[ Strengths | Weaknesses | Opportunities | Threats ]
[ Recent Transactions | Neighborhood Transactions | Schools | Map ]
[ What's Available in the Area | Other Notes ]

Strengths

1)  Properties with water views are uncommon in Silicon Valley and most homes in the complex have a pretty good view.  Those that don’t are just a few steps from the lagoon.  The sunset views are usually impressive.

2)  Many units are bright throughout the day because of large skylights in main rooms and bathrooms.

3)  The local elementary and middle schools for this neighborhood are strong. 

4)  While this community is separated (it’s on an island, after all), it has easy access to local shopping off Beach Park Blvd. and Foster City Blvd., plus numerous open fields and tennis courts (at Catamaran Park and Farragut Park). 

Weaknesses

1)  You’ll need to walk outside to get to the garage as there isn’t access from inside the homes.  This trade-off increases the total amount of usable space (less space on the island used for corridors and stairs).  But residents need to be careful opening the garage doors, however, because the doors open outwards and the non-door side of the key slots is sometimes blocked by foliage.

2)  The lawn around the units towards the waterfront is often damp making the some of the grass more ornamental than "picnic area".

3)  The patios for many upstairs townhomes are accessible by stairs, which makes it convenient to get outside.  The trade-off is that you may want a charley bar to secure the patio door at night should you decide to leave it open for air circulation.

Opportunities

1)  Waterfront property in Silicon Valley is uncommon.  Some of these units have views many more expensive properties can’t match.

2)  Between 2006 and 2007, Foster City Elementary School crossed the 900 point threshold in its API score (from 898 to 912), making it an elite school.  In the same period, Bowditch Middle School increased its API score from 873 to 879, both very good scores.  If it crosses 900 also, this area will be one of the distinctive areas in Silicon Valley with elite primary schools from K through 8.

3)  This complex has tended to have a low turnover.  That generally indicates that the residents are stable and enjoy living there.

Threats

1)  The monthly HOA costs in this complex are scheduled to increase for the next few years. 

2)  The ground, reclaimed land, is generally moist, so homeowners should expect some settlement over time.

3)  Balboa St. connects the island to the rest of Foster City using a short bridge, what seems to be less than 50 feet.  It would be inconvenient if this bridge were blocked. 

Recent Transactions

Address	Bed	Bath	Sq.Ft.	Close	Sale Price	HOA
607 Portofino Ln	2	2.5	1780	10/30/07	pending	$397
625 Portofino Ln	2	2	1395	7/11/07	$675,000	$397
809 Balboa Ln	2	2	1490	7/3/07	$680,000	$395
839 Balboa Ln	2	2	1395	1/22/07	$665,000	no info
860 Balboa Ln	2	2	1395	12/29/06	$680,000	$397
Contact me for pictures and upgrade information

Neighborhood Recent Transactions

Schools and School District Information for The Islands of Foster City

Since school boundaries and availability may change based on enrollment needs and population shifts, it is always a good idea to check with the local school district (San Mateo-Foster City School District, San Mateo Union High School District) for the latest information.  You can also lookup current elementary and middle school information.

1)  Foster City Elementary School (see ratings and parent opinions). 

2)  Bowditch Middle School (see ratings and parent opinions). 

3)  The San Mateo Union High School District allows open enrollment.

Map

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(c) Steve Leung for the Silicon Valley Real Estate Blog at 1SiliconValley.com

Recommended Reading:

• Download the Silicon Valley Home Buyers Book
• Not Overpaying When Buying a Home
• Considering One HOA Versus Another
• Preparing Your Finances for Buying a Home
• The Thought Process Behind Making an Offer on a Home

The other is Atlantis reclaimed from the Bay, bringing with it an enviable landscape: curving streets and arched bridgeways glide through the greenery, which itself is beautifully manicured to meticulous perfection.  The Foster City atmosphere creates an impressive Epcot Center-like portrait, with Roman order and discipline — ask anyone who's slow rolled through a stop sign on the suburban side of Edgewater Blvd. 

The two cities share a common bonds that stretch well beyond just the numbers 94404 and the 101 artery.  The first is, while neither is in the traditional boundaries of Silicon Valley, you'd have a hard time convincing the people who live there that they're not Silicon Valley residents.   

They also share Hillsdale High School, a newly designated California Distinguished School in 2007.  It's no wonder that Foster City has in recent years decided to focus more on economic development than building a high school of its own.

But when you look at the graph of Foster City median home prices, there's something wrong with the picture.  It's subtle, but my clients depend on me to see these things.  The question is whether it's an opportunity or an obstacle for them. 

So How Much More Is a Home Worth Than a Condo?

In my April 2007 Cupertino Home Prices Update and Sunnyvale Home Prices Update, I talked about one way I look for good values for my clients: based on how expensive median homes are in a city relative to the county average.

In Foster City, townhomes and condos are generally newer that what you'll find in neighboring cities like San Mateo or Burlingame, so calculating the premium alone really doesn't tell my buyers what they need to know to make a good puchasing decision.  (In fact, I'd actually argue that condominiums in Foster City are more comparable to those in other Silicon Valley cities like Cupertino or Sunnyvale than neighboring San Mateo.)

In March 2007, the median price of a Foster City townhome or condo was three-quarters — literally, 75.8% — of the median price of a single-family house.  The average in San Mateo County over the last ten years is 60.8%. 

So if condominiums and townhomes in Foster City are three-quarters the price of a house, does that make Foster City houses cheap or Foster City condos expensive? 

The answer depends on how much you like the water.  What's unique about Foster City is the man-made lagoon system that stretches throughout the city like a canal-way.  There are many more apartments, townhomes, and condominiums along the water than there are freestanding single-family homes and — despite the fact we're surrounded by water — desirable waterfront property is exceedingly rare in Silicon Valley.

The historical average over the last ten years says that condos and townhomes in Foster City usually cost 65% of what the median single-family home costs.  The ratio is high right now so, I recommend to my clients that they wait or search elsewhere unless we find a special property that they fall in love with, namely one on the lagoon.  After all, current inventory was exceedingly low this year with only 17 on the market compared to 36 last year.  Why would I encourage my clients to fight (i.e. pay) for something that may not be special to them?

Given a meager 7% price premium for single-family homes in Foster City over the San Mateo County median, Foster City houses are a good deal by the numbers.  The primary school system there is decent, but not prestigious, reducing any price premium for education.  If that sounds like a half-hearted recommendation, that's because it is: my clients either love or hate the atmosphere in Foster City and it's a strong emotional reaction either way.

What's Happening in San Mateo?

Single-family homes in the City of San Mateo spiked above the San Mateo County average for the first time since 2001.  No major spikes or dips in new listings or inventory.  Condominiums and townhomes did see an increase in average days-on-market (DOM) from 49 to 69 to go along with the 10.7% price increase.  

That looks like a large jump, but that's after the opportunity last year when common interest development prices took an unfairly large hit relative to the San Mateo County median.

There's something interesting going on with the bathrooms, though.  Don't worry, it's safe to look!  This map shows all the currently available one bathroom single-family homes in the City of San Mateo.  Why do I alert my clients to these areas?

Economic obsolescence.  I don't usually recommend one-bathroom single-family homes to my clients because they're generally harder for them to re-sell unless you renovate them, or they're in a prestigious area.  And it doesn't take a stretch of the imagination to see why, particularly if my clients (or their potential buyers) have guests over.  If my clients are set on having a yard, we'll talk about their needs and what they're really looking to get out of it. 

Often, their needs can be fulfilled by a number of townhomes (some with surprisingly spacious yards) that offer a better value than one-bathroom single-family homes.  Of course, the benefits are sometimes offset by HOA fees (some HOAs are better than others) in which case the free-standing house becomes a better value.

From a macro-perspective, the density of one-bathroom single-family homes for sale is a pretty good indicator of neighborhoods that are in trouble.  You might find homes like these in prestigious places like downtown Mountain View (where the home will almost certainly be expanded) and Palo Alto (where zoning laws may prevent expansion), but never for sale in bulk.  And a few are usually scattered just about everywhere, often being sold by lifelong residents.

But when you have a cluster of them, there is no way that a high percentage of them will be modernized without major — usually corporate or government — money pouring into the area.  And when you cluster a set of economically obsolete homes together, you get the real estate equivalent of a dollar-store, a place where you can find inexpensive wares that aren't necessarily bargains or investment material.

(c) Steve Leung for the Silicon Valley Real Estate Blog at 1SiliconValley.com

Recommended Reading:

• Silicon Valley Housing Market and Home Prices for Other Cities
• Determining Your Must-Haves When Buying a Home
• Why the Perfect House Wasn't So Perfect
• Silicon Valley Home Buyers Guide
• Emotions in Real Estate: From Fear to Elation

We’ll take a look at how school rankings and Silicon Valley real estate prices are related, but first let’s look at how to read the information.

Number of Students. In the first column, you’ll find the number of students whose results were included from that school.  It’s pretty close to the total number of students, less any excluded students.  The rules for excluding students are listed in the API Base Documentation Information Guide found on the CDE API page.  Surprisingly, the number of students has little to do with how well the school did in its API scores (almost, see epilogue).

Base API, Statewide Rank, Similar Schools Rank. The Base API score is like an SAT score except it’s from 200 to 1000.  Higher is better.  To make comparing schools easier, the CDE provides a statewide rank from 1 to 10 (ten is best) and a similar schools rank that rates schools (again from 1 to 10, ten being best) that have similar demographics and characteristics.  Apples-to-apples in a way.

Growth Target, API Target. The growth target is the number of points California wants the school to improve in the next year.  That added with the current base API score equals the API target.  The CDE doesn’t set a target for schools above the current statewide performance target of 800.

Silicon Valley School District Scores

I’ve assembled information from the CDE site and the Palo Alto Daily News to provide a table of school district API averages for Silicon Valley and Bay Area elementary and middle schools.

Here are the API values for these Silicon Valley school districts:

Comparing School Districts and Housing Prices

Remember the chart of median Silicon Valley single-family home prices in February 2007 from my article Determining Your Must-Haves When Buying a House?

Combining the chart for Silicon Valley school district rankings with the one for Silicon Valley median single-family real estate prices brings up some surprises.  (I used a simple ratio between how far the API score was above 700 and the median single-family home price.  The resulting number isn’t really that relevant, it’s the visual comparison I was looking for.)

Regarding Schools and Value in Pricing

First, while Cupertino and Foster City housing prices are very similar, there is a vast difference between the performance index of their school districts.  On school rankings, compared to Foster City, Cupertino represents a much better value based on the median sale price of single-family homes.

Second, while Los Altos has the highest API scores, it also had a much higher median price putting it on-par with other elite school districts like Palo Alto and Los Gatos, but well-below Saratoga which had both higher test scores and a lower median home price.

Third, it is possible to cherry-pick good schools in average school districts.  For example,  you can search around Sunnyvale’s Cherry Chase Elementary, which has a base API score of 941, if you’re looking for a good elementary school.  Stay tuned.

(c) Alex H. Wang for the Silicon Valley Real Estate Blog at 1SiliconValley.com

Recommended Reading:

• Determining Your Must-Haves When Buying a House
• Silicon Valley School Information
• Mortgage Rates Are Low Without Exclamation Points
• Why the Perfect House Wasn’t So Perfect

[ed.  This is the CYA: The data in the report is considered accurate but not guaranteed.]

Epilogue

There’s a quirk in the ratings system where only test scores for “statistically significant” groups (read: ethnicities) are counted.  Some schools, none that I can find documentation on, were accused of reclassifying lesser performing students into groups that weren’t statistically significant to prop up their overall test scores.

There is a measure of transparency, though, because if you drill down on the individual schools, it will show which groups were counted, which weren’t, and how many were in each.

I thought the top-level townhome was in pristine condition considering they had a Cujo, until I peered into the room and saw a tiny 10-pound pug sitting attentively in front of the television!

There were network connections wired into every room, and this being Silicon Valley, we asked the owner if it was standard CAT-5 or CAT-5e.  The gentleman, in his decidedly French accent, said with a bit of sheepishness, "You know, I'm not sure."  (He was a little redfaced because we'd talked about his job at Cisco.) 

So I asked whether he had a wireless network and his face lit up.  He hopped over to the storage closet in the entryway and eagerly showed off the router, neatly and carefully wired into the connectivity panel.  He didn't check for CAT-5e because he didn't need it.

The network drops were a "nice-to-have" for my client who does a lot with multimedia.  They weren't a dealmaker (and as he discovered not a dealbreaker) but given that this was the first home he'd seen as a potential buyer, he was eager to get some experience looking at houses under his belt so that he could really experience firsthand what his requirements feel like.

In the back of people's minds, most people start off with a list of requirements that I rank order informally using the "MoSCoW" method:

• Must: What they know they want
• Should: What they think they want
• Could: What they don't have strong feelings about
• Won't: What they don't want

For any number of reasons, what people say they want doesn't always line up with what they really want in their minds and hearts. 

A lot of times that's because of the difference between theory and application: being able to actually drive the commute or experience how many flights of stairs there are gives people a clearer picture of "could" vs. "won't".

The tricky part is separating the borderline "must-haves" from the "shoulds."  And with my client in the early stages of his home search, we needed to setup a stable foundation so that we'd learn those differences from every property he would see on the rest of his search.

You Can Learn a Great Deal From a Rant

I sat in the office of another client, across from him and his dustless mahogany desk.  I briefly peered out towards the Silicon Valley hills through the shades of the window behind him before he lifted his brow from thought.  He muttered cautiously, "That's a good question…" and placed his chin on his hand in the universal position for "I don't have an answer for that yet."

He wanted to tell me something but the way his eyes focused into the distance, you could see a little fear, as if to say, "People will think less of me for saying what I'm really thinking."   

I'm not judgmental and I don't remember saying anything at that point, just tilting my head to the side a little.  But what I got back, I never would have expected from this formal and staid lawyer.

"I WANT A HOUSE!" he exclaimed.  "I want a place where the neighbors respect where we live.  If they see trash on the ground, they pick it up because they feel ownership.  I want to live in a place where I don't have to be ashamed to say, 'I live here.'  I want my neighbors and I to be peers and for them not to look at my car and go, 'Who does he think he is?'  I want my wife and kids to feel important.  I want to be able to carry on a meaningful educated conversation with the people living around me.  I WANT A [ed. deleted] HOUSE!"

That joke one of my clients made about me being an iceman must be partially true because with a hint of a smile in my expression, I winked a little and asked in an ironic, almost dry manner, "So, what did you want again?"

Home Search Criteria People Don't Like to Say Out Loud

I wanted to share this conversation because it's critically important when buying a house.  There are things people never say they're looking for during a house search, but actually really need.  This gentleman was brave enough to share some with me:

1/  Prestige.  This is a really sensitive subject.  On the one hand many people want to be regarded and respected.  On the other hand, people fear that by wanting to be regarded and respected, that people will actually think less of them.  But the root cause is that sometimes people judge others based on a mental picture of where they live.  What do you think of when I say New Jersey or Alabama?  Or East Palo Alto?  (I'm from Louisiana: insert stereotype here!)  If prestige is important to you, then that should be included as a criteria in your home search without emotional prejudice.

2/  Owner's Mentality.  I have a personal story here, all this over a simple piece of paper.  I lived in a large apartment complex that was in a good location, was kept in decent condition, and had below market rents so I could save money and buy a house.  I stepped out of the elevator next to the trash chute and noticed a crumpled piece of paper lying there on the ground.  As a renter, my first instinct was, "Oh, the maintenance people will take care of it."  I eventually did throw that paper away but it left me wondering whether I would have thought twice if it were in front of the home I lived in.

3/  Neighborhood Pride.  Have you ever been to a sleepy old manufacturing town whose plant closed long ago?  Where people can't wait to find a way out?  Or a town that's languishing under the weight of its own lack of culture.  The transient nature of people living there is much different than the sense of community an identity engenders. 

4/  Belonging.  Whether it's being close to the culture of your parents or your parent's parents, to feeling like you can relate to your neighbors, that sense of belonging can be very important to your enjoyment of your home.  Sometimes it doesn't even boil down to culture.  If you're single, living in a family community with lots of kids around may not be preferable to being closer to other singles whom you can relate to.  And being a movie junkie with a huge home theater system (read: speakers) in the middle of a complex of semi-retirees might not make you any friends.

5/  Less competitive schools.  Some parents, even though they care about their children's education, don't want to put that much competitive pressure on their kids.  This is one I hear with increasing frequency. 

Common Trade-Offs

After we left the top-floor townhouse owned by the gentleman at Cisco, I told my client that, yes, you can have your dream house, but only if you know what's really important to you.  After all, since homes are so expensive, you don't want to have to pay for amenities and benefits that mean nothing to you.  Why would you spend your hard-earned money on something you don't need or want?

Here in Silicon Valley, people make trade-offs every day when buying real estate but it takes a lot of self-reflection and some experience actually going through the home search process for those priorities to really become clear. 

Single-Family vs. Multi-Family Properties

"Maintaining the lawn just sounds like work.  If I'm going to be doing work, it may as well be for work!" he said.  The land you get on a single-family house is valuable but if it hurts your lifestyle, then what are you paying for? 

According to RE InfoLink, in February 2007, the difference between buying the median townhome or condominium and the median single-family is between $200,000 and $300,000 in both Santa Clara County and San Mateo County. 

My client in this article chose to look for townhouses and condominiums because he can get more square footage inside the home for the same money and minimize the responsibility he has for maintaining the property.  He doesn't have any kids or need room for a swing set, but if he can get a small yard or patio for entertaining, that would be perfect.

Schools

Ever hear the advice, "You should always buy a home where there are good schools?"  There are advantages to this because these are neighborhoods which are (in general) the last ones to decline and the first ones to appreciate, but remember that if the neighborhood has a reputation for good schools, that reputation is already priced into the house. 

My client used the words, "I'm single and this isn't my last house.  Why would I want to pay for a good school district?" 

If you have school-age children, you may save money by buying in a less expensive neighborhood and sending your kids to private schools.  You will get more house for your money if you don't have to pay for the school district's reputation.  And you may get more upside from an ascending school district which is building a great reputation than one that's maintaining its high scores.  When the best kept secret in the area comes out, people will be looking for that good value.

Cupertino and Palo Alto, among other cities in the Bay Area, have prestigious school districts.  How do the median prices for single-family homes compare with other cities around Silicon Valley?  The chart of figures from February 2007 speaks for itself.  What are the best kept secrets in Silicon Valley?  That's a whole 'nother article.

Commute

I had a client say that he enjoyed a reasonable commute time to be able to "switch modes" and another wanted to catch up on reading while on the train.  I'd argue that most people consider commuting a necessary evil based on where they live and work.

Time is money, right?  Well, almost, because no matter where you were born, what your parents have, or what your opportunities are, everyone starts off with 24 hours in a day.

You can measure the value of your time in two ways.  Economists measure the value of time in terms of opportunity cost, the amount of money you can make with your time at its highest and best use.  Most people measure it in exactly the same way except with things they can be doing: activities like spending time with the family, and reading a book, to taking a second honeymoon. 

You'll have to help me determine the value of your second honeymoon, but I can show you the cost of your commute.  Let's say you've live in your home for five years and take the same commute each day.  You earn a conveniently round number $100,000 and work 50 weeks out of the year for 5 days a week.  Here's what your commute costs:

At only half-an-hour each way, the commute costs $62,500 over that period and $125,000 if your commute is an hour (two hours a day) each way! 

There's no value judgment behind these numbers.  Some people want to save money to keep their families fed, happy and well-educated so they will trade more commute time for cash savings.  Others prioritize spending more quality time doing other things and choose to allocate more resources to the problem. 

The beauty is that the choice is up to you and experiencing a house search with an expert is an effective way of truly understanding what you want and what you're willing to trade-off.

(c) Steve Leung for the Silicon Valley Real Estate Blog at 1SiliconValley.com

Recommended Reading:

• The Price of the Home Across the Street and Its Long Shadow
• Why the Perfect House Wasn't So Perfect
• Why You Need Real Estate Agents and Why You Don't Trust Them
• Silicon Valley Real Estate Buyers Guide
• Search MLS for Silicon Valley Homes