Where homes began in Redwood City, where they are now, and where they are going
In 1850's, a group of pioneers and loggers founded Redwood City, building small cottages and a few large estates. The city is named for Redwood Creek which was used to float logged Redwood trees from Woodside out to the San Francisco Bay. In the late 1800s and early 1900s, the area around Downtown Redwood City was subdivided into lots ranging from 5,000 to 10,000 square feet. Residential development began moving away west towards the hills and communities like Emerald Hills and Palomar Park sprang up. By the 1960s, many of the residences in the city were built. At that time, homes were plenty and securing a family nest was easy for those who wanted to settle down in the area.
These days, the number of single family homes in Redwood City doesn’t seem able to meet the demands of our growing population in the Bay Area. It isn’t unusual to see homes selling with multiple offers, sometimes more than ten. We are seeing an increasing number of condos and apartment buildings being developed around town to help accommodate the growing demand for housing.
Home prices are also rising quickly. A look at the numbers from the first quarter of 2015 shows that two-bedroom homes on the east side of El Camino Real are starting in the $450-600k range, and three-bedroom homes starting in the $700-800k range. West of El Camino Real, two-bedrooms start in the $800-900k range and three-bedrooms start at $1 million.
These prices have been steadily climbing the charts since 2012 and many homes have seen up to 50% appreciation. Looking back at the previous market peaks in 2000 and 2007, the market was on an upswing for about three to four years before taking a turn. As we approach the fourth year of increasing prices with this current trend, the question is when will it stop, and how much will it drop. However, with home buyers paying cash, mortgage rates in the 3-4% range, and the outrageous rental market, it’s unlikely we’ll see much of a dip anytime soon.
For years, Redwood City has been the unappreciated middle child between San Carlos and Menlo Park and it’s finally living up to its overachieving siblings. A two-bedroom home one of San Carlos’ most desirable neighborhoods is easily $1.4 million and $1.8 or more in Menlo Park. Redwood City is still a lot more affordable, but it likely won’t be a lot cheaper for long.
As the tech industry continues to boom in the bay, Redwood City is also becoming more attractive to small startups and larger companies looking for office space. It’s perfectly centralized between San Francisco and Silicon Valley. Its downtown is unlike anything south of San Mateo or north of Palo Alto, offering a movie theater, restaurants galore, and hip coffee shops. As the city center continues to buzz, more and more people will be looking for homes in the area, close to work and the amenities downtown has to offer.