Recession? Down Market? Those terms don’t seem to apply when it comes to the market for San Carlos homes below the $1M mark. There seems to be an insatiable demand for homes in this price range, especially ones in “move-in” condition in the White Oaks and Howard Park neighborhoods. Here’s a sample of some recent home sales in just that past month — click on the address for more info and property photos:
- 2056 Eucalyptus Avenue: 3BR/2BA. Listed for $899,000, sold for $925,000 (+2.9%) Sold in just 3 days with multiple offers
- 121 Sunnydale Avenue: 3BR/2BA. Sold at the list price of $899,000 in just 3 days.
- 2043 Saint Francis Way: 3BR/2BA. Listed at $899,000, sold for $935,000 (+4.0%) Sold in just 13 days with multiple offers.
- 2064 Eucalyptus Avenue: 3BR/2BA. Listed at $839,000, sold for $844,000 (+0.6%) Sold in just 5 days.
- 2120 Belmont Avenue: 3BR/2BA. Listed at $909,000, sold for $976,000 (+7.4%). Sold in 8 days with multiple offers.
Why is this happening?
What’s causing this seemingly counter-intuitive buying spree? In the midst of a recession, why are homes getting as many as 8 offers? There’s an interesting mix of events in play right now that is keeping this segment of the market white hot.
- Demand: Let’s face it, people still want to live in San Carlos! Despite all the doom and gloom about the budget woes, San Carlos remains a highly desirable place to live. White Oaks and Howard Park are in hot demand because they’re in the flats, they have great schools, and are within close proximity to downtown.
- Supply: Or in this case, lack thereof. It’s basic Econ 101 — if you more demand than supply, then prices rise. And that’s what’s happening right now. Care to guess how many homes below $1M are currently for sale in White Oaks and Howard Park? How about 3? So if you have 8 people competing for just one house, you already have far more buyers than available homes.
- Financial Incentives: What a difference a year makes. At this time last year, we were reeling from the biggest credit collapse in recent history. Now, rates are at historic lows and money is relatively easy to get. With the conforming loan limit of $729,750 extended throughout next year, buyers have a ready pool of funds get a home in the low $900K range with 20% down.
Is Everything Selling This Quickly?
It’s important to note that despite the examples above, we’re not returning to the crazy market of 2005 where seemingly anything and everything sold immediately and above list price. There’s a common thread that is shared by the 5 examples I outlined above: They’re all “traditional” size and style homes that are essentially in move-in condition. In other words, they’re not fixer-uppers, or half-size lots, or in poor locations. As I have discussed in previous posts, the average days-on-market for all homes currently for in San Carlos is still around 150 days (or basically 5 months.) So not every market segment is seeing this kind of demand.
Will It Continue?
From every indication I have seen, this super-heated market will continue into the first quarter of the new year until the current crop of buyers are able to land homes. And that won’t happen until this huge disparity between demand and supply starts to balance out. With only 25 homes for sale in all of San Carlos right now, there’s clearly a need for an infusion of new inventory. If you’ve got a home in White Oaks or Howard Park that you’re thinking of selling that’s similar to the ones described above, now is an incredibly good time to get it on the market.
On that note, I have a new White Oaks listing that will be coming on the market the first week of January, and it’s a stunner. Stay tuned for more details next week!
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