It’s Not a Bubble – It’s a Balloon!

My 2009 San Mateo County Real Estate Prediction

In five years we’ll look back and say to ourselves: “I wish I bought more San Mateo County real estate in 2009.”

People Want to Live in San Mateo County

Face it, California is growing. People want to live here – particularly San Mateo County. There is a powerful ongoing migration from the less desirable areas such as the “rust belt” to the less harsh areas in the west and south. People will always chase job opportunities, comfort, convenience and perceived lifestyle improvements.

Real Estate Values Have Continued to Rise Over Time

The rise in real estate values can be tracked back for decades. Years ago, when an average home in California was about $10,000, many people said housing cannot continue to increase in value…no one could afford to pay more. Then when houses broke the $100,000 mark, the same statement was mimicked. And so on…and so on.

Do you know anyone who has said they should have bought more real estate in the 70’s or 80’s or 90’s? I’ll bet you have.

Time Makes Money in San Mateo Real Estate, Not Timing

Real estate is the classic long-term, illiquid investment. It’s time that makes money in real estate…not timing. The market is a balloon with a capacity limited only by job creation, disposable income and available land. People live where they work and companies will pay what it takes to fill the job.

Housing is a Buy and Hold Investment

Housing has never been designed to be a speculative investment. It’s a buy and hold asset whose essential purpose is providing shelter with tax benefits including the deductibility of mortgage interest and property tax. Its value is controlled by the same rules of supply and demand that any other asset is governed by. It is no accident…and certainly not serendipitous…that housing appreciates or depreciates. All real estate is cyclical. Real estate will increase in value, or decrease in value, or remain steady for a while. Then, it will change. There are quantitative and qualitative reasons why it does.

The Sky is Not Falling

Don’t fall into the mistake of believing that the sky is falling. Cycles are normal, natural and recurring. The market is what it is and it’s the only market we have. We have to deal with the realities of the marketplace. The reasons why one buys or sells a home are far more important than the market itself.

How Many Foreclosures are For Sale in San Mateo County Today?

In San Mateo County, the resurgence is already underway in the low and mid price ranges. Eager investors and people buying San Mateo County homes to live in are taking advantage of the most affordable housing market we’ve seen in 20 years. Sure, at least for while, we’ll continue to see defaults and foreclosures. However, foreclosure properties are a very small segment of the overall housing market. In San Mateo County, of the 1475 single family homes and condominiums currently listed for sale in the MLS, 172 are categorized as short sales and 78 are bank-owned homes (REOs). That is, by anyone’s yard stick, a very manageable inventory of distressed real estate.

Planning on Getting into the Market? Educate Yourself First

We put on several home buyer education courses to help San Mateo County home buyers educate themselves about the process. Our programs are all education based, non-salesy courses designed to give you time and money saving tips you can use in your upcoming San Mateo County home purchase. For a schedule of our upcoming courses, visit our Home Buyer Education Page.

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