Predicting the Future

Predicting the future….yeah, right! This really is a strange time in real estate. To me, at least. It’s really difficult to come to any kind of understanding about what’s going on…and thus what 2011 will actually bring. On the one hand I had this experience…I’m working with a young couple who want to buy a house in Pacifica or South San Francisco. In the last month we’ve seen probably 10 houses that could actually suit their needs. Some of these houses are very, very nice. Upgrades everywhere. Homes in perfect showing condition. Compared to Foster City and the Mid Peninsula, priced well.  None of them have sold. My client refers alotto information he’s finding online that tells him the market is going to continue a precipitous downward slide. He thinks prices could fall another 30%. I think that’s absurd…but it’s hard to argue with nothing selling in his price range in Pacifica. The longer a house stays on the market the more pressure will be on it to reduce their price to sell it.

On the other hand we have the 2010 numbers for Foster City…and by the way, those numbers are pretty typical for our neighboring communities as well. Slight increases in all pertinent numbers. Values increasing…albeit by a small amount. I have to say honestly, that fact surprised me somewhat. The real estate market has taken an enormous amount of abuse within the media and elsewhere and still we have appreciation last year! All the pundits predicting 50% devaluation have certainly been proven wrong around here. Who knows what the future holds, but it sure seems very hard to believe that after we had the stability of 2010 we’ll see values plummet to the degree that was predicted in 2008.

Yet another thing that seems very clear to me is just true it is that all real estate is local. It really won’t surprise me if Pacifica or San Jose or many East Bay cities continue to decline dramatically. It really will surprise me if it does around here. I have a client interested in a house in Belmont listed just below $1,300,000. Offers are going to be heard on Thursday and there are 4 disclosure packets out right now. That dynamic isn’t happening in Pacifica or Almaden Valley or San Bruno. (I wish it wasn’t here!! I don’t want that competition!)

How do you predict, then, the trajectory of the 2011 Foster City real estate market? I think you have to believe that it’s going to be healthy and at the very least stable. I think values will hold their own and in some cases decent appreciation will occur. If you’ve invested here, or you’re thinking about investing here, there isn’t a better place anywhere to do that!

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