As Microsoft just went about offering an absurd amount of money for a fractional ownership of the latest Wall Street gem known as Facebook.com, little do people know that action affects our house search and rent prices. Little known fact of Facebook.com is that they subsidize rental costs of employees who live within a certain radius of the company. In other words, if you’re a Facebook.com (which is located in Palo Alto) employee living in Palo Alto you can get upwards of $600/month towards your rent beyond your regular salary.
This incentive, of course, will continue to keep both rental properties and homes to remain expensive in Palo Alto as those 300+ employees become desensitized to the price of their mortgage payment and rent. This in turn causes a shift of value driving up the prices and others who may not get the same subsidy. Another comparable to this would be inflation, where the same dollar now would not get you the same location as 5 years ago prior.
Thursday, October 25, 2007
Sunday, October 21, 2007
San Francisco Bay Area Neighborhoods
This was something very interesting and new for me that I found out during my housing search. I have always assumed that the demographic of Bay Area cities is very different than those in Southern California.
For example, a city, such as West Covina in LA, can have both very nice as well as ghetto areas all located within the city limits. As you enter West Covina from Highway 10, you drive through cars on blocks in front yards and run down homes with bars across their windows. Yet as you start going uphill, the houses get significantly much more upscale and expensive. Yet we’re still in the same city and zip code.
I have always thought cities in the Bay Area have borders where neighborhoods within the city are very similar – like Palo Alto, East Palo Alto, Cupertino and even Los Gatos. East Palo Alto can be assumed to be mainly a dangerous neighborhood (i.e. not somewhere you want to live if you can avoid it), while Palo Alto and Los Gatos are generally all upscale. What I didn’t realize (and what you cannot see driving up and down Highway 101N/S) is there are pockets of great neighborhoods in cities (just like Southern California) that you normally would dismiss if seen from the highway.
Cities such as San Mateo, Redwood City, San Carlos, and Belmont will not look very attractive as you exit off Highway 101. In fact, they look darn close to being an industrial center with all of the auto body, paint shops, and run down apartments dotting their freeway exits.
Good rule of thumb would be the location of the neighborhood within these cities. Once you cross El Camino Real, you find amazing pockets of neighborhoods that will rival or surpass even what prestige cities such as Palo Alto and Los Altos can offer. These areas include, but are not limited to, San Mateo Park, Belmont Hills, San Carlos Hills, and Burlingame Hills. The beauty of these locations is they offer the same safe and clean neighborhoods as Palo Alto but at a significant discount. Keep the house hunt for between Highway 280 and El Camino Real and you will find some amazing gems being sold for a bargain.
On the reverse, avoid areas of Menlo Park that is on the East side of highway 101. You will understand once you visit there. Long story short it is just an extension of East Palo Alto.
For example, a city, such as West Covina in LA, can have both very nice as well as ghetto areas all located within the city limits. As you enter West Covina from Highway 10, you drive through cars on blocks in front yards and run down homes with bars across their windows. Yet as you start going uphill, the houses get significantly much more upscale and expensive. Yet we’re still in the same city and zip code.
I have always thought cities in the Bay Area have borders where neighborhoods within the city are very similar – like Palo Alto, East Palo Alto, Cupertino and even Los Gatos. East Palo Alto can be assumed to be mainly a dangerous neighborhood (i.e. not somewhere you want to live if you can avoid it), while Palo Alto and Los Gatos are generally all upscale. What I didn’t realize (and what you cannot see driving up and down Highway 101N/S) is there are pockets of great neighborhoods in cities (just like Southern California) that you normally would dismiss if seen from the highway.
Cities such as San Mateo, Redwood City, San Carlos, and Belmont will not look very attractive as you exit off Highway 101. In fact, they look darn close to being an industrial center with all of the auto body, paint shops, and run down apartments dotting their freeway exits.
Good rule of thumb would be the location of the neighborhood within these cities. Once you cross El Camino Real, you find amazing pockets of neighborhoods that will rival or surpass even what prestige cities such as Palo Alto and Los Altos can offer. These areas include, but are not limited to, San Mateo Park, Belmont Hills, San Carlos Hills, and Burlingame Hills. The beauty of these locations is they offer the same safe and clean neighborhoods as Palo Alto but at a significant discount. Keep the house hunt for between Highway 280 and El Camino Real and you will find some amazing gems being sold for a bargain.
On the reverse, avoid areas of Menlo Park that is on the East side of highway 101. You will understand once you visit there. Long story short it is just an extension of East Palo Alto.
Thursday, October 18, 2007
My house search
San Francisco Bay Area is probably one of the hardest places to look for a home, especially if you’re looking to live in an area that is close to work. Most companies in the Bay Area are located in San Francisco, parts of the peninsula, and Santa Clara to north San Jose. Unfortunately, this is also where there is almost no new open land for construction.
I have been looking for a home to purchase for a while – mainly concentrating in areas such as Belmont, San Carlos, Redwood City, Menlo Park, Palo Alto, and Mountain View. Palo Alto is definitely a reach for me. 2 bedroom condos in downtown Palo Alto costs upwards of $1.4M. New construction near San Antonio starts at $900K.
What I have noticed is that the Bay Area peninsula has some pretty niche communities. Palo Alto homes start from $1M and goes upwards to $10M plus, while East Palo Alto next door is having trouble selling their brand new 4 bedroom homes at $700K. Of course, most of us who grew up here also know that East Palo Alto is a very dangerous place. Yes, the city is a far cry from when I was a kid – but it is still dangerous and will take a lot of investment and work to clean up the “trash” and make the community better.
The inside joke has always been the only national franchise that has consistently stayed open in East Palo Alto is McDonalds – and that’s because they’re located next door to the police station.
Overall, it looks like in general most of the Bay Area is insulated from the current mortgage crisis. I have heard of fire sales of brand new construction in Sacramento, yet people are still bidding over ask in areas such as Palo Alto and Cupertino.
I have been looking for a home to purchase for a while – mainly concentrating in areas such as Belmont, San Carlos, Redwood City, Menlo Park, Palo Alto, and Mountain View. Palo Alto is definitely a reach for me. 2 bedroom condos in downtown Palo Alto costs upwards of $1.4M. New construction near San Antonio starts at $900K.
What I have noticed is that the Bay Area peninsula has some pretty niche communities. Palo Alto homes start from $1M and goes upwards to $10M plus, while East Palo Alto next door is having trouble selling their brand new 4 bedroom homes at $700K. Of course, most of us who grew up here also know that East Palo Alto is a very dangerous place. Yes, the city is a far cry from when I was a kid – but it is still dangerous and will take a lot of investment and work to clean up the “trash” and make the community better.
The inside joke has always been the only national franchise that has consistently stayed open in East Palo Alto is McDonalds – and that’s because they’re located next door to the police station.
Overall, it looks like in general most of the Bay Area is insulated from the current mortgage crisis. I have heard of fire sales of brand new construction in Sacramento, yet people are still bidding over ask in areas such as Palo Alto and Cupertino.
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