California claims the top nine highest priced real estate markets in America (outside of New York). Obviously Northern California takes the title in terms of the highest priced properties within this bracket. This is partially fuelled by tech giants like Facebook and Google, as the huge computer and software developer salaries can accommodate the lofty home prices. Other reasons are in a large part due to the charm of the west coast lifestyle. Additionally high-end shopping and restaurants in these areas will help to attract luxury home buyers. There are many niche high-end properties throughout California in Orange County, San Diego, San Francisco and Los Angeles.
Being a first time home buyer in these markets can be especially difficult. With a basic starting salary of $200k+ many of the younger home buyers employed by tech companies are swarming the market for first family homes. These residential properties are being used as home offices for tech employees working from home. The phenomena of using a residential home as a “live work” space for tech people has been around quite a while. Many of the newer computer software or development jobs allow workers to come in to the office only one or two days a week. This means they are looking for houses to offset taxes, work from home or be closer to the office. The tech real estate market is no longer a news item as it has been sweeping the west coast for several decades.
Originally Apple, Microsoft and others set up Silicon Valley and the surrounding Sunnyvale, Cupertino and San Mateo as the marching ground for all things computer based. As the industry grew so did the median home prices in the Silicon Valley region. In other areas such as Orange County, the higher prices may be due to a mixture of luxury buyers from overseas and new business growth in Southern California.
So what does it mean for potential home buyers when people are predicting another California market crash as stated in the recent real estate news? Probably not too much. The last crash really did not affect luxury real estate within these "golden" areas of Northern and Southern California. Los Angeles suburb cities like San Marino never saw a significant “fire sale” of prices as did most of surrounding Orange County and greater Los Angeles. Luxury real estate property in Orange County areas like Newport Beach did not see a huge dip in prices like in adjacent lower income neighborhoods.
The Northern California real estate “tech belt” was also somewhat immune to the deeply discounted home purchases of the recent past. While there was a slight dip in San Francisco commercial real estate deals and rental prices, the surrounding high income areas remained steady. Northern California real estate as a whole is back in action.