A Luxury real estate Market

Silicon valley the technological paradise of the world is turning into a cash cow for real estate
investments. According to a recent
commercial real estate news, three out of
five luxury markets in US are in the heart of
Silicon Valley- Woodside,ortola
Valley,!ills"orough all in california. #he
scales used were annuali$ed sales in units
and volume of luxury homes as well as
median and average sales price gains.
Renting over Purchase
#he national vacancy rate for apartments decreased from % percent to &.' percent from ())* to
()'+, At the same time, the average price of an existing U.S. !ouse has risen a"out '& percent,
according to commercial real estate data provided "y ,eis -nc. to a newspaper report. eople are
discouraged to invest in !ouses as a effect of housing market disaster of ()).. A "urden of
foreclosures forced many people to move out of their homes and into apartment leases. /n the other
side, construction of apartments was uphold until the last few years "ecause many "uilders couldn0t
get loans during the credit crisis.-n certain places, this led to lease and a rise in rents. #his was seen
as opportunity for the landlords to increase rents in many markets.
Technology Boon: Locus Point
1rokers say that it0s not 2ust tech founders who are scooping up homes in Silicon Valley. 1ankers,
venture capitalists, hedge funders and scores of other finance types who feed off the tech industry
are also flocking to the Valley. 3oreign "uyers are also drifting in, mainly from 4hina. -ndeed, there
is such a shortage of homes to sell in the Valley that "idding wars have "ecome fast and furious./f
course, if the tech "oom starts to fi$$le, so would the Silicon Valley real estate market. 1ut for now,
even modest homes in the area have "ecome real estate gold.
Hot places or irst time !uyers
#exas metro markets also ranked high for first-time "uyers, even though those markets are very hot
right now, and home prices are rising at a faster pace than the national average. #he positives for
markets like !ouston and 5allas are that there is strong employment growth and plenty of "uilda"le
land. 6ew construction would "e an opportunity for first-time "uyers, whereas the premium would
"e much higher in states like 4alifornia, where there is little space to increase supply.