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Downtown, the new suburbia

Larry Rosen | October 21, 2011 | Story Real Estate

“It was a choice between having a great view of life or actually living it,” says computer scientist Gary Boone, who recently made the decision that more and more Bay Area home buyers are making: to move downtown. He and his wife, Laura Dansbury, had lived in Cupertino and, before that, Atlanta—both places more suburban than urban—and knew that this time around, downtown Burlingame was more their style. “Why be isolated when the Bay Area is littered with beautiful little towns?” Boone asks. “Also, commuting to work is now a nice walk to the train station, or a ride on the Google bus, instead of a white-knuckle traffic-jam drive.”
For decades, people ignored Petula Clark’s famous antidote to loneliness and holed up in the hills around San Carlos, San Mateo, Palo Alto, and Oakland, enjoying the views and considering the long, twisting drive to Safeway the price of doing business. But realtors around the Bay Area are reporting a growing preference for what urban planners call transit-oriented development. Large-scale TOD projects are on the books or already completed in several Bay Area cities, even humble Millbrae, where a pair of large condo complexes are tempting buyers with proximity to both BART and Millbrae’s small city center.

The recession has played havoc with long-term real estate data, but a look at the peak of the market, in 2007, suggests that some of this downtown activity corresponds to a lull in the hills. Indeed, in the second quarter of that year, 87 homes were sold in San Carlos, compared with 57 in neighboring Belmont, a hilly, almost exclusively residential enclave with historically similar home values. (Alain Pinel realtor Chuck Gillooley notes a particular increase in San Carlos’s close-in White Oaks neighborhood.) But now, four years later, San Carlos’s total sales have held steady while Belmont’s have dropped by 18 percent, to 47.

Farther south, in Palo Alto, a similar trend has appeared, albeit in a comparison of losses rather than gains (that’s how you do it in a down housing market). Since the first quarter of 2005, Palo Alto has lost 26 percent of its total sales, but sales in Los Altos and Los Altos Hills have fallen by 31 and 42 percent, respectively.

The story is somewhat different in the East Bay, where the supply of “beautiful little towns” is limited, the hills underwent an almost complete makeover following the firestorm of 1991, and the challenges of urban public schools are always foremost in buying families’ minds. But anyone who does make the urbanward move will get some rewards. “You have a much stronger sense of community when you get out of your car and walk,” says Dansbury. “You look people in the eye and smile.”

Other Extreme Real Estate stories:
The big squeeze
Foreclosure, a love story
Best laid-aside plans
The last housing boom standing
$150,000 for a $1.5 million home?
Shameless movers & shakers


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