An Increase Over 2015.
There are very few metrics that have as much impact on the local real estate market as the number of new listings. The whole relationship of supply versus demand has more influence on local housing prices than any other statistic that we follow. For at least the past 5 years, while the demand for housing along the Peninsula has steadily increased, the number of new home listings in San Carlos has been on the decline. That paradoxical combination has been the primary catalyst behind the skyrocketing home prices in San Carlos, and also in adjacent communities.
I have written several articles on this subject, and I have closely tracked the trend of listings over time. I started to notice right around May of this year that the 5-year skid in new listings was starting to reverse itself. We had a two month surge in new listings that put the San Carlos real estate market on track to beat the performance in 2015 — making for the first year-over-year increase in nearly a decade. As you will see below, that slight upward trend has continued since that market inflection hit in the Spring.
The chart below should be familiar to readers of the blog, since I have used this exact format to track new listings for both single-family homes and townhouses in San Carlos.
This chart shows the number of new listings in San Carlos through the end of August for 2016, and compares it to the same time period for each of the past 5 years. While 2016 is not near any sort of record breaking pace, it’s still significant in that it represents a double-digit increase from 2015. Even though the increase is a modest 14% for single-family homes, and a more significant 19% for townhouses and condos, the impact on the market has been unmistakable.
Since the May time frame, the urgency of home buyers has seemed to gone down a notch or two. Homes that would have garnered multiple offers in the first quarter are only getting single-offers — or in some cases, no offers. The local economy not withstanding, the increase in inventory has given San Carlos home buyers a sense that the playing field is becoming a little bit more level, and they may not have to jump at the first house that comes on the market. That sense of deliberation is very obvious to listing agents, as their homes are taking just a little bit longer to sell.
For San Carlos home sellers, this inventory shift has highlighted the importance of how their home is perceived on the market. Gone are the days when any pile of lumber was guaranteed to get multiple crazy offers (the exception to that rule still applies for prime lots in the flats). Overpriced listings, and those with “challenging” features have been absolutely punished over the past few months — something that we’re simply not accustomed to seeing in San Carlos.
So as we head into the Fall real estate market, I will continue to keep a close eye on new listings and update the chart above again in a couple of months. With a twitchy economy, and a Presidential election only two months away, the landscape may look very different when I run the numbers again.
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