Over the past few years, Redwood City has grown and has also grown on people. Once labeled "Deadwood City" by residents, the city is now bustling with entertainment, restaurants, shops, and startups. And I don't see that growth slowing anytime soon, with all the new development downtown and organizations like Google and Stanford planning to build outposts here.
More and more people are looking at calling Redwood City home, which is quickly driving up demand for property. It's perfectly situated between San Francisco and San Jose, Downtown has a lot to offer, and it's still at a more affordable price point than nearby Menlo Park and Palo Alto.
In 2015, the real estate market continued on its upward trajectory with a substantial number of sales at record breaking prices. While I can't predict what the future holds for the real estate market, I can give you some insight into what I'm seeing right now. Here's a look at the numbers:
Average Sale Price, 1998-2015
In Redwood City the average sale price increased by 16% from 2014, hitting $1,345,549 in 2015. To be honest, it's difficult to say whether those numbers will continue to rise in 2016, or if the market will start to stabilize. Sellers who are waiting for the top of the market may want to strike while the iron's hot.
Number of Sales, 1998-2015
The number of sales in 2015 reached 557, almost hitting the top of the market numbers pre-recession. While the demand for homes in Redwood City continues to increase, we're not seeing a huge spike in the amount of homes listing for sale. Many are choosing to stay put, rather than entering a competitive market to buy something else in the area. Growing families are adding on and remodeling their homes instead of buying something bigger. On the other end of the spectrum, with prices so high it may not always make sense to downsize.
Number of Sales Over $2M, 1998-2015
In 2015, out of the 557 homes sold, 61 were at or above $2M, which is more than twice as many as in 2014. People working in tech accounted for the bulk of these sales $2M+ sales. The same people that were looking in Palo Alto, Menlo Park, and even in San Carlos in previous years and got priced out of the market, now call Redwood City home.
Advice for Buyers
Prices have skyrocketed over the past few years and the home buying process has been extremely competitive. The market will most likely continue in that direction for at least another few months. By competitive, I mean 3-5 (or more) offers on most properties that are priced well and show well with people willing to pay premium to get into the market. It's possible the market will cool down come summer/fall, but if prices continue to increase and interest rates increase, you may be a lot better off buying now rather than waiting. For instance, the difference in a $1M mortgage at 4% vs. 4.5% is about $300 per month. If prices increase in addition to interest rates, you can add quite a bit more to this.
Advice for Sellers
Buyers are still competing for properties and due to the large increase in property values over a relatively short period of time, we may start to see prices stabilize and even decrease for a period of time. We should also start to see mortgage interest rates rise. With these two factors combined, right now could potentially be the best possible time for you to sell. Once prices get too high and no one can buy, we're going to see the market stabilize or prices drop. Even if your home is a "10" and the market isn't as hot as it is now, your property may take some time to sell and end up selling for less than what it could now.
Cliff Whearley has been a resident of Redwood City for 23 years. He is a Realtor at Dwell Realtors, Inc. and has been practicing real estate since 2007. If you have any real estate questions, he would love to help!