Real Estate Journal Online

While the real estate market may not be booming yet, in Silicon Valley prices held steady in May with median resale values for single-family homes at $585,000 – the same as in May 2010[1]. While that might not seem, at first, like a huge improvement, Silicon Valley is in much better shape than much of the rest of the country thanks to buyers with “well-paying tech jobs.” Some analysts also believe that the local market could be getting a boost from successful initial public offerings by companies like LinkedIn. “Newly rich workers” are bidding up home values in Silicon Valley, reported Bloomberg, and in area like Palo Alto, home of Facebook, Inc., property prices have climbed as much as 20 percent in the past year. Similarly LinkedIn Corp’s home base of Mountain View is on the rise with home prices up 3.1 percent over a year ago[2].

“I expect we’ll see an explosion in the next couple of years,” said Kenneth Rosen, an economist at the University of California, Berkeley. Rosen believes that IPO filings in 2011 are leading to new millionaires – “young people with real money” – and that since Silicon Valley is the “hub for early stage companies” its markets will likely continue to benefit from the spending habits of these individuals as far into the future as 2013. Daniel Siciliano, associate dean at Stanford Law School, says that newly-rich people tend to want to “manifest their wealth.” One of the classic ways to do this is through the purchase of a home.

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