All about Life & Real Estate in Silicon Valley – Broker Michael Koo's Blog.

The Bay Area's home prices have reached a new all-time high, with Silicon Valley and San Mateo County becoming the first areas in the U.S. to achieve median home prices of $2 million.

Buying a home requires financial planning and should not be considered solely as an investment. It is advisable to keep housing costs below 31-40% of income and to use a mortgage calculator to determine affordability. Improving credit scores can lead to lower mortgage rates. Homebuyers should be prepared for additional costs like property taxes and insurance, and save at least 20% for a down payment to avoid private mortgage insurance (PMI). Having necessary documents ready for the loan process and getting pre-approved can demonstrate seriousness in competitive markets.

California's housing market faces challenges in 2024 due to rising mortgage rates and a persistent lack of inventory. Price predictions suggest a modest increase in median home prices. Factors like interest rates and emerging trends such as iBuyers and shifting demographics will impact the market. Policy changes, like rent control and regulations on short-term rentals, could also influence the housing landscape. The 2024 forecast anticipates a rebound in the housing market with increased home sales and a rise in median home prices driven by declining mortgage rates.

Santa Clara County's total assessed property value has risen to $696.8 billion, a 5.4% increase from the previous year. However, this growth is insufficient to meet the escalating costs of services due to fewer property transfers and a decrease in new construction, especially in commercial properties. This results in less property tax revenue, affecting services such as education. The slow growth is attributed to changes in property ownership and a drop in new commercial construction, causing high office vacancy rates. Lowering interest rates could potentially mitigate the expected decline in property value growth.