Just a few weeks ago, the National Association of Realtors released a report that revealed a startling drop in the number of pending home sales nationwide in the month of April. According to this report, after several months of steady gains, the number of homes that went into contract across the U.S. in April 2011 dropped 11.6% from March 2011, and was down by a whopping 26.5% from the year-ago period of April 2010. That precipitous drop took analysts by surprise, and cast some serious doubt into the recovery of the housing market nationwide.
Those numbers certainly took me by surprise, because April certainly seemed like a crazy month in the world of San Carlos real estate. I know that I was certainly busy throughout April, and other colleagues that I spoke with who focus on the San Carlos market confirmed my sentiment as well. So what happened in San Carlos in April? As it turns out, it was quite a different story.
A Surge in San Carlos.
The performance of the San Carlos real estate market in April 2011 was in stark contrast to the gloomy numbers in the NAR report. Take a look at the following graph:
The red line in the graph maps the pending sales of single-family homes in San Carlos on a monthly basis. Not only did the number of pending sales not drop in April like the rest of the country, but they rocketed upward to 42 pending sales, which represents a 40% increase over March 2011, and a quantum leap of 75% over April of 2010. In fact, the 42 pending sales in April of 2011 was the highest number of pending sales for any month in San Carlos since June 2006. No drop here.
And even though the number of pending sales dropped about 21% from April to May of this year, May’s number of 33 pending sales exceeded any given month in 2010, and was the highest number of pending sales since October 2009.
The Bottom Line.
Reports like this from NAR, or from the ever-popular Case Shiller Index tend to garner headlines when there are significant swings in either direction in the nationwide real estate market. But San Carlos, like other desirable communities on the Peninsula, has always danced to the beat of a different drummer when it comes to real estate. This has been especially true in the past 4-5 years as the nation has battled to emerge from difficult economic times.
So while these reports are certainly informative, it’s important to take nationwide real estate data in its appropriate context, and sanitize it against similar figures for the local market. Failing to do this may inadvertently paint a much different picture than what’s actually happening in the local real estate market — and adopting a misguided understanding of the local market conditions can lead to costly mistakes when you’re buying or selling a home.
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