Episode 1: Silicon Valley & SF Real Estate with Eddie Oberoi

Welcome to Episode 1 of the Silicon Valley & SF Real Estate podcast! In this episode, Eddie Oberoi sits down with his partner Amrit Singh to talk about a Bay Area market that's moving in two very different directions. Luxury homes are flying off the shelf thanks to new IPO wealth, while buyers in many mid-range neighborhoods are holding back. So who's winning right now, buyers or sellers? Let's dive in.

Why Silicon Valley Still Matters

I say it all the time: if you want to be an actor, you go to Hollywood. If you want to be an artist, you go to New York or Paris. And if you want to be an entrepreneur, you need to be right here in Silicon Valley. The future is technology, and technology lives here. That's what drives our housing market, and that's what this podcast is about.

Our goal is simple: give you real knowledge. Over time, we'll bring in lenders, developers, site planners and other experts who can help you understand how the Bay Area, Silicon Valley and San Francisco markets are really doing.

A Tale of Two Markets

Right now, buyers are nervous, and that's true well beyond the Bay Area. But there's one small group that isn't: the new multi-millionaires created by the recent wave of tech IPOs.

High-end homes from San Francisco to Cupertino are flying off the shelf, and many have actually gone up in value over the past 12 months. In some parts of San Francisco, buyers are simply running out of mansions to choose from. Amrit pointed out that some high-end segments are showing only about a month and a half of inventory, something we rarely see.

On the other side, places like Morgan Hill, Pleasanton, San Ramon, Danville and Blackhawk Country Club are struggling. In some cases, values there have dropped 10%, 20%, even 30%.

Look at the Pocket, Not Just the City

City-wide numbers only tell part of the story. San Jose overall may have three to four months of supply, but certain pockets behave completely differently. Take Silver Creek Valley Country Club: when a home with views comes on the market, it often gets multiple offers, because there's a specific buyer for that kind of property.

We see the opposite too. On one West San Jose street, a home sold for $2.5 million about five months ago. Now we have a listing on that same street, and buyers are hesitating. There's a buyer for every home, but in this market you have to go out and find them.

Who Wins in Each Kind of Market

At the end of the day, at the right price, anything will sell. Here's how I explain it to clients:

• In a seller's market, the most motivated buyer wins. A home listed at $2 million gets 10 offers, and whoever offers $2.2 or $2.3 million gets it.
• In a buyer's market, the most aggressive seller wins. Homes are sitting at $2 million, and one seller decides to sell at $1.7 or $1.8 million. That sale sets the new value for the neighborhood.

You may believe your home is worth $2 million, but if your neighbor sells for $1.7 million, that's now the benchmark. And you can't blame the neighbor. Someone going through a divorce, a job loss or a move out of the country often has no choice. That's exactly how prices fell in 2008 and 2009. Unlike the stock market, real estate moves slowly, so the shifts take time to show up.

So, Is It a Buyer's Market?

It depends on where you're looking. If you want a mansion in San Francisco or Atherton, expect multiple offers. If you're shopping in Newark, East San Jose or Danville in the $1 million to $2 million range, you have options.

Sellers: Condition and Views Make the Difference

Even in slower areas, the right home still sparks competition. We recently had buyers in Hayward face multiple offers on a home with great views. In Pleasanton, where inventory is high, another couple we worked with competed on a nicely done, almost brand-new single-story home with views that was priced right.

Meanwhile, on that same Hayward street, a home with the same views but no updates is still sitting on the market.

In nearly three decades, I've seen seller's markets where homes falling apart drew non-contingent offers $200,000 over asking. But in a buyer's market, a dated home or one on a busy road takes a real beating, sometimes 20% to 30% less. Why would a buyer choose it over something turnkey with views? If you're selling right now, prepare and present your home well.

AI Money Is Reshaping Demand

The Bay Area isn't one market. San Francisco, San Mateo (the Peninsula), Santa Clara, Alameda and Contra Costa counties, plus the outskirts like San Joaquin and Sonoma, each attract different buyers.

As Amrit put it, much of the money flowing into the region is going toward AI: chipmakers, AI software, companies building agents. Despite the headlines about layoffs, many of these companies are hiring and paying very well. That's fueling demand in the cities where they're based, and in places like San Francisco and Marin County where high earners want to live.

I've lived in the Bay Area since 1997. Longtime residents remember when this area was farms and fields. Palo Alto and Los Altos didn't appreciate wildly 70 years ago. They took off because of the tech job market.

The H-1B Factor and Buyer Confidence

For the most part, a typical Bay Area buyer is an engineer, and many engineers here come from India or China, often on H-1B visas. Whatever your view on the political climate, what matters for the market is consumer confidence, and right now it's shaky for many H-1B holders.

Two or three years ago, these buyers were writing offers $100,000 over list. Today, we estimate a good 50% to 60% of them have stepped back. Their concern is reasonable: commit to a $10,000-a-month mortgage, then get laid off and have to move back home, and you may only be able to rent the house for $5,000 to $6,000. That's a monthly gap of around $4,000 that adds up year after year.

Amrit added another angle: some H-1B holders who already moved back still own homes here with low interest rates. When those homes don't sell at their asking price, owners often hold or rent them out, which keeps inventory elevated.

We're also seeing many buyers who don't want to sell their stocks to fund a down payment. Some lenders, Wells Fargo among them, offer programs that let you borrow against an investment portfolio, so you can use it toward a purchase without selling. Many people don't know this option exists, so ask your lender.

Who Should Sell Right Now?

If you're upgrading or downsizing, selling can make a lot of sense. If your $2 million home is now worth $1.7 million, that $5 million home you want may now be $4.5 million. It's often a wash, or better.

We recently helped a client who wanted a single-story home. She sold her two-story for $4 million (it might have fetched $5 million at the peak), then bought a single-family home for $2.7 million that would likely have sold for $3.5 million before. She came out ahead on the move.

If you're not making a move and simply want peak pricing, it may make sense to wait. If your neighbor is selling at $1.7 or $1.8 million and you're set on $2 million, the market won't meet you there. A slightly bigger yard or nicer finishes matter, but a buyer can often buy the cheaper house, spend $100,000 on their own style and still come out ahead. Put yourself in the buyer's shoes: would you pay more? You can't have it both ways.

Mortgage Rates: Marry the House, Date the Rate

It's a bit of a cliché, but it's true. Say you're a first-time buyer looking at a $1.3 million single-family home in Newark. At around 7%, the payment is hefty. But here's the question: would you rather pay 7% on $1.3 million, or 4% on $1.6 million?

When rates drop, prices tend to rise. Buying now at a higher rate and refinancing later can mean saving hundreds of thousands on the purchase price.

A few other things to keep in mind:

• Buy for the long term. If you plan to live in a home for only two or three years, keep renting. Buying makes sense if you'll stay ten years or more.
• Consider the tax picture. Rent gives you no write-off, while mortgage interest may be deductible. In my experience, $5,000 a month in rent and a $7,000 mortgage payment can end up closer than they look. Talk to your CPA about your situation.
• Location drives long-term value. Areas that lost their main industry, like parts of Michigan, never fully recovered. Silicon Valley's economy is built on technology, and that's not going anywhere.

What About AI and Jobs?

Amrit asked a fair question: if AI means a team of ten becomes a team of five, does that weaken housing demand? It's worth watching. But so far, we're not seeing the massive layoffs some predicted. When the internet arrived, people said everyone would stop buying cars and phones in person, and that didn't happen. Things change and we all have to pivot, but everyone still needs a place to live.

How We Work With Clients

Our approach is to guide and educate, then step back. We show you the home, the reports and our honest recommendation, and the decision is yours. Reaching out to us never obligates you to buy or sell.

Experience matters, especially in a market like this. Amrit shared a story about a homeowner in Fremont whose house had sat for three months under a seven-month listing agreement, with no staging and no open houses. That's the kind of situation we want to help people avoid.

Why I Love This Work

I started in real estate in 1999. Honestly, at first I was just trying to pay off student loans. But over almost three decades, talking with 40 to 50 people a day, I've spoken with close to half a million people. That changes you, in a good way.

Just when I think I've seen it all, something like the pandemic comes along, or a market like today's where luxury homes sell instantly while everyday buyers struggle. I wake up every day wondering who I'll meet and what I'll learn. When you love what you do, you never work a day in your life.