Now there’s a headline that you can take to the bank.
Home prices have been on a steep climb upward in San Carlos and all along the Peninsula ever since we emerged from the real estate market crash of 2008. The average and median prices for homes in this area have grown substantially every year since then — in many cases the growth year-over-year has been in the double-digits. That means that if you had the intestinal fortitude to actually buy a home in San Carlos in 2008 or 2009, it has very likely doubled in value. That’s not too shabby of an investment, right?
To those of us who obsessively watch this market every day, there was a feeling toward the end of 2016 that we might finally start to see home prices leveling off in red-hot San Carlos. All the indications were there that the market might be slowing down – homes were getting fewer offers and were taking longer to sell on average. For the last three homes that I put into contract for my buyers in 2016, we were the only offers on each of these homes — and these were not dumpy homes on a lousy streets! When was the last time that happened?
On top of that, there was a lot of uncertainty coming on the heels of the unexpected results from the Presidential election, as well as the Federal Reserve’s stance that interest rates would definitely be rising in 2017. Because of all of these factors, it was quite logical to assume that perhaps the market had priced itself up to its maximum affordability limit, and that things might level off in 2017.
We could not have been more wrong.
The real estate market must have spent the holidays reloading the powder kegs, because 2017 started like it was shot out of a cannon. Buyers came into the new year armed with fat bank account, courtesy of a strong stock market and a robust employment market. This new buying power, combined with seasonally low inventory, served as the perfect catalyst fuel another climb in home prices.
Here is what the average and median sales prices looked like in Q1 of 2017, compared to the totals of previous years.
For the first time ever, the average AND the median sales price of a home in San Carlos surpassed the $1.8M mark. That’s right — the average price of a home in the City of Good living is almost $1,900,000 and the median is now over $1,800,000. Just to put that in perspective, in just 2011 the most expensive house to sell in the City of San Carlos was $1,800,000. That was barely six years go. Let that one sink in for a moment.
Both of these figures represent solid gains from just the previous year — the average price in just the first quarter of 2017 increased by 5.2% over the entire previous year, and the median price increased by 7.5% over the same period. And there seems to be no sign that prices will be abating any time soon.
Condos and townhomes fared very well during this period too. Most notably, the average price of one of these units increased 11% since last year and just surpassed the $1,000,000 mark for the first time in history. The median price increased at a respectable 8.6% to just under $1,000,000.
So where do things go from here? Unfortunately, for people who are still trying to buy into this market there is really no sign of home prices reducing or even just flattening out. The economy has absorbed a new presidency, a volatile but growing stock market, and several interest rate hikes — and yet it still keeps plowing ahead. I have always said on this site that the local technology companies are the fuel behind the housing market all along the Peninsula. This latest boom is fueled by solid companies like Google, Apple, Facebook, LinkedIn, and countless other solid companies that aren’t going anywhere any time soon. So as long as their business remains strong, home prices in San Carlos aren’t likely to go anywhwere…
Other than upward.
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