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Nvidia's stock price is soaring. Could Silicon Valley home prices follow?
Nvidia's stock price is soaring. Could Silicon Valley home prices follow?

San Francisco Chronicle​

time4 days ago

  • Business
  • San Francisco Chronicle​

Nvidia's stock price is soaring. Could Silicon Valley home prices follow?

Silicon Valley is riding the AI-driven tech boom, with Santa Clara-based Nvidia now the world's most valuable public company. But the wealth of its workers and investors, which has helped make the region one of the hottest housing markets in the Bay Area, no longer appears to be translating to home sales as smoothly as it once did. The Silicon Valley housing market is closely linked to the booms and busts of its tech industry, real estate agents told the Chronicle. So far this year, due in large part to the Trump administration, the industry has experienced a whirlwind of changes. That's put many would-be homebuyers on guard, resulting in a market where homes still sell quickly, but where competition isn't as fierce as before. On the home price-boosting side of the ledger, Silicon Valley giants like Nvidia and Meta have seen soaring stock prices, making their workers and investors flush with wealth they can use to buy a $1.7 million home in cash. Plus the Trump administration's support of cryptocurrency has sent the value of Bitcoin to record highs, adding to investors' wealth. Take Nvidia for example. The company, which is now valued at more than $4 trillion, had a closing stock price Thursday of about $164 per share, enormously more than the $10.50 price on July 10, 2020. Someone who invested $100,000 in the company five years ago would have more than $1.5 million now. And with many Nvidia employees receiving stock as part of their compensation, the company has likely single-handedly created a new stock of Bay Area millionaires, leading to a more competitive field of homebuyers. That growth has helped make the home values in Santa Clara and San Mateo counties the highest among large counties in the U.S. And while mortgage rates are still high, keeping many potential buyers out of the market, the buyers still in the market are facing less competition for homes, said Nikki Edwards, a Realtor with Silicon Valley-based EQ1 Real Estate. 'For those who are able and willing to buy, it's a good opportunity — one of the best opportunities we've seen since the winter of 2023,' she said. But it's not all good news for tech workers and investors. Some companies' stocks have only recently recovered after crashing in April, when President Donald Trump announced a wave of tariffs, and for most that are growing, they haven't seen close to Nvidia's level of success. Layoffs have been another concern, with Santa Clara tech company Intel announcing this week it was cutting nearly 600 Northern California jobs. Several tech giants have been downscaling since mid-2022, with Microsoft and Google conducting another round of layoffs buyouts this year. 'All the (tech) employees felt quite invulnerable and quite confident … that they were very safe (pre-2022), so they could take big swings,' said John Young, a Menlo Park-based Realtor with Golden Gate Sotheby's International Realty. 'Now, it's less so the case.' Mortgage rates are also still high, forcing homebuyers who aren't at the top of the income range to decide whether a South Bay home is worth a five-figure monthly payment. The result is a 'mixed bag,' said Will Klopp, managing director of Compass' Silicon Valley office. Home value growth in Santa Clara and San Mateo counties has sputtered in recent months, according to data from real estate brokerage Zillow, a trend mirrored in much of the rest of the country. 'It's kind of a split market,' Klopp said. 'Some homes are selling quickly with multiple offers, while others linger and require price reductions.' Political uncertainty could also have a chilling effect on the Silicon Valley housing market, said Sandy Jamison, a real estate broker with Tuscana Properties in Campbell. She pointed to the Trump administration's immigration policies, noting that many of the region's residents are on work visas. With the future unclear, some workers on visas are hesitant to buy or sell a home without knowing whether they'll be able to remain in the country. '(There's) a lot of change happening at the macro level right now that is putting a lot of people in (a state of) fear,' Jamison said. 'And what do people do when they have fear? They just freeze up and do nothing.'

Home values in this hypercompetitive part of the Bay Area are starting to dip
Home values in this hypercompetitive part of the Bay Area are starting to dip

San Francisco Chronicle​

time22-06-2025

  • Business
  • San Francisco Chronicle​

Home values in this hypercompetitive part of the Bay Area are starting to dip

For the past two years, Silicon Valley home values have soared to record highs, with one of the country's most expensive housing markets becoming even more so. But recently, that trend has begun to curve downward. The typical home value in Santa Clara County dipped from about $1.72 million in November to $1.69 million in May, according to data from real estate company Zillow. That 2% decline is nowhere near enough to erase the nearly 40% increase in the county's home values since 2020, and other California counties have seen home values fall even further in the past six months. But the shift underscores how the cooling U.S. housing market is affecting even hypercompetitive regions such as the Bay Area. A booming tech industry, and particularly optimism around artificial intelligence, led to a significant increase in Silicon Valley home values over the past five years, with many tech workers making offers far above sellers' asking prices. But President Donald Trump's economic policies rattled the stock market and consumer confidence earlier this year, causing some homebuyers across the U.S. to withdraw, especially as interest rates remain high. That doesn't mean home values are in free fall or that homes are suddenly affordable for many Bay Area residents. But it does mean some sellers are having to whittle down their prices to strike a deal. What's happening in the South Bay is also occurring across California: More homes are for sale, but demand hasn't kept up, making bidding wars less fierce. About 7,000 homes in Santa Clara County were put on the market from January to May this year, about 4% more than the same period last year, according to data from real estate brokerage Redfin. But the number of pending sales has dipped slightly. The Silicon Valley housing market is still one of the hottest in the Bay Area. Redfin data shows homes in Santa Clara and San Mateo counties still sell in a median of two weeks, and most homes sell above asking price. Zillow's estimates from earlier this year even seemed to indicate that home values in the region's most expensive neighborhoods would remain immune from the economic volatility that rippled through other markets. 'If you're in a really good ZIP code or if the home is marketed in the right way, a buyer will still (want to) get it,' said Nikki Edwards, a Realtor with Silicon Valley-based EQ1 Real Estate. But some sellers who hoped to earn top dollar are now finding they may need to scale back expectations. Buyers are now competing with two or three other offers instead of 15 or 20, Edwards said. Because of that, sellers 'can't be overly aggressive on price.' The Bay Area saw a 'very big increase' in price cuts during spring, as has much of the U.S., said Patrick Carlisle, chief market analyst at Compass. The number of Bay Area listings with price reductions reached its highest May level in at least five years last month, he added. It's not just the Bay Area's tech hubs that are seeing home values start to level out. Contra Costa and Marin counties have also seen their values dip, while growth has flattened in much of the rest of the state.

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