"Google effect" poised to impact real estate in San Jose neighborhood

- You may be surprised to find out you can buy a home for less than $1 million dollars in the upscale Rose Garden area of San Jose.

Until you find out that home is 650 square feet and being sold for more than $800,000 dollars.

"There's a lot of investors. A lot of investors looking at it as a possible rental opportunity," said listing agent Ryan Nunnally. "They all kept saying 'It should hold its value, Google's coming in'."

The Keller Williams realtor says he's seen first-hand the "Google Effect" ever since San Jose in June announced the high-tech giant wants to develop a transit-oriented complex around Diridon Station.

City officials say the project proposes at least 6-million square feet of office space to bring up to 20,000 jobs.

Nunnally recalls before the announcement, a loft condo in Downtown San Jose lingered on the market for a month and a half before his client scooped it up for less than the asking price.

But it was a much different story for an almost identical condo after the Google news.

"Some 5 weeks later, one closes a couple doors down for $65,000 higher than what mine just sold for and sold immediately," said Nunnally.

The current housing market has some homeowners shaking their heads and considering changing plans.

"I think it's a little crazy. I think it's insane," says Tracy Liu.

The mother of a one says she and her husband thought about selling their home near Santa Clara University but after the Google announcement decided to wait.

"Our prices have gone up already. I think they're probably going to go up again so we were thinking about moving. Now we kind of changed our minds a little bit," says Liu.

"Folks don't want to drive 60-90 minutes each direction to go to their jobs anymore," said Rick Smith, the President of the Santa Clara County Association of Realtors.

Smith says if Google comes there will be a ripple effect.

"I'd say Rose Garden, Willow Glen, Santa Clara, Downtown San Jose. There's a lot of places that are going to benefit financially from the residential increase in prices because they're so close to where folks work," said Smith.

Smith says Google's home base, Mountain View, in the last year saw the average sale price go up $254,000.

"I get calls almost daily. I have someone I'm writing an offer for today for a duplex in San Jose. They brought up Google," said Nunnally. "I always tell people it's proposed. It's not certain. But it has had an impact. A significant impact."

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