County Realtors are sending a simple message to potential home buyers not a part of the local high-tech, life sciences or other lucrative local job markets — good luck.
“If you are an average Joe, it’s very difficult for you to buy a house,” said Realtor Jeff LaMont. “If you are a school teacher or an auto mechanic, you are kind of screwed. It’s really, really tough.”
The bleak sentiment is borne out through the most recent figures offered by the San Mateo County Association of Realtors, which shows the county’s median home sale price last month reached $1.8 million.
The most recent figure marks a jump of about $300,000 in median home sale price from this time last year, and about $900,000 from five years ago, when the county’s median home sales price in April was $915,000.
The county’s median sales price ticked up from $1.6 million last month, when the national median sales price of a home was $337,000, according to the U.S. Census Bureau.
Meanwhile, the city of San Mateo’s median sales price sat in April a little below the county average at $1.6 million, while neighboring cities such as Belmont and Foster City floated closer to the $2 million mark, at $1.8 and $1.9 million respectively.
And what type of a down payment does it require to make such an acquisition? While conventional wisdom would suggest that a figure around 10 percent may be adequate, Realtor Michael Verdone said the local market frequently demands twice that, potentially pushing upfront costs to the ballpark of $350,000.
Access to such a sizable sum does not guarantee a sale either, noted Verdone, who said it is not uncommon for some shoppers to put up half of their down payment, or even close a deal with cash.
Verdone, who is headquartered in Redwood City but also works as an official with the National Association of Realtors, said he sees little relief on the horizon.
“As long as the population continues to grow along with the job centers, I don’t really see this changing,” said Verdone, who has worked in the local real estate market for more than four decades.
Real estate online database Zillow is bullish on the value of local properties as well, as it projects home values to climb to the tune of 8 percent over the coming year. The website claims the county’s current median home value is $1.3 million, marking a more than 19 percent jump over the past year.
Verdone said he considers the strength of the local home market unprecedented, even by the standards set around the turn of the century when home values spiked precipitously.
LaMont, who has roughly 30 years experience selling homes in San Mateo County, shared a similar sentiment.
“This is the strongest market I’ve ever seen,” he said.
By tracking local median sales trends, figures support such a belief as April’s prices are higher than any point since 1998, according to county and SAMCAR online databases.
Buyers seeking relief from the constant price increases should advocate for more development, as the most likely mechanism for pushing down prices is more building, agreed LaMont and Verdone.
“As long as all these communities are not building enough units to accommodate demand, we will have this imbalance of supply,” said LaMont.
Verdone concurred, citing Redwood City as a potential model among local cities seeking to build sufficient housing near central shopping districts and transit corridors.
But despite the recent influx of building in Redwood City and surrounding cities, Verdone said there is more work that needs to be done for the market to take notice.
“There is a lot more inventory starting to come onto the market, but it is nowhere near what it should be,” he said.
To facilitate more construction, Verdone said he as worked as a conduit through his association with local and national Realtor groups to advocate for loosened development regulations.
He pointed to recent legislative efforts such as those floated by state Sen. Scott Wiener, D-San Francisco, alongside separate pushes to allow more accessory dwelling units, as a potentially effective means of improving the local housing stock.
But he said more pressure still needs to be applied by residents and community members on local elected officials to approve more building.
“It’s up to the cities to continue building housing, because we have a housing shortage,” he said.
LaMont agreed, and pointed to recent approvals of large developments near the Millbrae train station as a mark of a successful push for more housing locally.
But with an understanding there is a lag between building permit issuance and the new units becoming available, he suggested the time bridging the gap before supply begins to meet demand will likely be painful for most.
“If you are not working in high tech or biotech or have family money or are not an entrepreneur whose business is doing really, really well — it’s really hard to buy here,” he said.
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