By Nupur Kudapkar
Silicon Valley is one of the most expensive places to live, have you ever wondered why? As the area’s job market grows, so does the population, which leads to housing demand. People in Silicon Valley simply can not get a house under a million dollars, the average is $1.6 million. Silicon Valley is a global hub for technology and innovation which as one would expect attracts a huge population. So how has the pandemic influenced inflation? The epidemic produced a one-of-a-kind environment in the real estate market, and the relaxation of shelter-in-place rules in the Bay Area on May 5 resulted in an increase in buyer demand. This drove up home values to new highs and rekindled bidding wars, particularly in high-demand districts. This trend is anticipated to continue in 2021, according to Danielle Hale, the chief economist at Realtor.com. Sales are expected to climb by 7%, but prices will rise by 5.7 percent on top of the already inflated prices witnessed in 2020. While the popularity and limited supply will persist to boost sales and prices, the rate will be substantially slower than in 2020 (Hadar Guibara).
As the graph shows, the rates have fluctuated over the past 20 years, the ideal time to have bought a house was in 2008-2012 as the rates were decreasing quite a bit but now as the years go on and on, the rates have started to go back up as expected.