Hybrid work policies may be hiking home values
Many Bay Area tech giants like Zoom and Meta are now requiring employees to be in the office for at least part of the week. Beyond whatever impact in-person work is having on productivity, it might also be making homes in parts of the region more expensive.
Home values in Silicon Valley cities such as San Jose, Cupertino and Campbell are on the rise, with properties often being snatched up quickly and at well above asking price. Some experts believe in-person and hybrid work policies are helping drive the market, causing buyers to seek spacious homes within reasonable commuting distance of their jobs.
In Campbell, for example, home values have grown at the fastest rates in the past six months of any city in the San Francisco and San Jose metropolitan areas. Between March and September, the city’s typical home values rose from $1.54 million to $1.64 million, according to data from home listing site Zillow, a 6.5% jump.
Average values in Cupertino, home to Apple’s headquarters, increased at the second-highest rate of 6.4% over the same period, from $2.51 million to $2.67 million. And in San Jose, they rose by 5.6% from $1.25 million to $1.32 million over the same period, surpassing those in San Francisco, where they remained essentially flat at $1.26 million.
Home values in California overall increased by just 4.2% between March and September.
Besides rising home values, there are other signs cities in and around the South Bay are becoming increasingly competitive for home buyers. Nearly 90% of homes in Cupertino sold in August went for more than the asking price, according to the most recent data available from home listing site Redfin, compared to just over half in February. That’s the highest share in the Bay Area among cities with at least 10 home sales in both months.
Most home sellers are still moving primarily for affordability reasons, according to Daryl Fairweather, chief economist for Redfin. But she pointed out cheaper metros like Boise, Idaho, where home prices spiked due to an influx of remote workers have since seen values drop. In contrast, home values in cities closer to job centers like San Jose or Sacramento have remained relatively elevated.
Some tech workers who left the Bay Area for cheaper cities like Austin, Texas, are now looking for opportunities to return, according to Nikki Edwards, a Realtor with San Josebased EQ1 Real Estate.
“With a lot of these big companies requiring people to come back into the office minimum three days a week, (workers) know that they need to be there and they know they need to live a lot closer,” Edwards said.
Edwards said she recently sold a Sunnyvale home to a senior director at Nvidia who wanted to live close to the office. The home, she added, went for $200,000 above the list price just a week after it was listed.