As we head toward the end of what has been one of the most remarkable years in local real estate in recent memory, those who are still in the market — either buyers still looking to buy, or sellers thinking about listing — are looking at the calendar and asking the same question:
What’s going to happen the San Carlos real estate market in 2014?
Anytime a market experiences such a dramatic inflection like we experienced in 2013, it significantly changes the dynamics of how the entire market behaves going forward, and that’s very much going to be the case in the new year. So what will happen in 2014? Will the price of a home in San Carlos continue to rise at a seemingly unstoppable rate, or will prices stabilize? Will there be more listings than last year or less?
Over the next few days on the White Oaks Blog, we will tackle those questions in a 3-part series that will discuss three key factors that may significantly change the real estate landscape in San Carlos in 2014.
First up: Listings.
#1. There Will Be More Listings in 2014.
Contrary to what the paltry inventory of homes for sale in San Carlos seems to indicate, 2013 has been almost identical to 2012 with regard to the number of new listings of single-family homes. In fact, once the December numbers are factored into the graph below, 2013 will slightly edge 2012 for the number of homes to hit the market. The misconception stems from that fact that it took only half as long to sell the average house in 2013 (18 days) than it did in 2012 (35 days), so there was never the ability to establish any level of inventory. This made it seem like there was a big decrease in listings from 2012, when in reality there wasn’t at all.
Despite the fact that 2013 was roughly comparable to 2012, both years were significantly below the high-300 range of listings that you might expect in San Carlos in a typical year. Whatever the final tally turns out to be for 2013, it will be about 20% below the number of listings we saw in 2008 when the market took a dive.
But I believe this trend is finally going to change in the coming year, as more people will put their homes on the market in 2014 than they did in 2013. To understand why, you need to crawl inside the head of the typical home seller in San Carlos right now. As with any year, there is a significant number of homeowners in San Carlos right now who plan to sell their home sometime over the next 2-3 years. Whether they’re going to retire, become empty nesters, or simply are planning a change of scenery, they may not have a specific date identified, but it’s definitely on their timeline.
The big difference heading into 2014 is that this group of sellers has been warily watching the stratospheric increase in prices over the past 24 months, and they have to be thinking about when the growth rate in prices will finally subside and the market will effectively top out (this is a topic we will discuss later in the week). It’s akin to trying to time the sale of a stock or annuity to coincide with the top of a market.
Think: Profit Taking.
This kind of thinking has a significant influence on when people decide to sell their home. For those who are convinced that it’s going to happen in the next 12 months, they will likely sell their home during that time to maximize their profit — even if it means accelerating their anticipated timeline and renting for a period of time. Those who are simply sitting on the fence will also be thinking about when the time will be right to sell.
That in itself is going to have a positive effect on the number of listings that will hit the market next year.
Tomorrow: A Fast Start in 2014.
This series continues tomorrow on the White Oaks Blog with Part 2 where we talk about how and when the market will start off in 2014. Stay tuned!
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