That’s the analogy that keeps coming to into my head when I try to relate to others what’s happening right now in the San Carlos real estate market — it’s absolutely on fire. (The worst part is that I can almost imagine Alicia Keys singing the melody.) For those of us who have lived here long enough to remember the boom markets of 2000 and 2007, we often catch ourselves looking back at those periods time and saying “Prices will never hit those unthinkable levels again.” Well guess what? The stratospheric climb we’re seeing in home prices right now in San Carlos is going to make the market of 2007 look like a harmless blip rather than the precipitous cliff that it appeared to be when the market tanked in 2008.
Many people were stunned when I posted the closing price this week for 437 Hillcrest Road on the White Oaks Blog Facebook page. In case you missed that post, this home sold for $2,500,000 — or a cool $501,112 over the asking price. I’m not sure if people were shocked that a house sold for $2.5M on Hillcrest, or that a house fetched a $500K premium over the asking price, … or both.
But regardless of the reason, if that little nugget took your breath away, then you’d better be sitting down — because more of these “wow” moments right around the corner way. If the buzz on the street about the recent sales at 878 Knoll Drive and 917 Rosewood Avenue are even remotely accurate, you’re going to have a very different reaction depending on whether you’re selling a house in San Carlos, or trying to buy one.
(At the risk of sounding like a shameless plug, if you are indeed interested in getting daily updates on San Carlos home prices, be sure to follow to follow the White Oaks Blog Page on Facebook.)
Buyers were encouraged a few weeks ago when there was a much-needed spike of new listings in San Carlos. The hope was that this would add some balance to the market and settle things down a bit. Nothing could have been further from the truth. In reality, it seemingly had the effect of throwing fuel on a bonfire. Multiple offers still abound, and sales prices are skyrocketing to unbelievable heights, despite the fact that more homes are for sale.
This puts a huge hurt on buyers who are trying to find a home in San Carlos. Even if they can stomach the 20-30% premium over the asking price for a house they may or may not even love, they’re getting blasted out of the water by all-cash offers from buyers who are seemingly oblivious to the value of these homes. It’s a market unlike anything we’ve seen in history.
Buyers who have given up on finding a home in San Carlos aren’t finding much relief in Redwood City or Belmont either. Although the sales prices might end up slightly lower than in San Carlos, the same intense market conditions are in place in these communities too, and in some of the most unlikely neighborhoods. Buyers no longer seem to care about school districts or scores – they just want a roof over their head, and they will pay dearly for it. Those two cities have had their own share of “wow” moments these past few weeks that are no less remarkable than what we’ve seen in San Carlos.
Sellers couldn’t be happier with the current market conditions — unless, of course, they plan on buying another home in this area. Not only are homes fetching unthinkable prices, but sellers are able to dictate the terms completely in their favor, and can even secure extended rent-backs while they get ready for their move, often at no cost.
The big problem that is causing much of this price inflation is that there’s simply not enough homes for sale to satisfy the demand. Despite the lack of chronic lack of inventory, there were 16% more listings during in first two months of this year than there were during the same periods in both 2012 and 2013. But that increase is not nearly enough to put a damper on this runaway market.
These conditions are forcing some longer term sellers who were thinking of selling in the next 1-2 years to completely rethink their strategy. Some are seriously considering the option of selling now to capitalize on the market conditions, and simply renting somewhere locally for their remaining time here.
$2M Now, $3M Later?
It used to be newsworthy when a home fetched over $2M anywhere in San Carlos. Now, with older homes being razed and remodeled at a dizzying pace, get used to seeing a “2” at the front of the listing price more often than you ever imagined. There are two spec homes being built on the 100 block of Kelton Avenue, and rumor has it that they will be asking in excess of $2.5M. And there will be others right behind it.
This begs the question — when will $3M homes dot the landscape of San Carlos? There have been only 5 homes in the past 14 years to break this mystical number. But the way things are going right now, that price range will be a lot more common in San Carlos before too long.
Brace yourself, San Carlos. This is going to be a wild ride… and it’s far from being over.
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