- Silicon Valley reached $419 billion in property and business personal property assessments by January 2016, according to the Santa Clara County Assessor.
- Apple’s new campus accounted for $700 million in new construction and has an assessed value of $1.6 billion.
- Santa Clara County rents have risen 45 percent in the last four years, aiding an average monthly one-bedroom rent of $2,436 across the San Jose metro.
The tech mecca of the nation is having one of the strongest recoveries since the recession. Silicon Valley reached $419 billion in property and business personal property assessments by the beginning of 2016, according to the Santa Clara County Assessor.
The total assessed value represents a year-over-year increase of 7.9 percent in 2015, or $30.9 billion — nearly equal gains as 2014. In the past four years alone, growth surpassed the previous decade’s increase in the area.
“Silicon Valley’s strong economy has erased most of the losses in property values incurred during the ’Great Recession’,” County Assessor Larry Stone said in a statement. “That’s great news for all property owners, as the largest single asset that most people own is their home.
With 60 consecutive months of job increases, Santa Clara County’s unemployment rate is just 3.8 percent. In comparison, California’s employment rate is 5.4 percent, while the nationwide rate is at 5 percent. The July study showed the sixth month in a row that Santa Clara County’s unemployment was under 4 percent.
“Santa Clara County is once again leading the region, and the state,” Stone added.
Mountain View and Santa Clara had the highest assessment roll growth since 2012 at 11.27 and 12.52 percent, respectively. Cupertino, where Apple’s headquarters sit, showed 10.06 percent assessment roll growth.
Between 2009 and 2012, the assessment roll was only $27 billion due to value reduction in 136,000 properties. Today Silicon Valley’s economy is spurred by ownership changes, exemptions, new construction, Proposition 8 reduction rebounds and the California Consumer Price Index at 1.525 percent.
Property values in Silicon Valley
Given job and economic growth, the demand for multi-family and commercial real estate has skyrocketed in Santa Clara County. Almost half of the assessed value gain, equaling $16.6 billion, was caused by re-assessable changes in ownership, or resales.
Meanwhile, another $6.9 billion is from new construction. Looking back just six years ago, resales only accounted for $2.8 billion and new construction only $1 billion. The Valley certainly struggled back in 2010 but has seen extreme bounce back growth in less than 10 years.
Does the tech culture prefer buying?
Big-name tech brands that clutter the Santa Clara County landscape are choosing to buy properties rather than lease. Eighty-five percent of the $6.9 billion in new construction is attributed to commercial and industrial buildings and campuses.
Apple’s new campus accounted for $700 million in new construction and has an assessed value of $1.6 billion. Another big addition was Levi’s Stadium, home to the San Francisco 49ers, was assessed at $1.4 billion.
Meanwhile in San Jose, Samsung’s new 636,000 square foot headquarters was assessed at $311 million.
In residential and retail, Monticello Village boosted the assessment roll by $466 million. The Santa Clara complex is comprised of 825 apartment units and retail space.
More jobs, more housing demand
Citing the Silicon Valley Business Journal, the Santa Clara County Assessor says apartment rents have risen 45 percent in the last four years, aiding an average monthly one-bedroom rent of $2,436 across the San Jose metro. The metro also has 97.6 percent residential leasing occupancy, according to the report.
Less inventory and higher incomes helped to push the boom further: Santa Clara County’s median income is $115,000 per year.