A Strong Start to the Year.
2010 was definitely a turnaround year for real estate sales in San Carlos. After two straight years of declining sales, 2010 marked the end of the current housing slide in San Carlos. Numbers trended upward in all of the key metrics — # of homes sold, average sales price, median sales price, etc.. So it was understandable that we were cautiously optimistic heading into 2011. The resurgent real estate market, combined with low interest rates and positive news on employment laid the groundwork for what could be a very robust year.
If you’ve been even remotely connected to the San Carlos real estate market over the past 3 months, you’d likely guess that this expectation was achieved, or even exceeded — and you would be correct. After a fairly tepid January, the market has been running in overdrive ever since. Multiple offers are back with a vengeance, and some homes are selling in the first week — without a single open house. While it’s not the same fever pitch that we saw back in 2005-07 when everything seemed to sell in a week with multiple offers, make no mistake — there’s a target category of homes in San Carlos that many buyers are looking for, and that is fueling the rebound of the market. Let’s look at the numbers in more detail…
By the Numbers.
When compared to the similar period in 2010 (which in itself was a good year) all of the key sales metrics are on the upswing in 2011, with one notable exception — inventory. For much of Q1, at any given time there was only 30-40 homes for sale in all of San Carlos. Only in the past few weeks have we been able to maintain a level close to 60. By comparison, in a normal year we would be closer to 70 homes for sale at the peak of the spring market. This imbalance of demand vs supply is what creates a prevalence of multiple offers and escalating prices.
From the graph above, you can see how pace of pending sales (the red line) really picked up steam in February and March of 2011, easily eclipsing the pace of 2010. In fact, according to this graph more homes went “pending sale” in March 2011 than any month of the previous year. That’s a good start to the year. Here’s another look at those same numbers…
|Key Metrics||Q1 2011||Previous Quarter||Year-over Year|
|Median Price||$980,000||$830,000 (+18.1%)||$868,500 (+12.8%)|
|Average Price||$975,006||$912,010 (+6.9%)||$922,456 (+5.7%)|
|No. of Sales||44||65 (-32%)||36 (+22.2%)|
|Pended||63||53 (+18.9%)||54 (+16.7%)|
|Sale vs. List Price||98.5%||98.0% (+0.5%)||98.9% (-0.5%)|
|Days on Market||32||43 (-24.4%)||35 (-8.0%)|
Here’s another look from a higher level of the year-to-date closed sales, compared to previous quarters. Clearly, the market is on an upswing.
Will this pace continue? Will sales remain strong in the 2nd quarter of 2011? Those are questions that buyers and sellers alike in San Carlos are wondering. I think it’s a pretty safe bet to answer “yes” to both of those questions. If you follow the San Carlos Real Estate Week in Review series on this site, you already know that April has been an insanely busy month for new listings and pending sales. The momentum that started in Q1 is clearly carrying over into the current quarter, and I think when we run the numbers again after Q2 the results will be very similar.
One factor to keep a close eye on is interest rates. One of the by-products of a strengthening economy is higher interest rates. The current rates for the most popular loans — i.e. the 30-year fixed high-balance conforming loan of $729,750 — have been creeping upward in the past few weeks. While we grew accustomed to seeing this loan in the high 4% range for a long time, it’s now sitting in the low 5% range. If there’s a single factor that can cool the growth of a hot housing market, this is definitely it. It will be interesting to see where key rates go over the next quarter.
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