Serenity, views, privacy have always been highly sought after characteristics in real estate and continue to command premiums. In the mid-Peninsula, I predicted a trend 5+ years that neighborhoods close to downtown areas of shopping, restaurants and public/private transportation will see above average appreciation as buyers are attracted to areas that require less driving. As the Bay Area economy booms, we see negative impacts to the 101 and 280 freeway traffic and bridge backups; rush house seems to start earlier and earlier. In particular, neighborhoods East of El Camino Real and West of 101 freeway are seeing a huge demand surge of buyers who want to be in close proximity to amenities. Examples of neighborhoods include Mateo/Glendale Village in San Mateo, and Clearfield Park around Laureola Park in San Carlos, are good examples of HOT, HOT neighborhoods in these sub-markets.
You may see on some listings that tout the Walk Score. The Walk Score is calculated by a company, which factors in the “walkability” to amenities such as businesses, parks, theaters, schools, restaurants, retail, transportation and other common destinations. The Walk Score output can be interpreted as:
Generally, 90+ Walk score are in high-density cities such as San Francisco. In suburban cities, neighborhoods scoring in the 50-80 ranges are generally considered in prime areas near amenities highly attractive to many of today’s homebuyers. For example, I had a great listing in San Mateo Village recently that was just blocks away from the Caltrain station, Hillsdale Mall (undergoing a major expansion upgrade), Whole Foods, Franklin Templeton headquarters, Bay Meadows, 101/92 freeways. Based on close to 200 groups attending the open houses, many buyers reviewing disclosures, and the significant number of offers on the house driving price 22% higher than list, the feedback from buyers (besides the beautiful house itself) was the extremely convenient location close to everything.
San Mateo/Glendale Village Comparison to Areas W. of El Camino Real
|900 to 1500 SF||900 to 1500 SF|
|1/1-5/31||#||W. ECR San Mateo||#||San Mateo Village|
We know every SF Bay property has appreciated significantly in the past 5+ years. If you purchased a property, you did well. “The market is hot”. What constitutes whether a particular neighborhood is “hotter than another”? One gauge might be the percentage appreciation over time relative to the broader market and did it appreciate higher than average. For example, let’s take the aforementioned San Mateo/Glendale Village (“The Village”). In 2013, for a Single Family Residence (“SFR”) between 900-1500 square feet from January 1 to May 31, 2013, the average $/square feet was $641.60; in 2018 from January 1 to May 31, the average was $1,290.75. Compared this with the average $694.41 $/square feet for all SFR in San Mateo West of El Camino Real in 2012 and $1,314.77 $/square feet in 2018. The Village appreciated an incredible 101% in 6 years, while West San Mateo appreciated still a very high 89%. The Village seems to have appreciated at a higher percentage than the historically popular West San Mateo.
Key characteristics in the Bay Area affecting this trend towards living in locations close to things include:
- Traffic seems to get worse and worse. A recent article suggests that sections of 101 freeway show traffic at 80% worse in 2017 than in 2010. Don’t know how they measured it, but it seems directionally correct from my daily experiences. People already spend quite a bit of time commuting to and from work. When they are home, people don’t want to spend more time in their cars.
- Being close to public transportation such as Caltrain, BART, technology shuttle buses, and Samtrans provides attractive commuting alternatives.
- Those that are able to purchase in this expensive area tend to work in demanding jobs. Many of those who chose to live in SF Bay want to be part of the action.
That doesn’t mean everyone wants to be close to a downtown area. Many still prefer being away from everything when they get home. In the current low supply, market, it seems every neighborhood sees strong demand. As I have written about in past blog posts, purchasing real estate isn’t just about financial considerations, but a lifestyle.
As always, anyone want to talk real estate on any topic, feel free to reach out to me at firstname.lastname@example.org or 650-504-7588. Please “like” my FB real estate page at www.facebook.com/PeterTaoProperties; it’ll be focused more on articles rather than just marketing my listings.