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The San Carlos Real Estate Week in Review: 3-22-14.

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For home buyers in this market hoping to make San Carlos their new zip code, this week’s report will seem somewhat analogous to driving past a car accident on the freeway:  You really want to look at it, but you might be sorry once you did.   The sold figures that are posted below will probably take a little bit of starch out of even the most die-hard home buyers, while at the same time making every homeowner in San Carlos feel like they hit the lottery.

Some of the recorded sales below are simply breathtaking, with premiums of over 40% paid to secure these listings.  But these huge differentials aren’t solely caused by the listings being under-priced to begin with.  The average price per square foot of the 8 sales that closed last week was $873 — an incredible price for San Carlos, and more akin to what you would have seen in Menlo Park a few months ago (they’re now at $1,000/square foot.)    So no matter how you look at it, it’s getting very expensive to live in San Carlos.

Here are the details from last week:

By The Numbers.

Below is a high-level snapshot of the market performance for single-family residences in San Carlos. This data is for the week ending 3-22-2014:

San Carlos Housing Data 3-22-14 Prior Week
Closed Sales for the Week: 8 5
Average Sold Price: $1,401,688 $1,727,600
Average $/Sq Foot (Sold) $873 $747
Sold Price vs Orig List Price: 119% 111%
Average DOM of Closed Sales 8 9
No. of Homes Pending Sale: 27 28
No. of Active Listings: 11 14
Average Price of Active Listings: $1,318,273 $1,355,429
Average DOM of Active Listings: 15 11
Average $/Sq Foot (List) $622 $706
Active-Pending Ratio: 0.41 : 1 0.50 : 1

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The San Carlos Real Estate Week in Review: 3-15-14.

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Every week is a different adventure in this wild real estate market.  It was a refreshing change last week for San Carlos home buyers to see that more new listings debuted on the market than there were homes that went into contract.  This was a a bit of a surprise to me, because I was predicted the exact opposite was going to happen and that we would be headed back to single-digit inventory again.   But I’m perfectly OK being wrong in this instance.  This runaway market needs desperately needs balance for its own good.

As I highlighted earlier in the week,  the amount that buyers are overbidding to get a home in San Carlos seems to increase every week.  All 5 of the sales that closed this past week commanded 6-figure premiums over the asking price, with two of them fetching a whopping 16% over list.  What makes this remarkable is that not a single one of these homes could be considered under-priced to begin with — in my opinion all 5 were logically priced, taking into consideration the characteristics of the home and the market conditions.   It just speaks volumes about the strength and determination of home buyers in this market.

Here are the details from last week:

By The Numbers.

Below is a high-level snapshot of the market performance for single-family residences in San Carlos. This data is for the week ending 3-15-2014:

San Carlos Housing Data 3-15-14 Prior Week
Closed Sales for the Week: 5 5
Average Sold Price: $1,727,600 $1,495,400
Average $/Sq Foot (Sold) $747 $826
Sold Price vs Orig List Price: 111% 109%
Average DOM of Closed Sales 9 9
No. of Homes Pending Sale: 28 30
No. of Active Listings: 14 10
Average Price of Active Listings: $1,355,429 $1,479,595
Average DOM of Active Listings: 11 10
Average $/Sq Foot (List) $706 $664
Active-Pending Ratio: 0.50 : 1 0.33 : 1

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Overbidding Hits a Fever Pitch in San Carlos

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I know, I know, I know… It was just last week that I spent an entire post telling you to basically ignore the asking price of a home for sale in San Carlos when you’re formulating your strategy to write an offer.  And I still stand behind that assertion.  But at the outset of your home search, you obviously have to know the asking price of a home to understand whether it’s even in your budget, because in this market just about everything  is selling for well over the asking price.   In the coming weeks,  you will continue to see some eye-popping premiums that are being paid for homes in San Carlos.  It’s starting to resemble the over-bidding that’s that has become commonplace in cities like Menlo Park and Palo Alto.

Just how high homes have been selling over asking price lately has been a hot topic in town.   Literally, the first question every buyer seems to ask when a new listing hits the market is “How far above the list price is this one going to go?” 

Below is a graph of the Sales Price to List Price ratio for the past three months of closed sales for single family residences in San Carlos.

San Carlos Overbidding

San Carlos: Percent Overbid on Recent Sales

Homes that closed escrow last month in San Carlos fetched an average of 15.2% above their asking price.   This is the highest average for any month that I could find in the MLS for the past 10 years!    And based on what we’ve been seeing so far for pending sales in February and March, this record probably won’t last too long.

The Right Strategy?

Does this mean that you should just automatically add 15% to the asking price of any house that appears on the MLS?  Of course not.   As we discussed in the prior post, the listing price of a home is not usually an accurate assessment of the value of a home, and there’s no magic formula for calculating what a list price should be.   You need to figure out on your own what the inherent value of a home is, based on its location, characteristics, and what other similar homes are selling for in this marketplace.

What this chart does tell you, though, is that home buyers in San Carlos are rolling up their sleeves and getting very aggressive in their bidding this year.   It should also put a dose of reality into buyers who are considering homes that are priced very close to their maximum budget.

In other words, if your absolute maximum budget for purchasing a house in San Carlos is $1.2M, you probably shouldn’t be wasting your time looking at homes that are priced at $1.2M, or even slightly above.   The stats above seem to suggest that you won’t even be close.
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The San Carlos Real Estate Week in Review: 3-8-14.

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The two week run of relatively favorable trends for home buyers in San Carlos definitely came to an abrupt halt last week.  Only 4 new listings hit the market, which was not nearly enough to offset the 9 homes that went pending during the same period.  The net result is that by the time of this post, we were back down to 10 homes for sale in the entire city of San Carlos, and the trend looks to be continuing downward from there.

More than half of these 10 active listings have offer dates set for sometime this coming week, so without a significant influx of new inventory we’re likely headed back to the low single-digit inventory range once again.   So don’t be shocked if you check in later in the week and see a total of 4-5 listings in all of San Carlos.  That’s definitely not good news for home buyers, who are certainly expecting more inventory now we’re well into the Spring Market.

Here are the details from last week:

By The Numbers.

Below is a high-level snapshot of the market performance for single-family residences in San Carlos. This data is for the week ending 3-8-2014:

San Carlos Housing Data 3-8-14 Prior Week
Closed Sales for the Week: 5 5
Average Sold Price: $1,495,000 $1,022,400
Average $/Sq Foot (Sold) $826 $699
Sold Price vs Orig List Price: 109% 112%
Average DOM of Closed Sales 9 11
No. of Homes Pending Sale: 30 25
No. of Active Listings: 10 16
Average Price of Active Listings: $1,479,595 $1,382,875
Average DOM of Active Listings: 10 8
Average $/Sq Foot (List) $664 $631
Active-Pending Ratio: 0.33 : 1 0.64 : 1

>>> Click Here to Read the Full Post
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Are you ready to step up to the most comprehensive data available about the San Carlos Real Estate market? Then subscribe to the White Oaks Blog for free by clicking here. Be sure to follow the White Oaks Blog on Facebook at https://Facebook.com/WhiteOaksBlog , and on Twitter @WhiteOaksBlog.
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This Town is on Fire.

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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.)

Buyer’s Fright.

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.

Seller’s Delight.

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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Are you ready to step up to the most comprehensive data available about the San Carlos Real Estate market? Then subscribe to the White Oaks Blog for free by clicking here. Be sure to follow the White Oaks Blog on Facebook at https://Facebook.com/WhiteOaksBlog , and on Twitter @WhiteOaksBlog.
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The San Carlos Real Estate Week in Review: 3-1-14.

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For the second straight week, the spring real market was literally jumping in San Carlos.   10 new listings hit the street, ranging in price from $840K to $2.3M, and almost as many homes were plucked off the market by eager buyers.   The net result of all of this buying and selling is that inventory of homes for sale as of this morning bumped up slightly to 16.

Home buyers are really hoping for more of the same type of activity this week, since each solid wave of new listings seems to diffuse some of the buying pressure in this market environment, albeit slightly, since it doesn’t feel like everyone is competing for the same house.    Much like the situation we have with the drought, it’s going to take quite a few more weeks of this type of activity to saturate this market and settle it down a bit.    But the last two weeks were a very good start.

Here are the details from last week:

By The Numbers.

Below is a high-level snapshot of the market performance for single-family residences in San Carlos. This data is for the week ending 3-1-2014:

San Carlos Housing Data 3-1-14 Prior Week
Closed Sales for the Week: 5 4
Average Sold Price: $1,022,400 $1,092,000
Average $/Sq Foot (Sold) $699 $865
Sold Price vs Orig List Price: 112% 113%
Average DOM of Closed Sales 11 11
No. of Homes Pending Sale: 25 22
No. of Active Listings: 16 12
Average Price of Active Listings: $1,382,875 $1,319,143
Average DOM of Active Listings: 8 6
Average $/Sq Foot (List) $631 $694
Active-Pending Ratio: 0.64 : 1 0.67 : 1

>>> Click Here to Read the Full Post
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Are you ready to step up to the most comprehensive data available about the San Carlos Real Estate market? Then subscribe to the White Oaks Blog for free by clicking here. Be sure to follow the White Oaks Blog on Facebook at https://Facebook.com/WhiteOaksBlog , and on Twitter @WhiteOaksBlog.
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The Asking Price? Forget About It…

Sold over list

It’s Irrelevant.

The fact that homes in San Carlos are continually selling well above their asking price is not newsworthy to anyone who reads this blog, or is even remotely plugged into the local real estate market.   A full 88% of the last 250 single-family homes sold in the City of Good Living fetched their full asking price or higher.   (OK, since I you know you were wondering, the home that sold for the biggest amount over the asking price of those 250 was 294 Devonshire Boulevard, which landed a whopping $632,000 — or 63% — over the list price.)    But I digress…

If you’re walking around an open house and you’re surrounded by other obviously interested buyers who are asking the listing agent when offers are going to be considered, there’s a good probability that this house is going to get multiple offers, and will sell above the asking price.  Frankly, if you’ve done your homework on house values, you would already know this before you even stepped foot on the property.

So now that you know the house is going to fetch a premium, just like the other 88% of homes that sold before it, is the list price even relevant anymore?   Does it matter what they are asking for the house?  The answer is a resounding NO — and the point of this post is to convince you that the sooner you can file/forget/disregard/ the list price of the home that you will be writing an offer on, the better chance you will have of winning it.

Spin the Wheel.

There’s no magic formula or scientific equation when it comes to determining the list price of a home.   That much should be obvious from the inexplicable range of asking prices for similar homes in this market.   Sometimes, they are so out of whack that it seems like the asking price was arrived at by spinning a big wheel on the agent’s office wall.  Or maybe a dartboard?

The generally accepted practice is to price the home slightly below its market value to generate lots of interest and multiple offers.   Apparently, there is a wide interpretation to what “slightly” under-pricing a house actually means, because list prices for similar size homes have been all over the map lately.   There are a variety of reasons for this phenomenon, both intentional or inadvertent:  The listing agent may be from out of the local market, and isn’t tuned into the micro-fluctuations of the San Carlos market.  Or, the agent may simply be lobbying for an artificially low listing price to help boost their statistics of how much they get over the asking price and how many offers they can generate.    It happens…

It’s also the case that it’s really difficult to gauge the market demand and inventory from week to week.  Competition has a funny way of changing one’s stratey.   And finally, there may be a situation where it’s hard to pin the value on what is being sold (i.e. a small home on a large lot, ala 294 Devonshire).

Whatever the reason may be, this highlights a very important fact for home buyers:  You absolutely cannot assume that the asking price of a home is an accurate statement of its value.

Focus on What it’s Worth.

As I have stated countless times on this site, home buyers in a competitive scenario often put too much emphasis on how much they are spending over an arbitrary list price, and not enough on determining what the home is actually worth in today’s market.

And what is a home’s worth in today’s market?  A really good starting point would be to compare it to other like homes have sold for recently, ideally no more than the past 30 days.   And if you want even more relevant data, have your agent find out the sales prices of those homes that are pending sale but not yet closed. Then you mix in the pros and cons of this particular home, its location, and its condition, and you come up with a reasonably accurate comparative price.

Kinda sounds just like what an appraiser does, right?  They use the same process to establish a base-line value of a home, and so should you. Then it just becomes an issue of how much above (or below) this base-line that you are willing to go get your home.

Look at it another way — If a decent 3BR home in White Oaks were to list tomorrow $1.1M, and you know that similar homes have been selling for $1.4M (and above), what number are you going to focus your strategy on?   Are you going to fret that you’re spending $300,000 over the asking price?   Or, are you going to focus on the fact that the house is probably worth at least $1,400,000 and formulate your strategy around that figure?

How you answer that question will speak volumes about your probability of success in this market.
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Are you ready to step up to the most comprehensive data available about the San Carlos Real Estate market? Then subscribe to the White Oaks Blog for free by clicking here. Be sure to follow the White Oaks Blog on Facebook at https://Facebook.com/WhiteOaksBlog , and on Twitter @WhiteOaksBlog.
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The San Carlos Real Estate Week in Review: 2-22-14.

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A Busy Week.

Now this is what a spring week in the San Carlos real estate market should feel like: 9 new listings debuted, 7 homes went pending, and the condo market is on absolutely on fire once again.   We will still need quite a few more weeks like this to start to balance out the market again, but this was a great start.

One of the challenges that home buyers face in this market is what I refer to as “missing the cycle.”   If you look at the average days on market for the homes that went pending this week (9 days), as well as the homes that closed escrow (10 days), you can see how compressed the time frame is for prospective home buyers.   They need to identify the house, get out and see it, make a decision, and then write an offer — all in about a week.   It’s easy to see how a single business trip, or a busy week at the office can cause a home buyer to miss an entire cycle of homes that hit the market.

And with so few homes for sale, that’s a tough hit to take — especially if “the right one” just happens to hit the market while you are out of town.

Here are the details from last week:

By The Numbers.

Below is a high-level snapshot of the market performance for single-family residences in San Carlos. This data is for the week ending 2-22-2014:

San Carlos Housing Data 2-22-14 Prior Week
Closed Sales for the Week: 4 0
Average Sold Price: $1,092,000 $0
Average $/Sq Foot (Sold) $865 $0
Sold Price vs Orig List Price: 113% 0%
Average DOM of Closed Sales 11 0
No. of Homes Pending Sale: 22 18
No. of Active Listings: 14 12
Average Price of Active Listings: $1,319,143 $1,400,657
Average DOM of Active Listings: 6 6
Average $/Sq Foot (List) $694 $717
Active-Pending Ratio: 0.67 : 1 0.67 : 1

>>> Click Here to Read the Full Post
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Are you ready to step up to the most comprehensive data available about the San Carlos Real Estate market? Then subscribe to the White Oaks Blog for free by clicking here. Be sure to follow the White Oaks Blog on Facebook at https://Facebook.com/WhiteOaksBlog , and on Twitter @WhiteOaksBlog.
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