This is the sixth installment in Inman’s “12 in ’21” hot neighborhoods series, which explores areas with both booming real estate markets and dense amenities. To read previous stories in the series, click here.
San Jose, California, hasn’t shied away from making headlines recently. The city that’s host to a number of big tech players like PayPal, Zoom and Adobe was named the No. 1 city for small businesses by Biz2Credit in early May. It was also the No. 1 metro where millennials made up the largest share of purchase mortgage requests, according to a study conducted in January by LendingTree.
In April, LendingTree also named San Jose the most competitive metro in the U.S. for homebuyers, based on financial criteria, like the average down payment percentage, share of homebuyers with credit scores above 720 and share of homebuyers who shop around for a mortgage prior to shopping for a house. In the Silicon Valley metro, 84 percent of buyers had a credit score of 720 or higher, and the average downpayment was about 23 percent.
In addition, at the end of April, the San Jose Planning Commission unanimously approved Google’s proposal to create an 80-acre, mixed-use campus just west of downtown, which stands to alter the city’s landscape significantly over the next few years.
The city has often been viewed as an alternative to other more congested or hectic California hubs nearby, like San Francisco and Palo Alto. Now with more robust work-from-home policies available and Google’s big plans for development, San Jose is quickly becoming even more attractive and exciting.
For similar reasons, neighborhoods within the city itself, like Willow Glen, are becoming increasingly popular because they are close to the new happenings on the horizon downtown, but also have plenty to offer on their own, including a bit more space. Properties in Willow Glen are becoming a hot commodity right now, and it’s not hard to see why.
What is Willow Glen?
Willow Glen is located just southwest of downtown San Jose. The established neighborhood is largely bordered by Interstate 280 to the north, Almaden Expressway to the east, Hillsdale/Camden Ave to the south, and a more irregular border to the west, roughly within the bounds of California State Route 17.
Willow Glen meets the border of San Jose’s downtown, but people in the area say it feels like its own distinct community.
“They have a very strong community organization where they all participate in holiday decorations, street parties and a whole host of things that are unique to that area,” Sandy Jamison of the Jamison Team at Tuscana Properties told Inman. “All the streets throughout the Willow Glen neighborhoods are lined with these humongous beautiful trees. Some of those neighborhoods and homes just look like storybook homes.”
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Willow Glen has its own mini downtown along Lincoln Avenue, which runs northwest to southeast through the neighborhood and helps make the area feel distinct from its neighbors.
The neighborhood has a population of about 78,500, according to ranking and review site Niche. By comparison, San Jose as a whole has a population of about 1 million, according to 2019 estimates from the U.S. Census Bureau.
Willow Glen real estate
As one of the city’s older neighborhoods that’s adapted with the times, Willow Glen has a diverse mix of housing stock. Homes listed in the area can range in age from the late 1800s to new construction, and are built in a variety of styles, including Victorians, Craftsmans, cottage bungalows and missions.
The neighborhood has plenty of mature trees and many lots are unusually large compared to other parts of San Jose — both factors that make it a highly desirable area.
It also has a mix of rentals and owned properties, but most properties in the neighborhood are single-family residences, with some of those rented out by owners.
There were about 70 total properties listed on Zillow in Willow Glen as of mid-May. The cheapest was a 480-square-foot manufactured home listed for about $114,000, and the priciest was a proposed three-estate redevelopment project listed for about $4.8 million.
But when Inman spoke in mid-May with Eric Boyenga, co-founder (along with wife Jenelle) of the Boyenga Real Estate Team at Compass, he said that according to his MLS, Willow Glen had a roughly 3-1 ratio of single-family homes under contract to single-family-home-active listings.
“That active to pending ratio, I’ve never seen anything like it,” Boyenga said. “It’s crazy.”
Data received from Zillow for the 95125 zip code, which largely overlaps with the Willow Glen neighborhood, shows steadily rising prices and recent bouts of low inventory. As of February 2021, the median sale price was up 7.7 percent year over year to about $1.43 million. Meanwhile, as recently as December 2020, the typical home value (a metric Zillow uses instead of median home values, which is an adjusted measure of home values) was up 8.5 percent year over year to $1.47 million.
More recent data from Homesnap shows that the average sales price was around $1.38 million as of mid-May.
Data from Redfin reveals that the last time the median sale price in the neighborhood was below $1 million was in February 2017 when the median sale price was $995,000.
According to Zillow’s data, inventory has actually rebounded a bit year over year within the last six months to modest positive growth (as of April, inventory is up about 20 percent year over year). However, back in July 2020, inventory was down about 12 percent year over year, and down 19 percent year over year in June 2020.
Redfin’s market report of Willow Glen dubs the neighborhood “Very Competitive” with a Redfin Compete Score of 87 out of 100 (100 being most competitive). The report further states that nearly 80 percent of homes sold in the area were sold above list price, which is up 13 percent from this time last year.
In addition, many homes receive multiple offers with some waiving contingencies, and as of April 2021, the average home goes pending within about 12 days. Home sales are also up about 200 percent year over year.
Boyenga noted that, prior to COVID, one factor keeping demand in Willow Glen in check was the commute times to large tech employers located in Palo Alto, like Apple, Google or Netflix. Although Palo Alto has always been pricier, people who lived closer to the tech hub at least didn’t have to deal with traffic or commutes. But now that many employers are offering those remote work options, it’s allowed neighborhoods like Willow Glen to become a viable option for a greater population of workers.
“[Remote work has] had a really unique effect on this Valley,” Boyenga said. “It’s driven people out farther, which has been really good and it’s taken pressure off some of the pricing in those ground zero areas. But these outlying areas have gone up.”
“[Willow Glen] was always undervalued,” Boyenga added. “I don’t know what true value is because that’s ever-changing, but I think it’s at least unlocking more of its value now.”
Willow Glen rents
Like many urban areas over the past year, Willow Glen has seen its ups and downs in the rental market. As of April 2021, the median price for a two-bedroom apartment was about $2,003, according to data from Zumper. That figure is down about 36 percent from a median of $3,135 the year before.
Rental data sent to Inman from Zillow shows that the typical rent in the 95125 zip code (across all types of units) was a bit higher at $2,969 as of April 2021. Prior to that, February 2021 was the first time since June 2019 that rents in the area hit below $3,000.
However, the average number of weekly available listings has also steadily declined since about November 2020. That month, there were an average of 14 available listings per week, according to Zumper, but by January 2021, that number was down to about 10 available listings per week. As of April 2021, it’s down to about 6 available listings per week.
Although it’s hard to determine a direct correlation, as news about Google’s planned village in downtown has ramped up over the last few months, it’s possible that news is already having an impact on the rental landscape in Willow Glen. There are more rental options in the neighborhood in northern parts that are closer to downtown. And it’s possible that people are trying to secure a more affordable lease in those parts before downtown explodes with hubbub surrounding Google’s new development, leading to fewer listings over the last several months.
Google’s proposal, however, does also include measures for 4,000 to 5,900 housing units, as well as land with space for 800 affordable housing units, which will ultimately open up more rental options nearby.
Willow Glen amenities
Agents that Inman spoke with for this story called out Willow Glen’s appeal for families because of factors like the community vibe, the neighborhood’s central location and its number of commercial options.
“If you’re a family and you’re thinking, ‘where should I buy?’ You obviously want to buy into that storybook neighborhood that has good schools and is close proximity to get anywhere,” Jamison said.
The community’s commitment to keeping the neighborhood in good shape, as well as offering plenty of community events also adds to its appeal. Jamison said that at Christmas, most of the neighborhood participates in a tradition of putting a small, decorated Christmas tree on their front lawn. Then at Halloween, different blocks of the neighborhood coordinate elaborate decorations — some neighbors even provide treat stations for adults too, with things like a wine tasting table.
A few businesses along Lincoln Avenue between Willow Street and Minnesota Avenue really anchor the neighborhood’s little downtown, like Bertucelli’s, a longstanding gourmet Italian deli. The Table, a restaurant established in the neighborhood in 2012, is also a point of pride for its acclaimed executive chef Jim Stump, who previously worked at well-known venues like San Francisco’s Fleur de Lys and Santa Clara’s Birk’s Restaurant. The strip is also home to several other businesses like a bike shop, coffee shops, banks, pharmacies and more.
Willow Glen is also home to a number of small parks, and a Saturday farmer’s market. The neighborhood is also adjacent to Los Gatos Creek Trail, a roughly 10-mile walking and biking trail that runs through Los Gatos, Campell and San Jose, and a handy escape to nature within the city. Additionally, the trail meets up with the 11-mile Guadalupe River Trail, which ultimately ends at the southern tip of the San Francisco Bay.
The buzz around Google
Although Google’s Downtown West development will not be in Willow Glen proper, its location adjacent to the neighborhood will make a significant impact on Willow Glen in coming years.
“It’s going to be Google-ville downtown soon,” Boyenga said. “It’s going to have a massive, profound effect on Willow Glen because of its proximity to [the] downtown corridor.”
The mixed-use development project, which is still a couple years away from completion, will include offices, housing, restaurants, shops, hotels, entertainment centers, and cultural hubs around the Diridon train station and the SAP Center, a concert and sports venue. The area is just north of Willow Glen, and the increased flow of people that is bound to arrive with the development will undoubtedly be felt in Willow Glen.
But in addition to the influx of business and people, property values in Willow Glen will also likely continue to appreciate.
“[The Google village is] still in the development phase, but … it’s probably about two years out, and we’ve seen kind of accelerated appreciation in Willow Glen and Rose Garden, and all the peripheral markets to that, in San Jose,” Brett Jennings, founder/broker of Real Estate Experts, told Inman.
“We saw a halo effect around that big development [of Apple Park in Cupertino five years ago] where prices hyper appreciated,” Jennings added. “Then on the backside of that, we got additional commercial and retail that comes in and fills in around it.”
Investors have already started looking to Willow Glen in the wake of Google’s announcement about moving to the area. In the summer of 2020, after selling a parcel to Google in the new development area, a trust led by Ilya Neizvestny purchased two properties — one commercial, one residential — in Willow Glen, The Mercury News reported.
Although the San Jose Planning Commission unanimously approved Google’s proposal at a virtual meeting at the end of April that many enthusiastic residents also attended, some individuals and groups have spoken out against the project.
The airport commission, for instance, voted against the proposal, saying Google’s plans aren’t in line with county noise and height regulations for buildings near San Jose’s airport. San Jose’s NHL team, the San Jose Sharks, have also been vocal about expressing their opposition to the plan because they believe it may negatively impact fans’ access to the arena and parking availability.
Some residents too are worried about gentrification and rising rents that may end up pushing people out of the area. Still, Google has committed $200 million of community benefits in their proposal, including $150 million for a community fund. The San Jose City Council held a final public hearing on the project at the end of May, which was also unanimously approved. The total project construction could take as long as 10 years to complete.