IDEAS home Printed from
   My bibliography  Save this paper

Factors Driving the Silicon Valley Housing Market in 2007


  • Kroll, Cynthia A.


With Silicon Valley employment still well below the 2000 peak, and rising foreclosures nationwide, this article examines whether the area's housing market is vulnerable to a correction. Recent statistics suggest that several factors have helped support home prices, but that there are uncertainties going forward. Although the San Jose MSA has regained less than one-fifth of jobs lost since 2000, there are now strong signs that employment is in recovery, with job growth occurring in diverse sectors. The San Jose MSA's wage and salary jobs now outstrip the area's resident labor force, suggesting that there may be a pent-up demand for housing from commuters in surrounding communities. This demand may be one of several factors that kept the region's housing prices stable immediately following the dot-com bust, and allowed price increases to follow in the absence of full employment recovery. Other factors include low interest rates; a mobile younger workforce, whose departure affected rent more than home prices; and a shift in investment from stocks to homeownership following the dot-com bust. In the 2007 housing market slowdown, the greatest impact nationwide has been at the low end of the market, while Silicon Valley's expensive housing market has a foreclosure rate well below the statewide average. Nevertheless, there is some evidence of softening. The number of home sales has decreased. The same-home sales price index was down slightly first quarter, as was the median price for new homes. The median price of existing homes is rising, but in part because of the drop off in sales at the low end and in part due to sellers taking homes off the market rather than lowering prices. The paper concludes with several possible scenarios for Silicon Valley home prices going forward--a two-tiered market with price increases in some segments and declines in others; price stabilization across home-types; or a significant recession-induced price decline.

Suggested Citation

  • Kroll, Cynthia A., 2007. "Factors Driving the Silicon Valley Housing Market in 2007," Fisher Center for Real Estate & Urban Economics, Research Reports qt2qx595p1, Fisher Center for Real Estate & Urban Economics, UC Berkeley.
  • Handle: RePEc:cdl:fisher:qt2qx595p1

    Download full text from publisher

    File URL:;origin=repeccitec
    Download Restriction: no

    More about this item


    Housing Market; Home Prices; Silicon Valley;


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:fisher:qt2qx595p1. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.