Our Other Neighbor.
A couple of weeks ago, we took an in-depth look at how Belmont’s real estate market stacked up to the blistering market in San Carlos. As we discussed, Belmont has become not only a viable alternative, but in some cases a preferred option for some home buyers that were considering San Carlos as their primary target. It’s because of this increased focus on Belmont that the gap in home prices between the two cities is starting to close.
But Belmont is not the only nearby community that buyers are considering as an alternative as they feel priced out of San Carlos. Redwood City has enjoyed a huge increase in home prices in recent years, largely as a result of the aggressive transformation of the downtown sector. How this transformation came about is quite fascinating. We were still firmly in the grip of the Great Recession when plans were underway to completely modernize the downtown sector of Redwood City with high-rise apartments and condos, as well as an exponential increase in office space to attract new businesses. Looking back on the decade, what looked to be an incredibly risky move has paid off quite handsomely for a town that, like San Carlos, lived in obscurity for generations.
With the sudden availability of housing units, office space, and viable public transit, Redwood City naturally became a perfect solution to a tech economy that was bursting at the seams. Google, Facebook, Box, and a host of start-ups began flocking northward up the Peninsula in search of exactly what Redwood City had to offer. Box built their new headquarters right at Sequoia Station. Google took over the majority of the towers in the Seaport Business Center. And while Facebook is still primarily located in Menlo Park, the “Facebook Effect” that we have long been expecting is now very strongly being felt in Redwood City.
Edgewood Park and Mt Carmel.
Redwood City is much larger geographically, and has a population that is nearly three times that of San Carlos — so to make a side-by-side comparison of the total real estate markets of both cities is not really all that relevant, since Redwood City has vastly different neighborhoods and prices points just within its own border. But there are two specific neighborhoods in Redwood City that San Carlos home buyers often include in their home search: Edgewood Park, and Mt Carmel.
These two neighborhoods are often considered by San Carlos buyers because of their close proximity to San Carlos and to the downtown areas of both cities. The map below shows the location of both neighborhoods:
For those of you not familiar with either of these neighborhoods, Edgewood Park tends to feature larger, more expensive homes on substantially larger lots than Mt. Carmel, and indeed many places in San Carlos. (You can still find parcels of one acre or larger in Edgewood Park). Mt Carmel looks and feels a lot more like White Oaks and Howard Park, but with slightly larger lots and in some cases better curb appeal. Let’s take a look at how the home prices in these two neighborhoods compare to the San Carlos market. For the sake of continuity, we’ll use the same charts that we used to compare San Carlos and Belmont side-by-side:
Just like we saw with Belmont, San Carlos has maintained a slight edge in average house prices over the past decade. And much like what we have seen all along the Peninsula, these two neighborhoods of Redwood City have experienced some explosive growth in home prices over the past 4 years. The average price for a home in this sector increased by a whopping 25% in just that time, largely keeping step with San Carlos, which grew at about 29% over that period.
The story is much the same with median sales prices, as you can see below, except that the 23% growth in Mt. Carmel and Edgewood Park actually matched the rate of increase in San Carlos over the same period.
The price per square foot of a home in both Edgewood Park and Mt Carmel has grown by a stunning 31% since 2014, which far exceeds the 23% lift that San Carlos saw over that same period. It’s also interesting to see that the average price per square foot in both San Carlos and the two Redwood City neighborhoods is nearly equal.
Options on Both Borders.
What does all of this data tell us? First, if you’re a buyer looking for a home in San Carlos and you find that there are simply not enough options, or that you’re getting priced out of the San Carlos market, you have good viable options on either side of San Carlos. Both Belmont and Redwood City have their attributes and detriments, just as San Carlos does. Belmont enjoys great schools, but suffers from the lack of a downtown and its hilly geography makes it less walkable than the others. Redwood City has a fabulous downtown area, but suffers from public school scores that don’t compete with either San Carlos or Belmont. San Carlos suffers from generally undersized lots and the more expensive housing than either of the others.
But all three communities enjoy great weather, a highly desirable central-Peninsula location, and “relative affordability” when compared to such cities as Menlo Park, Palo Alto, and Burlingame. But with the kind of growth that the numbers above show, “affordability” is probably not the first thought that pops into anyone’s head in this hot market.
Although I have been a resident of San Carlos for the past 28 years, I spent the prior quarter century living in Redwood City (do the math… I’m old!) But I know both of these cities extremely well, and I would be happy to assist you in finding a home in either of these great communities.
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