The San Francisco Peninsula Real Estate Blog

To the surprise of few, the City of Burlingame announced that they will likely face a budget deficit of nearly $5M if they approve all of captial expenditures that are specified in the pending budget.    The San Mateo Daily Journal has outlined the details in this article:

Burlingame Faces Revenue Cuts

It’s not a surprise because other communities up and down the Peninsula have stubbed their toes in the same manner.  San Carlos recently announced that they are operating in a critical deficit mode, and consequently made difficult cuts to balance the budget.   While it’s not the primary culprit, the drop in real estate sales has helped exacerbate the problem in many communities.   City managers will project a certain amount of increased property tax revenue based upon anticpated sales volume — but we all know that this sales volume has not materialized this year, and the those homes that have sold are taking significant discounts.

So, like San Carlos and other communities on the Peninsula, Burlingame is going to have to make some tough decisions.   And like San Carlos, it will probably have to do more with less.

Foster City is a community that is known for its outstanding parks.  With all the water-font that’s available to the City, they’ve done a great job of making it very accessible to everyone.   Whatever kind of park you’re looking for, you’ll likely find it in Foster City.

My RE/MAX Today colleague Jim Minkey authors an outstanding blog on Foster City, and it includes a series on Foster City Parks that I really like.  Each week he highlights a different park and includes photos and some cool facts about each one.  It’s a great resource for finding the right park for you in Foster City, and I wanted to pass it along to you.

Here’s the link to Jim’s series:

Foster City Parks

Enjoy!

It’s interesting looking at the different communities on the Peninsula to see how they are withstanding the pressure of a down market.   A few days ago, we looked at Burlingame and noticed a double-digit drop in most of the key metrics — so, how about Belmont?   Like it’s neighbor San Carlos, Belmont is known for its relative stability.  How did the most recent quarter turn out?

From strictly a percentage standpoint, Belmont fared better than Burlingame.  Here’s a high-level summary of the quarterly figures:

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While Belmont lost ground in all key metrics, it wasn’t the double-digit drops that Burlingame experienced.  But this stands to reason, since the average sales price in Belmont is about $400k less than Burlingame.  The entry-level market on the Peninsula is still active, while homes over $1.5M are sitting a bit longer.   Here’s a graphical look at the data:

You can see that while the unit volume is down quite a bit from previous quarters, the average and median prices have held fairly steady.  That’s good news if you own a home in Belmont.   Finally, let’s look at the number of sales year-to-date:

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The drop in volume is very evident in this view.   With the current inventory of only 60 single-family residences on the market, it will be some time before the unit sales numbers get back on track.

In San Mateo County, it is “customary” for the buyers in a real estate transaction to pay for closing costs. (Note the word customary – like anything else in a transaction, this is indeed negotiable.)  But with a normal transaction, the majority of the fees that you’ll see when you close escrow are:

1. Escrow fees
2. Title insurance, and
3. Loan origination fees.

Assuming that you’re not pre-paying points on your loan, you can count on closing costs to amount to about 0.8% of the purchase price.  So if you’re buying a $1M home, you should have an additional ~$8,000 set aside to close escrow.  Again, this is a rough approximation, but it gives you an idea on the costs involved — first-time buyers are sometimes caught be surprised by this and have to scramble to close escrow.

Well, if you’re buying a home in the City of San Mateo, you need to be aware of an additional transfer tax that increases the 0.8% significantly.  The City of San Mateo levies a “City Transfer Tax” of $5.00 per every $1,000 of the sales price.  So the same $1M home would be levied an additional $5,000 of taxes at closing.  The good news?  Unless it’s agreed to otherwise, the buyer and the seller split the City Transfer Tax 50/50.  Regardless, $2,500 represents an increase of about 31% above our example $8,000 closing cost.

So while you’re scraping up enough change to buy that first home, be sure to keep an extra stash on the side to cover your closing costs.

Burlingame is viewed by some as one of the last bastions against the tide of bad news in the real estate market.  Like a few other highly sought-after communities on the Peninsula, Burlingame has resisted the downward pull of the real estate market for most of the year.   But no community is immune from such a prolonged slump, and Burlingame is no exception.   Here’s a quick summary of single family residence sales for the past quarter (July – September 2008) in Burlingame:

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Note that both the median and average prices, as well as the number of units sold, have all dropped by double-digit percentages from last year.  Comparing it to Q2′08, with the exception of eking out a small gain in unit sales, the same phenomenon occurred.   Here’s a graphical representation of the sales performance by quarter for the past two years.

Finally, in what’s probably the most telltale example of the paralyzed market we’re in right now, take a look at the year-to-year unit sales figures below.   Clearly, the economy has spooked sellers as well and it’s understandable why with prices dropping the way they are.