Positive 2014 housing market outlook for Silicon Valley

The current slowdown in home sales is attributed to seasonal factors, combined with higher home prices and a rise in interest rates. This development does not disturb some experts in the real estate industry.

According to Carole Rodoni, president of Bamboo Consulting, Inc. and formerly president of Fox and Carskadon Real Estate, chief operating officer of Cornish and Carey Real Estate, and president of Alain Pinel Realtors home prices have come back an average of 24 percent in the Bay Area. In Silicon Valley, she said the market has been “on fire.” In some places like Palo Alto, prices are up 40 percent.

A speaker at the Palo Alto District’s January tour meeting, Rodoni said the San Francisco Bay Area is experiencing an “economic revolution,” attracting investors, international buyers and those with cash. Compared to the rest of the state and nation, real estate in Silicon Valley moves at a different pace.

“Silicon Valley is the heart of technology. At the end of the day, it’s a good thing because you cannot own or run a business today without technology,” said Rodoni.

Many baby incubator tech companies are sprouting in the region and mammoth giant companies based here, like Apple, Google and Yahoo, are acquiring more companies and workers every day. Start-ups that succeed will go public and give birth to more millionaires, according to Rodoni.

Rodoni predicts this year Silicon Valley will continue to have multiple segment markets, depending on price point, location and area. Buyers need to decide which type of market they are in – is it a negotiable market or a multiple offer market. If it is the latter, are they willing to pay the premium price?

It is still a very good time to buy. While an interest rate of 2.5 percent last year would be better than 3 or 4 percent this year, it is still better than the average 7 percent, said Rodoni.

“At these still very low interest rates, you gain equity on your property and it doesn’t have to appreciate,” explained Rodoni.

Rodoni said she has been asked if the slowdown is a sign of a bubble bursting. She believes not. The market is merely “taking a breath” for now. It doesn’t mean it is in a bad state; it is merely readjusting, said Rodoni. Expect more action in the spring. It will be a good market moving forward, she said.