San Carlos Market May Finally Be Turning Around

bobbredel Featured , San Carlos Real Estate Leave a Comment

Spring 2012

Spring 2012, may finally produce some housing numbers in the positive direction for San Carlos. After more than 3 years of a receding market, San Carlos is finally poised to turn itself around, and here’s why:

Welcome Back Sand Hill Road

For those of you that don’t know, Sand Hill Road in Menlo Park is a world renowned leader for venture capital firms.  During the heyday of Silicon Valley and the dot com madness, the venture firms on Sand Hill Road were largely responsible for pumping billions of dollars into startups. With the mortgage meltdown and recession of 2008, the purse strings on the investment money from many of those firms instantly dried up and the drought has remained in place for the past several years. Many of those firms have now started to invest money in startups once again.  Startups with money hire, and it’s already happening.  In fact, it’s happening on a level such that many who sought refuge in most established companies like Oracle, Cisco, Amgen and others during the downturn in the economy, have now left to pursue jobs at startups.

My first job out of law school was as an attorney in the corporate startup division of Wilson Sonsini Goodrich & Rosati in Palo Alto. At the time, WSGR had nearly 750 attorneys working on all facets of technology companies in Silicon Valley. We also worked hand in hand with many of the firms on Sand Hill Road.  Over the years, I have kept in contact not only with friends still at WSGR, but at many of the venture capital firms on Sand Hill Road.  They are all saying the same thing, and that is they are expecting 2012 to be a bit of a hiring surge as more and more startups gain funding. Any type of hiring surge can only mean positive things for the surrounding housing markets with good schools.  San Carlos fits the mold.

The majority of San Carlos buyers in the market right now are smart, educated, tech-savvy and motivated……in other words, exactly who startups hire. These buyers are looking for a town that has an emphasis on education, is progressive, but can provide a respite from the craziness of startup life.  San Carlos is an ideal match.

Facebook

It appears that Facebook will now move forward with an IPO.  That IPO will instantly produce 1,000 new millionaires.  Currently, there are not 1,000 homes for sale on the entire peninsula.

Money Is Cheap

A thirty year fixed mortgage can still be had for under 4.5%.  In fact, rates are so low that some who could put down more than 20% and reduce their payments are choosing not to because it makes more sense to borrow money at 4.5% and invest the remainder of the down payment elsewhere at a higher return that 4.5%.  That is an unheard of scenario when it comes to the financing of a primary residence.

Inventory Is Low

If there is one thing buyers (and agents) hate, it’s low inventory.  It was the single biggest story of our San Carlos market in 2010 and 2011.  Inventory levels will probably be a little better than the two previous years, but they will not be enough to satisfy the demand.  Combined with the other factors above, lower inventory should aide in the recovery of the San Carlos market.

 

 

 

About the Author

bobbredel