San Mateo has the most unique, traditional style homes set amidst a backdrop of winding waterfronts and rugged hills. This area has a perennial appeal for residents and real estate investors, but 2023 has thus far shaped up to be an unusual year for the real estate market. Sales are down from last year, but prices are up, presumably because inventory is low. Mortgage rates are elevated. Few observers can tell where the market might be headed, but here’s what the data shows.
San Mateo housing market trends
The San Mateo real estate market is always moving. For most buyers, the location of San Mateo cannot be beat. San Mateo is perfectly located between San Francisco and Silicon Valley with the ideal location to minimize commute time for a couple that works in opposite directions. Here are the current trends that can be observed locally.
Home values increasing
Given the capital appreciation seen in the market since 2020, it’s hard to imagine that home values are again rising in 2023, but this has been the case. After dipping in the summer of 2022, home prices have since been rising in San Mateo County throughout most of 2023. However, capital appreciation isn’t necessarily outpacing normal historical levels. Especially in affluent and luxurious areas like San Mateo County, it tends to be the case that when the real estate market isn’t falling due to some specific cause, home prices are going up.
Home inventory fluctuating
The active listening count in San Mateo offers a clue as to why home values have been continuing to rise in 2023. Housing isn’t that scarce relative to some areas of the U.S. right now, but still there haven’t been a ton of homes on the market this year.
Mortgage rates remaining elevated
Mortgage rates began to rise in 2022 due to the recent round of Federal Reserve interest rate hikes that have made the cost of borrowing higher across the economy. In 2023, 30-year fixed-rate mortgages have tended to hover in the ballpark of 6-7%. Rapidly rising rates in 2022 were initially a significant shock to homebuyers, but recent rates are not unusually high from a long-term historical perspective. According to information published by Freddie Mac, buyers have adapted to higher rates. It appears that home buyers generally understand that the rock-bottom interest rates of the pandemic era couldn’t last forever, and more experienced buyers are thankful to still have rates well below the highs of the late twentieth century.
How the pandemic affected the San Mateo market
In 2023, realtors are still catching their breath from the frenzied pace and unpredictable changes that have rocked the real estate market over the past few years. Pandemic-related restrictions initially appeared to be a death sentence for real estate. However, the motivation of many Americans to relocate during the pandemic combined with ultra-low interest rates to spark intense sales activity for a couple of years. Rising prices ensued, and home prices across the U.S. are still nowhere near pre-pandemic levels, with no signs of returning. Also during this time, the real estate industry advanced technologically in order to accommodate the demand for conducting business remotely.
Forecasting the San Mateo market
The market can never be predicted precisely, but we can make reasonable inferences from the current state of the market.
Home prices
Home prices don’t appear to have a real impetus to keep rising much beyond current levels, but there’s also nothing apparent on the horizon that’s likely to bring them down. Timing the market is generally a losing game, so it’s not advisable for buyers or sellers to hold out for ideal home prices. Generally, it’s worthwhile to take advantage of opportunities while prices are not moving up or down wildly.
Mortgage rates
Like home prices, mortgage rates are likely to remain somewhat range-bound until there is a fresh impetus from the market. Don’t look for mortgage rates to rise much more, as easing inflation is likely to keep the Federal Reserve from raising interest rates aggressively. However, don’t look for rates to fall until inflation falls more significantly or the economy begins contracting.
Should you invest in the San Mateo real estate market?
This is the question that most buyers and investors want to know when looking at market reports. If you’re a residential buyer, San Mateo is still a great place to live and homes are still available. If you’re looking as an investor, you have more to consider in today’s market, but you can still find good opportunities. If you’re unsure about entering the market — or even if you are sure — the best possible advice would be to consult with a locally experienced real estate agent. An agent can tell you where the market is currently from a “boots on the ground” perspective that will trump even the best real estate market analysis and commentary.
San Mateo neighborhoods
Different San Mateo neighborhoods offer different opportunities, from extravagant luxury to unparalleled value. Here are just a few of the numerous great neighborhoods in town:
19th Avenue Park
With single-family homes in the low millions and condos even lower than that, 19th Avenue Park offers good value in a neighborhood with good schools. The location of this neighborhood makes for easy commuting.
Beresford Manner
For buyers seeking affordable homes in San Mateo, Beresford is the perfect choice. Homes here are smaller and less expensive than other San Mateo neighborhoods, but you’ll still find great amenities and an ample selection of single-family homes, townhouses, and condos.
Edgewater Isle
This newer development offers real estate buyers the opportunity to scoop up waterfront properties that are sure to accrue value over time. However, the real estate here consists exclusively of condos.
Lakeshore
With a variety of property styles and prices, Lakeshore is a great choice for first-time buyers looking to enter the San Mateo Market. You can find single-family homes, ranch-style homes, bungalows, and condos at reasonable prices.
Additional options
Click here to learn more about all of the best neighborhoods in San Mateo.
How to buy or sell in San Mateo
There’s an endless amount of information to be found when you’re looking into real estate, but there is a human element that’s needed in order to really understand the market. If you’re looking to enter the San Mateo market as a buyer, seller, or investor, The Sternsmith Group is at your service. As the top agent in San Mateo since 2018, Sternsmith’s team of real estate agents have a solid understanding of market dynamics in general and the San Mateo real estate market in particular. A Sternsmith agent can introduce you to the best neighborhoods in the city, as well as great locales in the surrounding area. You can browse online home listings from the Sternsmith Group or reach out for a consultation about your real estate goals.
