San Carlos Real Estate Surge Is Affecting Many, Less Obvious Groups
Rolling into its 35th consecutive month of a surge in housing prices, the San Carlos real estate market has hit stratospheric heights. The vast majority of attention has been focused on the frustration of buyers and the gains of sellers. However, there are other groups that are being affected or will be affected in the very near future. Here is a look at those groups:
Groups Negatively Affected
Our Kids. The truth of the matter is that our kids will likely not be able to afford San Carlos or anywhere nearby. It is a tough reality and one that I hear constantly at open houses. “It’s a shame. My kids will never be able to live close to the place they grew up,” said a woman this weekend at one of my open houses. I’ve heard it countless times over the last year and half, and for most of us, it’s true. San Carlos has undergone a massive transformation in the last 30 years. Keep in mind that this was a town closing elementary schools 30 years ago because there were not enough kids in town to support them. The money being poured into San Carlos right now is taking property values to levels that would have been thought to be unimaginable just a few years ago. The area as a whole has been hit by waves of massive relocation and wealth over the last twenty years, starting with Silicon Valley, biotech and now social media companies. It is a relentless barrage of extreme wealth pelting a very small area. If the industry surrounding this area wasn’t enough to justify the prices, add to it the fact that many people believe this to be the best place on earth to live….and you have the perfect storm.
Schools. The San Carlos School District does recognize the transformation and is doing everything they can to ease the capacity at schools sites. More families moving to San Carlos equals the need for more schools space. The SCSD has done a very good job at trying to get in front of the problem by gaining funds to improve current campuses and think creatively with ideas such as the land swap with the City. Remember that outside of bond measures, our property taxes do not directly benefit our schools as is the case in some other nearby towns such as Palo Alto. Escalating home values and demand for San Carlos by families has only served to apply more pressure to an already taxed school district and its resources.
Public Service. Imagine trying to be a teacher, a counselor, a police office or any other job which requires one to dedicate their life to the greater good and taking home a paycheck that instantly rules you out of any thought of being able to buy a home nearby. The community as a whole will suffer as San Carlos and surrounding communities will lose some ability to attract those who are truly dedicated to worthwhile public service. While there are a few programs aimed at helping to ease the home ownership burden for some of these groups, the unfortunate truth is that the big picture is one that does not offer much hope for those looking to make this their long term home.
Groups Positively Affected
Contractors. Our surging market has created a massive reversal of fortune for many San Carlos contractors when compared against their outlook just a few years ago. Many San Carlos buyers looking to move up in the market have simply given up due to market conditions and low inventory. Instead, they have decided to remodel their existing home. Many contractors are booked months or even a year in advance right now. Permit applications for home additions and remodels are up substantially.
Private Schools. Surging prices in San Carlos and Belmont have forced some buyers to look in towns on the peninsula which do not have schools which attract buyers like San Carlos and Belmont do. Many are going to these towns where the affordability is better and simply putting their children in private schools. Many of the local private schools in the mid-peninsula have seen a sharp rise in applications over the past three years.
City of San Carlos. After some very difficult decisions with Police and Fire, San Carlos is back to operating in the black. A robust real estate market in San Carlos means a good local economy. This means higher sales tax dollars, more user fees, more permitting fees, greater revenue.
San Carlos is in uncharted waters right now. A lengthy, searing hot real estate market is going to have some long lasting effects on San Carlos in general. Clearly, there are some groups who will benefit and others who will struggle. Just how those changes affect the character of San Carlos will need to wait to be seen.
6 Comments
That’s why our dedicated public school teachers deserve a raise!
Shocking that Realtors didn’t make the list of Groups Positively Affected…..?
Hi SC Resident,
Thanks for your comment. I can understand how it may seem that way. The truth is that realtors do their best and are most positively affected when the market is healthy and balanced….not completely lopsided as it is now. On the listing side it certainly is a bit easier (but not without different headaches), but on the buying side it is incredibly difficult. For example, I have clients who are doing their very best to keep up with the market, but the number of offers we have written and not been successful with is incredible. Many times realtors will put in the time to write the offers, knowing they have very little chance of success. Additionally, while it does not sound like much, writing offers in today’s market is more challenging as well. Most offers that are accepted need to be completely clean on contingencies. So all work with the property inspector, permits, bank, etc, must be done in advance. In a more balanced market, all of this work can wait until after the offer is accepted. I think if you polled a number of San Carlos agents, the vast majority would be in favor of relinquishing this market for one that is more grounded. Thanks for the post.
Bob
It’s is heartbreaking to see mega mansions replace cottage like homes near down town. Not only is our community impacted by 1% who can outbid regular middle class people but our family like atmosphere is now changing.
As for me I plan to sell one of two homes our family owns ( since 1950 and 1962). To my daughter below market . This will give here a start in life and we can be close together. More valuable than what $$$ can offer me
Make sure you pay gift tax to the IRS for a below-market value real estate sale to a related party, might want to consult a tax advisor. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Gift-Tax
Also property tax owed will step up significantly and capital gains tax will be owed on the sale. It may make sense to lease the home rather than sell it to your family member. Again, check with a tax advisor.
Re the comment saying teachers need a raise. Agree 100% IF/WHEN the teacher’s unions will start to allow for honest discussions and flexible approaches to changing tenure, allowing for the hiring / firing of teachers, ensuring pensions and benefits are included in total compensation discussions, etc. I am an ardent believer and supporter in public schools. Like any entrenched bureaucracy however, teachers union leadership are becoming less in touch with their constituents (teachers and students) and more concerned with their union’s preservation.
The vast, vast, vast majority of teachers are strong to excellent. However, to be treated so differently when it comes to hiring and firing decisions than any other industry is incredibly frustrating for us parents of public school students.