Los Altos vs. Santa Clara County Plotted
Prior to 2012, Los Altos real estate trends diverged significantly from Santa Clara County real estate trends. After 2012, the two trends paralleled fairly closely.

Santa Clara County vs. Silicon Valley Plotted
Santa Clara County house price trends are nearly identical to Silicon Valley house price trends. Comparing Los Altos to Santa Clara County is nearly identical to comparing Los Altos to Silicon Valley.

Factors For Change
Local Wealth Changes
The dot-com boom of 2000 significantly increased the wealth of many Silicon Valley residents, increasing the demand for luxury Silicon Valley homes. The dramatic increase affected Los Altos house prices, as shown in the first graph.
Nationwide Economy Changes
In 2008, the subprime mortgage crisis caused a major disruption in jobs, mortgages, and ownership. In the years before 2008, nationwide government policies were created to expand homeownership to less wealthy people. This had driven up the prices of homes. Inadequate regulation of the policies led to a dramatic mortgage crisis that drove home prices down. This affected areas with homes that had less equity more than areas where the owners could afford to just hold onto their homes. Los Altos home prices were less affected than lower-priced San Jose.
Government Housing Regulations
Changes in laws can have long-lasting effects. Decades ago, laws were changed so that people with mental health issues were less likely to be indefinitely confined to mental hospitals. Some of these people had difficulties working and affording to pay for housing. In addition increases in illegal drug use led other people to be unable to afford housing. The homeless population has grown and is now considered a major problem requiring government intervention.
The state of California government has responded to this need by mandating housing goals and regulations for cities that are intended to create more low-cost housing through construction. This has led to changes in what type of housing is built beyond what builders expect to be profitable.
The current policies will not solve the “homeless problem” on their own. Already, we are seeing laws beginning to be enacted requiring homeless people to accept government-provided housing or to suffer penalties.