San Mateo, California, March 4, 2008 - Everyone has read the latest headlines predicting the total collapse of the housing market. Potential buyers and investors nationwide are holding their breath and biding their time, waiting for the bottom to fall out so they can capitalize on the weakness in the market. Sellers are shell shocked and worried, how will their home sell now?
But if you are a potential buyer or seller in San Mateo County, you might want to reevaluate your strategy. As David Lereah made famous in his book of the same title, “All Real Estate is Local” and local buyers and sellers need to understand the intricacies of their own markets.
San Mateo County, California is a performance leader and it’s not an accident.
While it is true that the number of sales is off from past highs and the inventory of unsold homes is up slightly, industry analysts reported the January 2008 average sales price in San Mateo County was $1,206,153. When compared against an average sale of $1,109,303 for January 2007 and $1,081,979 for January 2006, it’s clear this housing market is still looking steady and strong.
The San Francisco Peninsula has some obvious advantages to surviving the recent downturn. The market here was never plagued by either over building nor is there a preponderance of sub-prime loans. These two factors alone have made San Mateo County the most solid housing market in California, if not the entire United States.
Let’s talk long term though; housing appreciates based upon two factors: job creation and housing supply. The greatest appreciation is found in markets where the numbers of jobs created exceeds the number of housing units being produced. San Mateo County is a text book example of this formula, but there is also more to the story.
The Peninsula has a strong history of positive and sometimes dramatically powerful appreciation dating back decades. A collection of unique characteristics are attributable to the county’s housing strength.
First, San Mateo County has an acute shortage of build-able land. By industry standards the county is effectively built out. Most of the new housing construction is “in-filling” (the phenomena where is builder finds a property with an old, worn-out structure, demolishes it and builds a bigger, better more valuable structure). This drives up the aggregate value of the neighborhood and increases the tax base.
Then, the county is locked in by well defined geographic constraints. The City of San Francisco to the north, the suburban sprawl of Silicon Valley on the south, the Pacific Ocean to the west and the Bay on the east provide no room to grow.
Add the best job market in America, driven by the capital-rich tech industry, and you can begin to see how San Mateo County attracts some of the world’s best talent (along with their solid paychecks).
Moreover, it’s an area loaded with entertainment, recreational and cultural amenities. It’s convenient to one of the great cities of the world, San Francisco, and near two phenomenal universities, Stanford and the University of California.
Now add a Mediterranean-type climate and it’s clear why San Mateo County will continue to prosper.
Media reports that indicate that “the real estate market” is collapsing are generalizations. Pockets of strength and stability exist and are recognizable. San Mateo County, California is clearly alive, well and poised for future appreciation. While it can’t be denied that consumer confidence is distinctly affected by media commentary, it’s important not to overlook the facts. San Mateo County, California, is still one of the best, and most stable, places to live, work and own a home in the US.
So, buyers, start looking. The best time to find a good deal is any time you are willing to take the time to find it. And, sellers, don’t forget to breath.
