of homes sold for above list price. In recent weeks, Masching said, open houses have been swamped, homes have been getting 15 to 20 offers each, and people have taken off work to check out houses the moment they come on the market. She’s also noticed something else: “What we’re seeing is a disregard for recent comparable sales and people deciding what the home is worth to them and just giving that as their offer.” The demand for real estate in the South Bay has been well documented; late last year, Zillow predicted the San Jose metropolitan area would be the hottest housing market in the country in 2018. But that it landed nine neighborhoods out of 10 on Redfin’s latest list surprised even Redfin economist Nela Richardson. The interest, she said, is fueled by a lack of housing supply throughout the Bay Area — and “speculative interest” in Google’s expansion. “Basically Google’s just extending its tentacles,” Richardson said, “and yet it’s having a dramatic effect on one city.” Redfin created the list based on the increase in the number of homes marked as “favorites” in each area and the number of page views on Redfin.com. As Redfin noted, this further uptick in interest will only put more pressure on the housing market. In December, the San Jose area had the lowest rate of homes per sale that Redfin had ever recorded — anywhere in the country — and its home prices rose a whopping 31.9 percent from the previous year. With two neighborhoods on the list, San Jose’s prominence was worrisome to the city’s mayor, Sam Liccardo. “We typically would welcome being on a top 10 list of hottest anything,” Liccardo said, “but in this case our housing market has been plenty hot for plenty long enough, and we need to get about the business of cooling the market by building the supply that’s needed for the thousands of families who are struggling to survive.” REDFIN’S 2018 HOTTEST NEIGHBORHOODS LIST 1. Bucknall (San Jose) Median sale price (Dec. 2017): $1,565,000 Percent of homes that sold above list price (Dec. 2017): 100 percent How much above list price: 23.8 percent 2. Cambrian (San Jose) Median sale price (Dec. 2017): $1,244,000 Percent of homes that sold above list price (Dec. 2017): 100 percent How much above list price: 18 percent 3. White Oak (Campbell) Median sale price (Dec. 2017): $1,010,000 Percent of homes that sold above list price (Dec. 2017): 66.7 percent How much above list price: 5.7 percent 4. Ortega (Sunnyvale, San Jose metro area) Median sale price (Dec. 2017): $1,920,000 Percent of homes that sold above list price (Dec. 2017): 100 percent How much above list price: 16.5 percent 5. West Santa Clara (San Jose metro area) Median sale price (Dec. 2017): $1,237,500 Percent of homes that sold above list price (Dec. 2017): 90.3 percent How much above list price: 16.1 percent 6. Sunnyvale West (San Jose metro area) Median sale price (Dec. 2017): $1,945,000 Percent of homes that sold above list price (Dec. 2017): 91.3 percent How much above list price: 18.3 percent 7. Lakewood (Sunnyvale, San Jose metro area) Median sale price (Dec. 2017): $1,200,000 Percent of homes that sold above list price (Dec. 2017): 92.3 percent How much above list price: 21.3 percent 8. Sunnyside (San Francisco) Median sale price (Dec. 2017): $1,272,500 Percent of homes that sold above list price (Dec. 2017): 89.5 percent How much above list price: 25 percent 9. Blacow (Fremont, San Jose metro area) Median sale price (Dec. 2017): $1,005,000 Percent of homes that sold above list price (Dec. 2017): 91.7 percent How much above list price: 9.4 percent 10. Rex Manor (Mountain View, San Jose metro area) Median sale price (Dec. 2017): $1,500,000 Percent of homes that sold above list price (Dec. 2017): 83.9 percent How much above list price? 14.4 percent Source: Redfin