The NVIDIA Stock Effect on Santa Clara Real Estate

Today, I read an article in the Wall Street Journal and it mentioned house prices in the City of Santa Clara (specifically) were going crazy because of NVIDIA’s (HQ in Santa Clara) stock skyrocketing.  At first, I didn’t quite believe it as I figured it would have a similar effect Bay Area-wide as its employees are all over the Bay Area.  But then I started looking at the data.  I looked at the number of listings in many cities around the Bay Area and normalized it to the population of each city.  To my surprise, Santa Clara did have the highest number of residents per listing, followed by the surrounding cities of Milpitas, San Jose, and Sunnyvale.  Thus, Santa Clara is currently showing to be an epicenter of residential real estate heat as of February 27, 2024.  It also did confirm that residents per listing would appear to be representative of a city’s residential real estate competitiveness.  Generally, this heat does tend to even out over time and into neighboring cities as areas get too competitive and expensive.  In addition, the number of residents per available rental isn’t as high in Santa Clara, which means that if you are a renter, you can probably get your choice of places to rent in the City of Santa Clara. 

What does this mean?  If you own property in Santa Clara, North San Jose, Milpitas, or Sunnyvale that you rent out or you are thinking about leaving those areas for another area, now could be a great time to take advantage of the low inventory in those areas and maximize the sale price of your property.  If you are considering it, do it before many of the owners of rental properties decide to sell and increase the inventory.  Worried about the tax on the gain?  You could 1031 into another income-producing property (if you own a rental) or use the $500,000 gain exclusion on the sale of your primary residence.   If you need recommendations for a real estate agent or information on 1031’s send me a note.