As the capital of Silicon Valley, the city of San Jose is the most expensive perimeter in the US, where the median home price is about $1 million. San Jose and the nearby cities of Sunnyvale and Santa Clara are a paradise for those who dream of working in the world’s largest tech corporations such as Google, Facebook, E-bay, PayPal and the like. But the word “expensive” may have a different meaning for those who work here.
Median household income is over $100,000. However, to qualify for a conventional mortgage
, a minimum annual income of $252,000 is required, according to Business Insider.
The major tech employers in the area are - Cisco Systems, IBM, eBay, Inc., and Adobe.
Among the largest employers in the area is the County of Santa Clara. Local administration keeps over 15,000 people employed.
The housing market though is in a great crisis. Middle-class families are forced to live further and further away from Silicon Valley as rent continues to increase. Real estate agents in San Jose are aware of the situation but they can’t change the market. The high salaries of those working in the Bay Area along with the high demand for housing drive the real estate prices up year after year. Moreover, some real estate agents in San Jose also work with Chinese investors who are willing to buy properties even if they don’t rent them out. They simply wait for the prices to go up and sell them later for a profit. Even distressed properties or properties deemed uninhabitable sell for more than $1.5 million. So, there is a housing shortage generated by the empty unoccupied houses.
Another interesting phenomenon can be seen among the businesses in this region. Many start-ups die because people spend so much on housing that they are left with little residual income. The purchasing power is extremely low, despite the high salaries. However, as most real estate agents in San Jose would agree, this is the place to be if you want to live in the heart of the Internet industry
, where innovation comes to life.
Renting in San Jose starts at $1,500 for a room. Housing arrangements are quite smart, though. In spite of living in a small bedroom, some renters also have access to building’s facilities, such as a co-working space, free breakfasts, a gym and access to a swimming pool. Saving for a down payment
is extremely difficult, especially for those who would like to settle down in San Jose. Since prices are ever ascending, the down payment required for a house is also growing. The only option to become a homeowner in San Jose or anywhere in the Bay Area would be to access a zero down home loan
In spite of the fact this city is hit by at least two major earthquakes every year, real estate agents in San Jose have nothing to complain about. The real estate market is booming. And any smart kid passionate about IT and technology will get here sooner or later, even though it might be for a temporary position or until they start their own company. In the Bay Area, renting is better than buying since there are fewer constraints. Here, homeownership becomes affordable only after marriage. For young professionals, the responsibility of owning a house would be suffocating, not only in San Jose but everywhere in Silicon Valley.