San Carlos Real Estate Agent, San Carlos Realtor Federal Reserve Action is Great News for San Carlos Buyers. | The White Oaks Blog
San Carlos Real Estate September 18, 2012

Federal Reserve Action is Great News for San Carlos Buyers.

by Chuck Gillooley

Economic Stimulus.

In a competitive, inventory-constrained real estate market like we’ve seen this entire year in San Carlos, buyers are constantly reminded to “be patient and persistent” in their quest to find a place to live.   For people who are not under the gun to find a new house, they’ve begrudgingly adopted this strategy since there’s simply not enough homes to go around.  But the one fear in the back of every buyer’s mind is that if it takes too long to find a house, they’re going to lose out on the obscenely low interest rates that we’re enjoying right now.

Well, the Federal Reserve’s plan that was announced  last week should sufficiently squash that fear..

Rates Low Through 2015

In a sweeping move to help stimulate the sluggish economic growth across the country, the Fed announced that it will spend $40 billion per month in mortgage-backed securities, and will keep interest rates at rock-bottom levels through mid-2015.    This move may seem somewhat surprising on the surface to those of us who live in this separate universe known as Silicon Valley, where the freeways are jammed and high-tech jobs once again appear to be plentiful.    But the rest of the country is not enjoying the wave of economic recovery that we’re experiencing here, so the move was deemed necessary.

This is great news for both buyers and sellers of real estate in San Carlos.   The Fed’s move means that mortgage backed securities will once again be an very low risk investment, and that we’ll enjoy another 3 years (at least) of historically low mortgage interest rates.  That should keep the fire stoked under the San Carlos real estate market for the foreseeable future.

Now, if there were only some houses to buy….
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Comments 6
  • I am no economist, but with a prolonged duration of low interest, my suspicion is that with time – more and more people will be able to afford to buy a home (from ongoing savings and vesting of stock, etc). At the same time, current owners in San Carlos will also hopefully be accumulating wealth at a similar rate.

    If the bay area is still booming and more people are moving here (possibly?), there may be higher and higher demand for housing. My hypothesis is the rate of increase of buyers in the San Carlos / Silicon Valley market will go up faster than the rate of increase of sellers. This makes me suspect prices may rise in this next few years.

    So here is my personal perspective on your commentary (based on a little gut and seeing what is happening around us – housing and industry) : “This is great news for both buyers and sellers of real estate in San Carlos. ”

    – Great for sellers looking to move out of the area coz they don’t have to worry about buying in a hyper-competitive area. Where does that leave move up sellers – will they be afraid to sell since it will be hard to buy back in? Time will tell.

    – Not so great for buyers since hyper-competition will most likely continue, in entry level, sub $1M homes for sure. $1M – $1.5M homes? Chuck may know better.

    – Real estate agents – sure the potential agent fee pool will be constrained by the # of sales but each sale, with more competition will surely raise prices. Great for the bottom line, for the top agents for sure. Reminds me of the merchants who sold jeans and tools during the gold rush.

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    • Marky,

      I appreciate your sentiment — the sword cuts both ways, no matter what an issue happens to be. In this case, I think the good outweighs the bad for both buyers and sellers. The amount of anxiety with home buyers right now about interest rates is very palpable, and this announcement should actually serve to settle their nerves and (hopefully) curb some of the panic buying that seems to be going on as we near the end of the year.

      Knowing that they’ll have the same low rates next year (and even after that) puts a bit more rationality back into the market, and maybe that will help keep prices from escalating to nosebleed levels again? Just a thought.

      Thanks for your perspective.

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  • I’m wondering if someone can educate us on the neighborhoods of San Carlos? My family made an offer on a house near downtown, at the bottom of the hill (couple blocks north of San Carlos Ave, couple blocks west of Holly Ave) We thought houses on the north side of San Carlos Ave would value higher since they belong to Arundel/Tierra Linda Middle but to our surprise, houses sold on the south side of San Carlos on the same street (closer to Redwood city) were sold at higher prices.

    Thank you for your input.

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    • Hi Kaitlin,

      Yes, what you experienced is counter-intuitive when you look at the popularity of the Arundel/TL/Carlmont connection. But the neighborhood you’re referring to (Cordes) has always been less expensive than the adjacent neighborhoods to the south in San Carlos — Howard Park and White Oaks. White Oaks Elementary is still the preferred school for many parents, which is a main factor in why prices are so much higher in White Oaks. And the proximity to the red-hot northern stretch of Laurel Street is a big factor as to why Howard Park remains in high demand (along with great schools, too.)

      But Cordes has both as well. In fact, many homes in that northern section of San Carlos are actually closer to the downtown shopping district than White Oaks! The fact that it’s a little bit more hilly and doesn’t have sidewalks probably discourages many buyers from venturing into that area. But other than that, it has always been a mystery why homes in that part of San Carlos remain a relative bargain to the adjacent neighborhoods.

      Thanks for your question!

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  • Thank you for your reply. I’m new to the bay area, can you comment on the desirability of San Carlos real estate as compared to other nearby cities in the bay area (i.e. Sunnyvale, Mountain View, Menlo Park, San Mateo, etc.)?

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  • Speaking of good schools, the 2012 API numbers are out and SC school district is up again!

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