A lot of people are talking about the housing shortage which has been driving the cost of buying and renting out of reach for many people who want to live in the mid-peninsula. What we are facing today is the result of many years of under-investing in our housing stock, and our transportation infrastructure coupled with demographic changes and the highest job growth in the entire United States over the past 5 years.
“Peninsula population growth has reached record levels measured by annual increase in the past few years. This is true even as the contribution from natural increase has declined as in most parts of the state. Net migration has turned positive and reached record levels since 2010 as job growth on the Peninsula has surged.”-Source: Center for the Continuing Study of the California Economy-June 2016.
I have been following the ongoing debate in the local online forums and it seems that many people don’t understand the economic and social forces at work. I have seen and heard comments from people who are quite convinced that greedy landlords and developers are to blame for rising prices. Some suggest that foreign buyers are responsible, snapping up properties as investments and leaving them vacant. Others chastise their neighbors for selling homes at a vast profit to “developers” who often times are their new neighbors seeking to build a new larger home in an established neighborhood.
Many of the “solutions” offered are focused on alleviating the symptoms of a problem that is too often characterized in terms of bad motives, mistrust and misunderstanding. Rent control, measures to reduce the number of jobs being created, and outlawing foreign ownership of real estate are just a few of the ideas that have been put forward in public forums, in front of planning commissions and at city council meetings.
I am a long time (28 years) Menlo Park resident who loves the area and raised my children here. I am also a person who has made her living in the real estate business for over 10 years so I want to present a factual and unemotional perspective on the changes driving our local real estate market. I think it is important to offer some insights that may help people see the issue more clearly. Over the next 4 installments I will address the key factors that I believe are driving the current market. They are:
* Regional job Growth
* Housing stock
* Demographic shift
* Transportation Infrastructure
Each of these topics is complex but I want to attempt to illustrate how interconnected they are and central to achieving a well-reasoned understanding of what is happening in our local market. I hope you find this series helpful and insightful and I welcome your comments.