Fall is always an exciting time of year in the San Carlos real estate market. It’s a rebirth of sorts, as buyers who are weary from battling the market for the first six months of the year return back to the game on Labor Day weekend after taking a hiatus in July and August. Smart home sellers clearly understand the annual ebb and flow of the real estate market, and wisely choose to avoid the slow summer months to list their home, when buyers are generally taking a break.
This usually sets the stage for an intense two months of buying and selling activity in September and October.
In past years, the buyers have certainly shown up after Labor Day weekend armed and ready. But with the super tight supply of available housing that we’ve experienced since the end of the Recession, there just hasn’t been the significant uptick in new listings to put a dent in the demand. So it was really just “deja vu” from the Spring market for many buyers.
But September 2017 was very different.
I started making mention on the blog as early as August that I had a strong feeling we were going to see a big surge of listings after Labor Day. The level of talk among agents, stagers, title reps, and property inspectors pointed to an unusually high level of upcoming activity. And my hunch was correct. If you’ve been reading the Monday editions of the San Carlos Real Estate Week in Review, or even just noticing the huge increase in “for sale” signs around San Carlos, you already know that September was a breakout month for single-family home listings in San Carlos.
There were no fewer than 53 new single-family home listings to hit the market in September. For a city that has grown accustomed to inventory levels in the low teens, this equated to a virtual flood. To put that number in perspective, there are two charts below.
The first shows the number of new listings for each month in 2017:
September has been far and away the strongest month for new listings through the first three quarters of this year, and I think that certainly shocks the conventional wisdom that would suggest May or June as the top listings months. But unless this trend intensifies in October (which is unlikely), September will go down as the most robust listing month of 2017.
I decided to look back at previous September listings stats to see how 2017 stacked up. The results were quite eye opening:
This graph shows the listing performance for just the month of September for every year since 2009. Clearly, 2017 blew away every other September, with a whopping 56% increase over the same period of just a year ago! And that run doesn’t stop at 2009. I ran the stats all the way back to 2000, and no other September surpassed the month that we just concluded.
So what’s up? Why the sudden surge in listings?
That seems to be the question that everyone is asking, and I don’t think there’s one answer that explains it. From talking to my own sellers and comparing notes with other listing agents, these are some of the reasons that people are selling:
- Fear of Missing the Top. The unprecedented run-up in housing prices in San Carlos since the end of the Recession has been well documented on this site. Some sellers who have the flexibility on when they can sell, especially those pondering retirement, have been biding their time and warily eyeing the market for any sign that the market might be starting to level off. I believe that over the summer of 2017, many of those tenuous sellers felt it was time to pull their chips off the table and not risk their profits. The recent world events, the super-hot economy, and the vivid memory of what happened after 2007 has many homeowners nervous about making the same mistake twice.
- Getting out of Dodge. If you listen to the vibe of people around San Carlos, many are simply fed up with the traffic congestion, astronomical housing prices, and the overall standard of living that their income can afford them here. Quite a few sellers lately are cashing out of the Silicon Valley dream to move to much more affordable places in California like Granite Bay or Rocklin, where $1M will buy you a mansion with a pool in a great school district. Oregon continues to be a popular destination for Bay Area residents ready to jump off the hamster wheel of Bay Area living.
- Aging Population: Unfortunately, a fair number of listings that hit the market in San Carlos in September were trustee sales, where the catalyst of the sale was the passing away of the owner. There were two of those on my street alone in September. In all of these cases, the successor trustees opted to cash out and take the profit from the sale of the home, rather than retain the investment.
Whatever the underlying reason may be, this huge increase in inventory has been a boon to home buyers in San Carlos. But unlike a similar but smaller spike that we saw in March of 2016 which really put a damper on the market, the September 2017 surge has barely had an effect on the bidding wars for good homes. In just the past two weeks, I have heard of two homes that got 10 and 12 offers respectively, and sold for at least 20% above the asking price. However, homes that I have always referred to as “fringe homes” — those in higher price ranges, or in less desirable locations — are definitely feeling the effect of increased competition.
Regardless of whether you are a buyer or a seller in this market, the phenomenon that we just experienced in September should be viewed as a positive, as it breathed some very much needed new life into a market that was literally choking on itself just a few months earlier.
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