Home Prices Climbing from 2009 Levels.
Ask anyone who has been shopping for a home in San Carlos over the past few months, and they’ll tell you they’re getting a sinking feeling that home prices are climbing right before their eyes. Their gut-feel certainly seems to be well-founded. It seems that prices on nicely remodeled 3BR/2BA homes – the bread and butter of much of White Oaks and Howard Park — that were selling in the mid $800’s – low $900’s just last year are now routinely selling over $950,000.
It turns out there is legitimacy behind this perception. We’ll take a look at two common metrics — Average Sales Price and Average Price/Square Foot — to see what’s actually happening in San Carlos so far this year.
Average Sales Price.
A couple of interesting things to note from these numbers:
- Sold prices from Feb-April of this year increased sequentially each month, jumping 18% for the period. (January 2010 was an anomaly, as only 3 homes sold in that month.)
- Sold prices year-over-year climbed 4.8% and 9.5%, respectively, for March and April.
- List prices are up slightly year-over year.
Does this mean that just more bigger, more expensive homes are selling? Not necessarily. Let’s take a look at another metric….
Price Per Square Foot.
Another way to look at the data is to “normalize” prices to common denominator — in this case, square footage.
This data mirrors the behavior of the raw sales price data in the first graph. The table above shows a sequential increase in the past month 4.4%, and an annual increase of 7.8%, just looking at April numbers.
What’s the Cause?
Chalk up much of the spike in pricing to an imbalance in supply vs demand. Inventory still remains below average for this time of year (we’re at 50 active listings, versus 66 a year ago.) Consequently, more buyers are competing for fewer homes, which results in multiple offers and homes selling above list. Throw in a healthy dose of low interest rates, and it creates more buying activity for fewer homes.
This means the days of finding a “bargain” in San Carlos are likely over for the near term unless you’re willing to circle back and take another look at a listing that may have been languishing on the market for an extended period — most likely because it’s priced too high. You many encounter a seller who is now more receptive to negotiating than perhaps they were when they first listed.
So your gut feel seems to be legitimate — prices are indeed on the rise in San Carlos. It’s important to keep this in mind when you sit down to write up the winning offer on your new home.
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