Time to Up-Size.
Much of the attention in the San Carlos real estate market tends focus on the “entry-level” range of homes, which is roughly defined as 2 or 3 bedroom homes that sell for under $1M. And that’s understandable, since that specific segment accounts for the highest unit volume of home sales in the city every year, and the relative health of that sector is a good indication of what’s happening in the broader scope of our real estate market.
But not everyone who sells a home in San Carlos leaves San Carlos. Homeowners who have lived in the same home for 5-10 years often outgrow their digs, especially those with a growing family. Not wanting to leave San Carlos, they’re faced with the decision to either increase the size of their current home, or find a larger “move-up” home right here in town. (We faced that same decision about 11 years ago, and opted to stay put and remodel.) But not all of these entry-level homes are good candidates for expansion. Some are on small lots which severely limit the ability to add square footage. Others may be on a street where it simply doesn’t make economic sense to build a big, new house. Whatever the reason may be, there’s always a contingent of move-up buyers in San Carlos who are looking to stay put in the City of Good Living.
With a strong resurgence in the entry-level real estate market like we’ve seen in the first half of 2011, one would expect there would be a ripple effect for move-up homes — those with 4 or more bedrooms, and are generally priced in the $1M-$1.5M range. And that indeed appears to be the case. Take a look at just a few of these examples from just the past couple of weeks — click on the addresses for more details and pictures:
- 1385 Cedar Street: 4BR, listed at $1,395,000 — Pending sale in 1 day.
- 3443 Brittan Avenue: 5BR, listed at $1,275,721 — Pending sale in 7 days.
- 101 Aberdeen Drive: 4BR, listed at $1,278,000 — Pending sale in 5 days.
- 11 Dickens Court: 4BR, listed at $1,198,000 — Pending sale in 6 days.
- 1017 Walnut Street: 4BR, listed at $1,099,000 — Pending sale in 7 days.
Granted, there’s no way of knowing how many of these specific examples are being purchased by San Carlos move-up buyers. But it serves to illustrate that this segment of the market is moving as fast as it ever has in the past 5 years. The same positive effects that are fueling the entry-level market are also helping boost sales here. We’ve talked many times about how attractive loans have been in the conforming range ($727,750 or less.) But recently, jumbo money has been back in favor again, as several banks have been writing 30-year fixed jumbo loans at $1M for under 5% — and no points! When was the last time you saw that?
This is a very healthy sign for the San Carlos real estate market. We’ve always said that the entry-level market is a catalyst for the rest of the market, and the strength of that sector is helping the group of homes right above it.
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