While the rest of the county buzzed Friday about Facebook’s (FB) first day as a public company, real estate agent Brian Chancellor saw the effect months earlier.
Chancellor put a client’s house on the market in February for roughly $1.2 million — a bit underpriced, he said. The home in Palo Alto, Calif., sits adjacent to Menlo Park, the home of the social-media darling.
Twenty days and 38 offers later, the house sold for $1.65 million.
“It’s not uncommon that even when somebody goes well over the asking price … they may not get the home,” Chancellor said. “There are people who are putting in phenomenal offers and still not prevailing.”
As Facebook and its social media and tech brethren boom, so, too, does the housing market in Silicon Valley and surrounding areas. In San Mateo and Santa Clara counties, home sales rose 34% and 13% in April from a year earlier, according to San Diego-based DataQuick. San Francisco Bay Area sales as a whole grew 13%.
The Silicon Valley market picked up visibly starting in late January, said local real estate agent Francis Rolland. Reports surfaced around that time of an imminent Facebook IPO.
There just might be a little too much excitement, Rolland said. Some waited for the IPO to get into the market, and he said they might later find out it won’t change much.
“It’s a real effect, but it’s too hyped in a way,” Rolland said.
It’s not just about Facebook, Chancellor said, with tech-world newbies Yelp (YELP), Twitter, LinkedIn (LNKD) and Zynga (ZNGA) along with standbys Apple (AAPL) and Google (GOOG) all based in Silicon Valley or San Francisco.
“Facebook is leading the pack, but there’s money here from tech companies,” Chancellor said.
It’s storyline already known by Chancellor, an area agent for nearly two decades. Now-defunct companies like Pets.com disappeared almost as quickly as they appeared on the scene in the late 1990s and early 2000s during the dot-com bubble.
“The difference is that the techies of today are a little bit more self-aware,” Chancellor said. “The dot-com boom really was just greedy to say the least. I think this generation is more thought out.”
Prices, no matter how outrageous, aren’t rising quite as quickly this time around, said Suzanne Yost, president of the Silicon Valley Association of Realtors. The median price remained flat from April 2011 at $550,000 in San Mateo County, though rose 9.3% to $513,500 in Santa Clara County, according to DataQuick
Yost said appraisals are more stringent now than previous boom times, though there’s also awareness on the part of buyers.
“What we saw then was a much more rapid increase in prices,” Yost said. “We’re not seeing that yet here.”
A sparse amount of new construction is also limiting options for buyers, Yost said. The area’s geographic mix of hills and ocean makes for few empty patches of land.
Properties are moving fast, with reasonably priced homes spending just two or three weeks on market, Yost said.
Those looking to rent don’t have much of an option, with just 76 new units completed in the San Francisco metro since the second quarter 2011, according to research firm Marcus & Millichap.
Some prospective tenants, Chancellor said, will offer to pay more than the asking price or give six months’ rent upfront.
“It’s not to say we don’t have our issues, but as far as bright places to go in the world, we’re it,” Chancellor said.