Why the housing market is so tight

In my last post I talked about the economics of housing in San Mateo County, citing data on how little we have of if, affordable or otherwise. 

Peripatetic local candidate Michael Stogner, an apparent opponent of any significant housing development, chimed in on comments that there are more than 6,000 vacant residences in the county according to the U.S. census, including homes, condominiums and rental units. 

I thought that was an interesting number, so I decided to dig into the information and found out quite a bit.

Approximately 1/4 of those vacancies are the result of foreclosures, which is one of the concerns Stogner presented and that he wants to stop. Saving the homes of 1,500 families is a respectable idea, but I think finding places for those families to live is a more reasonable effort. I thought maybe something might be available in the remaining 4,500+ units. 

Amazingly enough, another quarter of those vacant homes are under probate and waiting to find out who will actually own them.

That leaves a little over 3,000 vacant residential units that are on the market, for sale, that are not under short-sale.  Then you have to subtract the 1,200 units that have been condemned, leaving 1,800 available units.

In the information Michael sent from the U.S. Census, there are a total of 271,000 housing units in San Mateo County for the 770,000 residents.  That means 99.4 percent of all the available housing in San Mateo County is currently filled.

After talking to several real estate agents about these numbers, the consensus is that there is NO housing available.  The 1,800 units on the market are merely a snapshot, and the average of the total supply of housing, and remains fairly constant. 

Few units fit for occupation stay on the market for more than two months.  That extreme lack of supply keeps the county on a strong sellers' market with little negotiation room. That keeps rents and home prices high and out of reach for most people who work in San Mateo County and fill our freeways beyond our borders.

That is why I say that affordable housing is a very small part of the overall housing problem in San Mateo County and why every municipality is trying to deal with it.

Other communities are getting this. Brisbane is building a ton of housing right on the Bay’s edge. San Franciso is putting 6,000 people right in the Bay with the Treasure Island development. There was even an article in the Mercury-News recently that detailed plans to build almost 2,000 units near the intersection of 101 and Marsh Road in Menlo Park, along with the Bohannon hotel and retail complex. 

(I actually applaud that effort, even though I find it completely ironic. The Menlo Park City Council stated emphatically that they opposed the Saltworks project because it wasn’t near the transit corridor, put too many people near 101, and was too near the Bay. Now they propose putting a third of the housing that Saltworks would have, along with major traffic attractions, right in the same place. Apparently what’s bad for Redwood City is good for Menlo Park.)

But a lot more needs to be done to bring the cost of housing down and cool off the demand. Thanks to Michael Stogner for giving me the information to support my last post. I'm pretty sure that's not what he had in mind, but it was helpful. ;-)