This post first appeared in the March edition of: Cirios Trends: In Search of Real Estate Opportunities.

This month’s zip code spotlight moves to what can truly be called the heart of the San Francisco Peninsula. Nestled between South San Francisco and Burlingame, San Bruno is a suburban haven only minutes from the city.

Homes in the area range widely in cost, from $1.3 Million dollar mansions on the hill to affordable, $300,000 row homes closer to the bay. In the midst of all this, a solid core of reasonably priced (by peninsula standards) homes provides an excellent alternative to more expensive south peninsula locales. The median listing price currently rests at around $650,000. For this price, homebuyers can get a reasonably large 3 bedroom home with a good sized lot.

With a housing stock largely consisting of homes built in the 1950’s and 60’s, opportunities abound for rehab investments. Foreclosure activity has been on the rise in the area of late, while prices seem to have leveled off somewhat. As you can see from the graph below, the moving average sale price for homes has actually increased slightly over the last 6 months. During that time, supply has come down from its spike in 2008 but is still slightly elevated from traditional levels, likely due to the increase in foreclosure activity.

What this means is that home values in the area are increasing despite downward pressure from increased supply. This is a good indicator for the medium term prospects of San Bruno real estate, as it indicates that demand is higher (relative to supply) than it has been traditionally in this area. If supply does taper off, prices should go even higher. In the meantime, we feel that price stability for this area is very likely, making rehab investments in the area quite attractive.