Condos Help Foster City Housing Market Bounce Back

I was all set to take myself to task . Last week, when the MLS released its single-family residence sales data for last month, the Foster City column looked, well, anemic; only eight homes sold, tying it with Woodside for 14th in San Mateo County. Mimicking the activity of Woodside is not exactly proof of a mad spring rush.

Those eight sales did represent four times the homes sold in February (two), but an increase of only one over January’s seven. Foster City did this as the county as a whole was posting an increase of 65 percent in sales activity from February to March. Last month, 366 homes were sold in San Mateo County, its highest total for March since 2008. “What about Foster City?” I thought.

Then I looked at condominium sales. Foster City, I was reminded, has one of the Peninsula’s most robust and active condominium markets. Condos are its bread-and-butter. In March, Foster City ranked third, countywide, with a dozen condominium sales, and fourth with an average condo unit value of $548,416. 12 sales are 33% more than the figure for January (five total sales) and February (four) combined. If you add Foster City’s single-family home performance to its condo/townhouse activity for March, you get that notably increased buzz in the spring market. They total 20 properties changing hands for the month, an increase of almost 300% from February and 180% from January.

I exhaled with relief. Foster City was back.

As a planned community, Foster City has always placed an emphasis on mixed housing types. As of 2000, the tail end of Foster City’s last sustained growth period (the next one awaits, ready to begin the minute someone decides – finally – what to do with a few large empty parcels of local land), condominiums and townhouses made up 48% of the town’s housing units: 1,885 condos and 2,205 townhouses, versus 4,569 single-family homes. SFRs took up the most Foster City land -- 24.69% -- while condos and townhouses combined to cover 17.03% of what remained.

Notably, Foster City has achieved this balance while managing to dodge most of the potential pratfalls involved with having a large condo-dwelling population. The increased density that comes with multi-family dwellings has not produced a high crime rate or unmanageable traffic on city streets. Affordable housing opportunities have been built into existing (and proposed) developments through the city’s Community Development Agency.

Where Foster City’s residential balance might come into play is when it comes time Foster City may seem a parents’ paradise, but only 28 percent of its population lives with children under 18. Convincing the other 72 percent -- many of whom live in all those condos (and apartments) – to get on board will be a challenge. Last week, the San Mateo-Foster City District had to borrow money to pay its staff, thanks to the state budget imbroglio. Will this makes passing a bond to raise money for a new school easier (because of sympathy?) or more difficult (because of residents wanting to see the district get its house in order before it begins a new project?)

Whatever the long-term outcome of Foster City’s efforts to build a new school – and no, I haven’t been able to uncover any data showing the impact of good public schools on condominium values versus SFR values – Foster City’s healthy condominium market is another of the many elements that separate it from neighboring communities. The city’s density (6,739 per square mile) is more than twice that of Burlingame, 70 percent higher than Belmont and San Carlos. It’s matches most closely the density of Redwood Shores, which is unsurprising, as the two communities are almost mirror images of each other.

As much of a relief 20 total sales for March, 2011, is to the real estate community, it’s worth noting that March of 2010 was one of the busiest months for condos since before the crash. 18 units changed hands that month, compared to 13 for February and January combined. The town followed up with 10 in April, 17 in May and 13 in June, while moving a total of 28 single-family homes during the same period. Keep an eye on that condo market; it can tell you more about Foster City real estate than you realize.