A Shortage of New Listings?
By far the hottest topic in the San Carlos real estate market today, aside from the eye-popping prices that homes are fetching, is the incredibly low inventory that buyers have to choose from. This is probably the single most frustrating aspect for buyers in this market — they’re ready to spend the money and even stretch their budget if needed to get the house they want, but it seems like there’s simply nothing to buy. The finger of blame for this historically low level of inventory has long been pointed at the lack of new listings to come on the market. After all, when was the last time you saw 8 homes for sale in the entire city? That’s exactly what we had for a good part of last week.
But is this really the reason why the inventory of homes for sale in San Carlos is so low right now? Are we really seeing fewer listings than we have in past years? Or is it because homes are selling so quickly that we can’t build up any appreciable inventory?
I did a little data mining, and what I found was a bit surprising, to say the least. Take a look at the chart below:
This custom chart shows two key metrics for the combined months of January and February: Number of New Listings, and Average Days on Market. I also pulled this data for the exact time period over the past 6 years for the purpose of comparison. There are some very interesting take-aways from this chart that should really reset some perceptions about this market:
- Number of Listings in 2013. Although we’re certainly below the historical average for new listings so far this year, the 44 new listings that hit the market in Jan-Feb of this year is virtually the same amount we had last year at this time. And it matches the total in 2010 as well. So is there really a dire shortage of new listings? Not really.
- Average Days on Market (DOM). So far in 2013, the average days it took for a home to get into contract is 21 days — that’s a whopping 71% drop from this time last year, and the lowest figure for Jan-Feb in the past 6 years. And the 21 days is a bit deceiving, because as we’ve discussed a number of times on this site, well-priced listings in good locations are only taking 7-8 days to sell. Sometimes less.
It’s a Combination of Both.
So contrary to what many of us have been thinking all along, the shortage of inventory of homes for sale in San Carlos is not caused solely by a lack of new listings. While the number of new listings is still a bit below the historical averages, it’s not abnormally low compared to the past few years. No, the big contributing factor is that everything is selling almost soon as it hits the market, and in the end analysis it’s a combination of both that makes it seem like there’s been nothing to buy this year in San Carlos.
And that’s the real picture of the home inventory situation in San Carlos right now.
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