Inside San Mateo: The Bay Area’s Priciest Real Estate Market

We all know the San Francisco Bay Area real estate market can be pricey. That’s no secret. But when you drill down to the county level, there’s one market that rises above the others.

Last month, San Mateo County had the highest median home price of any housing market in the nine-county Bay Area region. But San Mateo also has a lot to offer, which is why home buyers often have to compete fiercely for limited inventory in this market.

San Mateo: Priciest Market in the Bay Area

An April 2024 report from the California Association of Realtors showed that home prices in the Golden State continue to climb.

“March’s statewide median home price was $854,490,” the report stated, “up 6.0 percent from February and up 7.7 percent from $793,260 in March 2023.”

Out of the seven major California regions that were included in this report, the San Francisco Bay Area had the highest median sale price, and by a wide margin. Last month, the median selling price for existing single-family homes in the nine-county Bay Area region was up to $1,386,500.

But even by the Bay Area’s higher-than-average home price standards, San Mateo County stood out last month as being the absolute priciest.

Here were the median sale prices by county, for the month of March 2024:

• Alameda: $1,400,000
• Contra Costa: $890,000
• Marin: $1,957,500
• Napa: $880,000
• San Francisco: $1,745,000
• San Mateo: $2,170,000
• Santa Clara: $1,910,000
• Solano: $584,950
• Sonoma: $865,000

What Makes It So Expensive?

Last month, the median sale price for homes located in San Mateo County was nearly $800,000 more than the regional median.

But why? What makes San Mateo the most expensive county in the most expensive region of the United States?

As usual, it’s a supply and demand story.

The San Mateo real estate market has suffered from chronically low inventory levels for years. The demand from buyers, meanwhile, continues to soar.

Housing market inventory in San Mateo dipped slightly over the past year and currently sits at about a two-month supply. That makes it a seller’s market from a supply standpoint. During that same 12-month timeframe, home sales within the San Mateo housing market increased by nearly 5%.

Of course, other Bay Area cities and counties are experiencing a supply and demand imbalance. So what makes San Mateo stand out, when it comes to home values?

Here are three factors that have contributed to this trend:

1. Proximity to major job centers

San Mateo County is strategically located between San Francisco and Silicon Valley, two major job centers in the region. This makes it a highly desirable place to live for individuals working in industries like technology, finance, and biotech.

Many people who work in these hubs choose to live in San Mateo for a slightly less intense atmosphere and a more suburban environment, while still having a convenient commute. The convenience of commuting to these job hubs contributes to the higher demand for housing in San Mateo County.

Residents have a variety of commute options, including freeways, Caltrain rail service, and even ferry access to San Francisco.

2. Limited space for development

San Mateo County faces constraints on housing supply due to factors like geographical limitations and strict zoning regulations. San Mateo County is sandwiched between the Pacific Ocean and the Santa Cruz Mountains, so there’s not much room for sprawl.

Limited land availability coupled with high demand leads to intense competition among buyers, resulting in higher home prices.

3. A desirable location that attracts buyers

San Mateo County offers a high quality of life with access to beautiful beaches, parks, top-rated schools, and affluent neighborhoods. The county’s desirable amenities and reputation for safety and livability attract affluent individuals and families, further driving up property values.

The county also offers easy access to stunning natural beauty, with beaches along the Pacific coast and hiking trails in the Santa Cruz Mountains. This combination of urban amenities, outdoor recreation, and good schools makes San Mateo a highly sought-after place to live.

Jumbo Loans Are Well-Suited for This Market

Many home buyers within the San Mateo real estate market end up using jumbo loans to finance their home purchases. It’s a necessity for many buyers, given the expensive nature of this market.

Definition: A “jumbo loan” is a mortgage amount that exceeds the conforming loan limit set by the Federal Housing Finance Agency (FHFA).

With a conforming loan, there’s a specific limit to how much you can borrow. These caps are appropriately referred to as “conforming loan limits.” The current limit for a single-family property located within the San Francisco Bay Area is $1,149,825.

But in San Mateo County, many of the homes that are on the market are priced well above the conforming loan limit. So it can be hard to find a property that falls within the conforming range. Fortunately, you don’t have to.

Jumbo mortgage financing can help San Mateo home buyers finance and purchase a property that exceeds the government-imposed loan limit.

There’s even such a thing as a super jumbo loan, which can provide financing up to $5 million in some cases. Contact us if you have questions about this!

The bottom line: San Mateo County was the most expensive real estate market in the Bay Area last month, and it’s one of the most expensive in the entire nation. But there’s a reason for this. It’s also one of the most pleasant places to live in all of California.