What should you look for when buying a luxury home in Silicon Valley? Whether it’s a move-up purchase or a first home, there are a few tips which will be helpful for you to know going into it that will make the whole home buying experience smoother and easier. We’ll hit on 3 areas: first geography & construction, second hyper local factors that impact market value, and finally qualities or features of the property or house itself.
It’s hard to assign an exact price tag on what constitutes an estate or luxury property, but in and near Silicon Valley, in most regions it’s the $2,000,000 and up price point (it will be less in Morgan Hill, Coyote and Gilroy – and likely more in Hillsborough).
1. Geography and Bay Area Construction: it’s different here!
The first and most important thing to understand is that real estate and housing construction vary from one region of the country (or the world) to the next. This is true for all types of homes, actually, but perhaps more obvious in the priciest homes. Luxury real estate in Silicon Valley is a little different from similarly expensive homes in other parts of the country due to our climate, soil conditions, and natural hazards, such as earthquakes. What seems mandatory for a high end home (and might be ideal to have elsewhere) could be a problem here, so it’s helpful to literally understand the lay of the land before you get too far along the home buying path. A couple of quick examples:
- A fabulous home in Boston or anywhere in New England may be built of brick.
- Here, a brick house is seldom seen because of earthquakes – we need our houses to move and bricks are not usually too good at that!
I mention these two upfront because well intentioned friends and relatives may want to stress the importance of this or that in a property – and it may simply not apply here. (Please see article: Qualify The Advice You’ll Accept When Buying or Selling a Home in Silicon Valley) If you are non-native to the San Francisco Bay Area, you may have assumptions about construction or architecture that may not work here. Please just be aware of that possibility.
2. Understand the importance of hyper local factors on the market value of a property
Schools can be a main driver for home values in the luxury market as all other segments. Home buyers may not know that the town or city boundaries are usually irrelevant to school district boundaries. Here are a few examples:
- In Saratoga there are 3 high school districts and 4 elementary school districts. Before buying anywhere in Saratoga, then, you’ll want to know which district is which and where you’re buying. If you want to utilize private schools, you may be delighted to find that you can buy more house for your money in one area of this lovely city than another. Or you may want one school area over another for any number of reasons.
- In Los Gatos there are 2 high school districts and 3 elementary school districts.
- In the Almaden Valley area of San Jose, there are 3 high school districts and 3 elementary school districts
Often the lesser public school districts will have a lower lid on pricing than the very top districts or schools, so it’s important, when analyzing the pricing of an estate home, to factor in the weight of the school.
Geography can be surprisingly important. Sometimes being on one side or the other of a major road or landmark can swing value 3% – even if it’s the same city, same zip code, same schools! I see this in Los Gatos along both Blossom Hill Road and again at Los Gatos-Almaden Road: people prefer to be closer to the foothills and prices jump noticeably just for being on one side of these roads than the other.
Walkability is key for many Silicon Valley home buyers, though perhaps less so for some luxury buyers since the larger parcels that often come with them preclude much walkability. Not always, though – in Palo Alto, Los Altos, Saratoga, Los Gatos and other Bay Area spots like Burlingame or San Mateo, some of the premier homes are not on acre lots but are “in town”.
3. What to look for in the estate property or high end home itself
At this point it’s a little trickier as each home buyer may have different priorities, likes/dislikes and tastes – so these are general guidelines only.
- Buy with selling in mind – you may have this property for 2 years, for 20 or more, but if you purchase an expensive home that is just too bizarre for the general consumption, you may be stuck with it when you are ready to sell it.
- Location, location, location is so overstated that it’s nearly effete, but it bears repeating anyway. Do you want to buy a $3 million house in a $1 million neighborhood? No, you probably don’t because it will really kill your resale value later. So too if you buy raw land or a “dozer” – don’t overbuild for the neighborhood. Try to be mid-range but don’t find yourself in the top 25% for home values in your area. (NB: in some areas, like Menlo Park, neighborhoods are fairly irregular or non-conforming and you find little houses that need work next to McMansions. It may not be possible to find conforming neighborhoods. If you love the area anyway – go for it – but realize the risks.)
- Quality construction and laoyout or floorplan matter. Many home buyers care about Feng Shui and the orientation of the home and its elements. But beyond that there are certain things that most buyers want or don’t want, and if your property violates these “rules” it can be harder to sell later. Here are a few:
- It’s considered poor to be able to see a toilet from the front door
- The layout is less desirable to have to go through a room to get to another room or to part of the house (such as going through the family room to get to the bedrooms)
- It is better to have a formal entry than to come straight into a living room, especially in a high end home
- The master bedroom should have its own private en-suite bath (this might seem obvious but you’d be surprised how many expensive houses have 2 bathrooms but neither dedicated to the master bedroom)
- Best to have the master bedroom face the back yard and not the street
- Better to have more land in back than in the front yard
- If you like to entertain, look for a large kitchen that includes 2 dishwashers, at least 2 regular ovens plus a microwave, a vegetable sink as well as the regular ones, and if possible, also a “butler’s pantry” between the kitchen and formal dining room.
- If the house has 2 stories, look for at least one bedroom and full bathroom on the first floor (and possibly a half bath as well so the guest bath is private)
- The nicest luxury homes may have 2 laundry areas: one on the first floor and one on the main floor, if it’s a 2 story home.
- Most home buyers looking at properties over $1.5 million want to find the master bathroom equipped with a large soaking tub, separate shower, and dual vanities. Jetted tubs are not as popular as a few years back due to concerns over bacteria lingering in the plumbing, so more often the tubs are “soaking” and not “jacuzzi” types.
- The master suite often includes a small wet bar or coffee bar as well as a fireplace, walk in closet(s) and private deck or balcony. In recent years these rooms have gotten bigger (and sillier – how much time do people spend there?) – a trend I believe will change over time.
- Luxury homes or estates usually have a minimum of a 3 car garage. (I’ve seen properties with as many as 10.)
- For the ultra luxury estates, usually there are guest or servant quarters (and likewise, in 2 story homes, a back staircase too).
- Pools tend to be found among high end homes, but sometimes also tennis courts, game rooms, indoor bowling alleys or other sports outlets (indoor golf driving or rifle shooting ranges too).
- Other rooms: libraries, offices, media rooms, hobby rooms may be included. Sometimes the home office or library may have a full bath nearby – a hint that it can double as a guest room.
- Green building: a growing trend is toward making high end homes eco-friendly or green. This may include the types of materials used in construction (a percentage recycled or of easily renewable sources), heating & cooling systems that can close off or turn on various parts of the house so it doesn’t all need to be heated or cooled, high levels of insulation to make the home “tight” and not have energy losses. Possibly solar panels to warm the water in the home or pool.
- Years ago there was a lot of focus on wiring for computers in estate properties. This is still the case but with the advent of wireless for everything, it’s not so critical. However, wiring for TV or movie viewing as well as musical entertainment throughout the home is very common with luxury properties – many owners want to be able to begin watching in one room and seamlessly move to another if so desired.
- In the luxury market it is very common to find security systems which include cameras at various locations. In the ultra high end houses, there may be “safe rooms” too.
At the end of the day, much of what is included should reflect your values and the way you want to live. Some luxury homes will have a private bath for every bedroom – but I’ve had clients say “why do I want that? I don’t want to spoil my kids or have more bathrooms to be cleaned”. How do you want to live?
There’s a balancing act between buying the home you want to enjoy and either overspending on a house or area or making a poor choice on an expensive ticket item that could be a great asset instead. It will help a lot to get good, local guidance from a trusted resource who’s got your back. Looking for that helpful real estate adviser? Give me a call or email me and we can chat at my office, yours, a coffee shop, park, or anywhere convenient.
For more reading:
The Silicon Valley Luxury Home Market (view a list of homes for sale, read more on criteria for location, amenities etc.)