The heart of the high-tech industry in Silicon Valley, the home of tech giants like Yahoo!, Juniper Networks, and AMD, and the keeper of a clean, suburban setting boasting outstanding schools and prize-winning parks—this is Sunnyvale, home to over 140,000 residents living in one of the safest and most innovative cities in Silicon Valley.
No wonder, then, that the median price of Sunnyvale single-family homes has risen by over 14 percent per year in each of the last three years. A unique combination of fundamental economic drivers contributes to this astounding appreciation and continues to positively impact Sunnyvale real estate. Here are five reasons that make Sunnyvale a prime choice for homebuyers.
Town Center Development
After nearly half a decade of litigation, the 36-acre Sunnyvale Town Center project is finally moving forward. Originally designed to include nearly 300 residential units, along with retail, office, and movie theater space, the project was put on hold by several years of lawsuits. However, in August 2015, the California Supreme Court ended the litigation, and in December 2015, Sunnyvale approved the purchase of the property by a team of experienced developers. Once development is complete, the Town Center will be a major asset to Sunnyvale’s downtown neighborhood.
Top Employment Growth
Sunnyvale’s prime location in the center of Silicon Valley makes it a home of choice for employers. The U.S. Bureau of Labor Statistics recently ranked the San Jose- Sunnyvale-Santa Clara metropolitan area as having the highest employment growth in the nation, with the number of employees increasing by over 5.2 percent between January 2014 and January 2015. This corresponds to over 50,000 new employees in the area, all with housing needs. Amenities like the downtown area and proximity to public transportation make Sunnyvale exceptionally attractive to this growing professional population.
Increasing Commute Times
Given this outstanding job growth, Bay Area commute times continue to grow longer. According to the Metropolitan Transportation Commission, congestion has increased by nearly 40 percent over the last five years. As people value their time increasingly more, they will seek to move closer to their places of work. With its central location and close proximity to major employers including Apple, Lockheed Martin, and Google, Sunnyvale is a natural choice for those seeking to reduce commute times.
Increasing Cost of Rent
The increasing number of jobs and employees in Sunnyvale and the surrounding areas of Silicon Valley has also significantly increased demand for rental housing. The average rental price of a one-bedroom apartment has sharply risen from $1,352 in 2010 to $2,477 in 2015, an 83 percent increase over five years. With steep increases expected to continue and mortgage rates at historic lows, a growing number of renters will ask themselves why they are not creating equity instead. This will serve as a continuing source of housing demand.
The quality of local public schools has a very positive effect on property values. Sunnyvale is endowed with excellent schools, including California Distinguished Schools such as Cumberland Elementary. Even schools that are not quite at the benchmark API score of 800 yet are showing strong and consistent upward trends. Meanwhile, properties assigned to top-scoring Cupertino schools continue to show extremely strong appreciation. For example, Sunnyvale homes assigned to Stocklmeir Elementary (API 974) showed average yearly appreciation of 17.6 percent between 2012 and 2015.
With its ideal combination of exciting new development, strong continuing economic growth, and excellent outlook for local public education, Sunnyvale is well-poised to continue showing strong appreciation. This will be especially true in areas close to top-scoring schools and amenities like transportation and downtown. With these strong advantages in its favor, Sunnyvale will continue to thrive as an attractive and exciting market for homebuyers.