Economy About San Mateo, CA

San Mateo is a vibrant city located in the heart of Silicon Valley, just south of San Francisco. With its prime location and bustling economy, San Mateo has established itself as one of the major economic hubs in the San Francisco Bay Area.

This article will provide an in-depth look at the various aspects of San Mateo’s economy, including major industries, employers, income levels, real estate, and economic outlook.

Major Industries and Employers

The economy of San Mateo is driven primarily by two major industries: technology and healthcare.

Technology

As part of Silicon Valley, technology reigns supreme in San Mateo’s economic landscape. Some of the major tech companies headquartered in San Mateo include Sony Interactive Entertainment, GoPro, NetSuite, and SolarCity. In addition, tech giants like Facebook and Google have established major campuses in the city.

The presence of these technology companies provides high-paying jobs and attracts a highly skilled workforce to San Mateo. Tech jobs account for over 15% of all employment in the city.

Healthcare

Healthcare is another pillar of San Mateo’s economy. The city’s two major hospitals – San Mateo Medical Center and Mills-Peninsula Health Services – are top employers in the region. Pharmaceutical and biotech companies like Abbott Laboratories and Salix Pharmaceuticals also have a significant presence.

Healthcare jobs make up over 11% of total employment in San Mateo. The industry provides stable, well-compensating jobs for thousands of residents.

Income and Wages

Driven by the thriving tech and healthcare sectors, incomes and wages in San Mateo are well above state and national averages:

• The median household income in San Mateo is $131,686, compared to $80,440 for California as a whole.
• At $109,592, the median family income is almost double the median for California families ($68,103).
• With a median per capita income of $59,407, individuals in San Mateo earn around 1.5 times more than the average Californian ($36,955).
• The average annual wage per job in the city is $102,123, significantly higher than the U.S. average of $66,665.

Clearly, San Mateo residents enjoy very high earning power, especially those working in high-paying tech and healthcare jobs. The affluence of the local population is reflected in elevated home prices and cost of living.

Real Estate

Bolstered by the strengthening economy and influx of high-income tech workers, San Mateo’s real estate market is red hot:

• The median home value in San Mateo is now $1.4 million. Prices have appreciated a whopping 15% over the past year.
• With a median list price of over $1 million, buying a home in San Mateo requires an income of $320,000 per year.
• The median monthly rent for a 1-bedroom apartment is $2,495, making San Mateo the 6th most expensive rental market in the U.S.
• The city’s vacancy rate stands at a paltry 3.4%, indicating a severely supply-constrained housing market.
• San Mateo ranks as the most expensive place to live in California based on the cost of living index. Groceries, utilities, transportation, and healthcare cost 15-25% more than the national average.

The rapid price appreciation has made housing largely unaffordable for middle and low-income families. Many workers commute long distances to jobs in the city.

Commercial Real Estate

Alongside the residential sector, San Mateo’s commercial real estate market is witnessing strong activity:

• Tech companies like Sony, Facebook, and Google are leasing large campuses to accommodate their growing workforce.
• New mixed-use developments like Hillsdale Terraces are attracting retail and restaurant tenants.
• Bay Meadows, a 83-acre transit-oriented neighborhood, has brought residential, office, and retail space near the Hillsdale Caltrain station.
• Overall office vacancy rates are around 14%, indicating high demand from tech and life sciences companies.
• Average asking rents for office space are $4.50 per square foot per month, significantly higher than the national average of $2.50.
• Retail vacancy rates are low at around 3%, with rents averaging $3 per square foot.

With constraints on new construction due to geographic and zoning limitations, commercial real estate will continue to benefit from the rapid economic expansion.

Economic Outlook

The economic prospects for San Mateo look bright over the next decade:

• Job growth is projected to average around 2% per year over the next ten years, adding over 15,000 new jobs.
• Tech, professional services, and healthcare will see the highest rates of job creation.
• Major planned developments like Bay Meadows II, Hillsdale Station, and Concar Passage will bring new employment hubs.
• Ongoing investments in public transit like the Downtown San Mateo Rail Integration Project will attract employers due to improved connectivity.
• Higher education institutions in the area like Notre Dame de Namur University and Silicon Valley University will supply tech talent.
• The highly educated population and proximity to venture capital will foster entrepreneurship and innovation.

However, housing affordability issues, traffic congestion, income inequality, and cost of living increases pose challenges to sustainable growth. Overall though, San Mateo seems well-poised for economic prosperity based on its knowledge-based economy and highly skilled workforce.

Conclusion

As the above analysis shows, San Mateo has a diverse, thriving local economy centered around technology and healthcare. High-paying jobs in these sectors result in exceptional affluence and real estate demand. Ongoing investments, planned developments, and population growth are set to foster continued prosperity.

While maintaining economic diversity and addressing housing issues remain priorities, San Mateo’s economic future looks bright. The city will continue to be a leading hub of innovation and economic activity on the San Francisco Peninsula.