State of the San Mateo Housing Market

By Raymond Stoklosa · May 30th, 2008

As May comes to a close, let’s take a look at the current state of the San Mateo County, California, real estate market.

While the media continues to depict the Mid-Peninsula (and rest of the U.S.) as a faltering market, the stats show a different story. San Mateo County saw 493 single family homes placed under contract (aka pending sales) in April 2008. This represents a significant increase over January’s 273 pending sales and it is virtually the same as the 500 pending sales in April 2007 — but dive into the data even further and you find a more interesting story.

San Mateo real estate Pending Sales

By segmenting the data, you can see that San Mateo County has essentially two distinctly different housing markets.

In one market basket we have homes that were purchased near the peak of the market in 2005 & early 2006 with highly leveraged financing and apparent flaws – poor location, transitioning neighborhood or other adverse conditions. I call these the “poor performers” and they have taken the greatest hit – losing as much as 25% in value since August 2007.

In the other market basket, we find the “prime properties” – well located single family homes in well performing schools districts, and stable neighborhoods with a reasonable degree of uniformity. These property values have maintained and trended upward, showing their durability.

Looking even closer at the prime properties, we can isolate winning neighborhoods like the border area of the San Mateo – Santa Clara County line, where demand remains relatively strong and the market continues to report superior performance and record high pricing.

Looking closer at the poor performers, we see that it is the most affordable and least expensive housing neighborhoods that have been hit hardest. It will be these locations that offer the best profit opportunities for the long term home buyer/owner.

Which type of neighborhood are you living in or looking to buy in? Take a quick look at Rebecca’s post from Wednesday and use Market SnapShot to find out.

The early signs indicate a change for the better across the county for most price ranges and locations. Certainly, the improvement will be gradual, but I predict that by 2013 many people will say “I wish I bought a home in 2008.”

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