The Numbers Tell a Mixed Story.
In the recent San Carlos 2011 Real Estate Mid-Year Report, we discussed an interesting trend that has developed this year with respect to San Carlos real estate — namely, that the number of homes sold is up dramatically from last year, but the sales prices are not following suit. It’s a remarkable trend that mirrors the schizophrenic behavior of our general economy right now. Some things are up, and some are definitely not.
Several readers have subsequently asked if that trend was mirrored in the sale figures for the White Oaks neighborhood of San Carlos. Great question! The short answer is yes…but the numbers make it look far more worse than it really is. Let’s take a closer look…
Home Sales Way Up.
First, the good news. Like the rest of San Carlos, the White Oaks and Oak Park neighborhoods of San Carlos saw a huge spike in both pending and closed home sales in the first half of this year, compared to the same period last year. Take a look at the following familiar-looking chart:
The same trends that we discussed in the mid-year review are on display in dramatic fashion in White Oaks. Consider the following from these figures:
- Pending Sales increased by 95% in the second quarter of this year, compared to the same period in 2010. The 18 homes that pended in April represented 44 % of all homes that went pending in San Carlos that month, and is nearly as many as went pending in the entire second quarter of 2010. For the year-to-date in 2011, pending sales are up a whopping 42%.
- Closed Sales weren’t far behind, as they increased by 74% in Q2’11, and were up 43% year to date in 2011.
Average Home Price Doesn’t Follow.
Much like the rest of San Carlos, White Oaks and Oak Park did not see the same upside in home values. The following charts may be extraordinarily depressing if you own a home in White Oaks:
And the following chart shows the median prices for White Oaks and Oak Park:
What do both of these charts tell us?
- Average Sales Price dropped a shocking 16.3% in the most recent quarter (April-June) — a much bigger drop than was experienced by the greater San Carlos market during the same period.
- Median Sales Price also dropped by 11% in the same period.
What’s up with these numbers? Is the bottom falling out of the White Oaks real estate market? Absolutely not.
Two Homes Wreak Havoc on the Numbers.
Part of the danger of running statistical analysis on a relatively small sample size is that a couple of extraneous data points on either extreme (high or low) can really skew the outcome of the numbers — that phenomenon is definitely at play here. Back in May of 2010 (the red circle in Figure 2), two homes sold in White Oaks no more than a week apart from each other. If you were watching the market back then, you’ll remember when 2033 White Oak Way sold for $2,005,000 and 1340 Orange Avenue followed only a week later at $2,050,000. Well, $2 million home sales are a rarity in White Oaks, considering that the average house price less than half of that figure, so getting 2 in the same month is akin to lightning striking the same place twice. And that lightning lit up the numbers in Q1 of 2010. Removing those two homes brings the drop in the average sales price back into the single-digit range, which is much more in line with the overall performance in San Carlos over the same period.
The real estate market in White Oaks emulated the rest of the San Carlos market pretty closely in the first half of this year, although the paradox that we’ve been discussing about increasing home sales versus declining home prices was a bit more pronounced than the rest of the city. There is still a very strong demand for homes in White Oaks, and this should keep the pace of sales running high for the near future. Over time, I believe this demand will help push pricing slowly upward, which is good news for sellers.
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