Despite reports of its death that were greatly exaggerated, Silicon Valley is coming back — in a big way. And its resurgence may leave an indelible mark on the San Carlos real estate in the coming year. Don’t be lulled by the unemployment figures that you read in the newspapers. Those figures are generally a) outdated by a few months, and b) weighed down by statewide averages. You only need to sit in traffic on either Highways 101 or 280 in the evening to realize that the Bay Area is definitely getting back to work. What’s behind the change?
There are several things going on that will put more money into the pockets of home buyers in the coming months. The first of which is the golden goose of Silicon Valley: The IPO. As was discussed in this article in today’s Journal, beneficiaries of LinkedIn’s wildly successful IPO this past summer will soon get to spend their wealth, as the lock-up period expires this month. And there are over two dozen valley companies that plan to test the IPO market in the coming year, the most widely anticipated being Facebook. This is a far cry from the trickle of public forays that we witnessed over the past two years.
The effect of this resurgence is already being felt in other areas – namely, the vacation hotspots. According to this article in the San Jose Mercury News, the market for vacation homes in the Lake Tahoe basin has bounced back – fueled mostly tech-wealthy individuals from the Bay Area.
Along with their potential IPO, Facebook will be busy relocating its employees into their new corporate campus in Menlo Park that they purchased from Sun Microsystems/Oracle. Now that there’s a sense of permanence with their location, Facebook employees are looking to establish roots in some of the more desirable local neighborhoods in Palo Alto, Menlo Park, and yes, San Carlos. Add a record setting IPO into the mix, and these buyers will carry buying power into the market that hasn’t been seen since Google went public years ago.
As the tech-centered economy rebounds over the coming year, look for vacancies in commercial office space start to get snapped up, as companies grow their workforce, and well-funded start-ups look for a roof over their head.
What’s in it for San Carlos?
2011 will go down in the books as the strongest year in home sales since 2007 in San Carlos. That’s a pretty strong turn-around. And that fact is made even more noteworthy when you consider that there wasn’t that much IPO money behind this year’s strong performance. Adding that pot of money to the mix in 2012 will definitely change the dynamics of the market. The landscape for home buyers may get more competitive, particularly if the inventory stays tight as it did for much of this year. And those buyers may find themselves pitted against competition that can wield large down-payments, or even pay all-cash.
Of course, nothing is guaranteed, as the topsy-turvy stock market has cruelly reminded numerous times over the past year. But if business in Silicon Valley stays on its projected course, we may be in a for a wild ride in the coming year.
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