San Carlos Real Estate Report Card: First Quarter of 2010

April 14, 2010


Are Things Looking Up?

Back in January of this year,  I posed the following question in a my annual preview podcast:  Will 2010 Be a Better Year for San Carlos Real Estate? In that podcast, I stuck my neck out and predicted that yes, we will see an increase in San Carlos home sales in 2010, thus ending two years of consecutive declines.  The main reason behind this prediction was simply that the market conditions heading into the first quarter of 2010 were far different than they were during the same period a year ago — more credit available, better interest rates, and higher demand.  I also cautioned that lack of inventory and the high unemployment rate could curtail any growth.

So now that the first quarter of 2010 is in the books, how is my prediction turning out?

Q1 Comparison.

There's a ton of information in the graph below.   Not only are the number of sales tracked by month, but also the number of pending sales, and the general inventory situation:

Here are some of the key metrics pulled from this graph, as well as from the MLS statistics….

Key Metric Jan-Mar 2010 Jan-Mar 2009 Difference
Median Price $862,500 $950,000 -9.2%
Average Price $913,427 $985,751 -7.3%
No. of Sales 35 33 +6.1%
Sales Pending 55 47 +17.0%
New Listings 86 110 -21.8%

What this data tells us.

Indeed, the number of closed sales increased by over 6% compared to the same period in 2010 — so my prediction is holding true so far!   But what's important to notice is that this number increased despite the fact that there were almost 21% fewer new listings during that period.   After witnessing quite a few multiple offers in Q1, I think it's safe to say that the growth would have easily exceeded 6% had there been more homes to choose from.   The lack of inventory that I harped about all during Q1 seems to have throttled a portion of our growth.

As we exited March, there were still far more buyers looking for homes in San Carlos than there were homes to choose from, particularly in the 3BR/2BA, sub-$1M sector.  After all, when 11 buyers compete for a single home like they did for 172 Lyndhurst, there can only be one winner…and the other 10 are likely to be still out there looking.

Looking Ahead.

2010 YTD Home Sales in San Carlos

2010 YTD Home Sales in San Carlos

According to the data above, the trend of increasing sales over 2009 should continue, simply because the number of pending sales in Q1 2010 increased by 17% — that means that more homes should close escrow in the upcoming quarter, barring some huge attrition of this number.

What's also helping is the recent surge of inventory.  Over the past few weeks, the San Carlos market enjoyed a nearly 66% increase in homes for sale, topping the 50 mark for the first time in about 6 months.  This injection of inventory should relieve some of the pent-up demand we witnessed in Q1.

Cautions? Sure.  As I discussed a few weeks ago, interest rates are starting to creep upwards as the Fed withdrew their involvement in the home purchase market.    Any significant increase in interest rates weakens buying power, which then serves to drive home prices downward.  And the unemployment hasn't improved much over the past few quarters.   These two factors could serve to stall out any sustained growth.

But we're now two weeks into the new quarter, and there seems to be nothing holding back the market in San Carlos.   Buyers are still out in force, and multiple offers continue for those “to die for” homes.   It will be very interesting to see this same report again in 3 months, but right now we look to be in pretty good shape.

Update: Past Q1 Data..

Per the great suggestion by blog reader Ken Wilson, here's a quick snapshot of the Q1 periods in the San Carlos market over the past 6 years.  Interesting to look back at the “boom market” of 2005:  20 days on market average, and homes fetched a whopping 108% of list price!

Key Metric Q1'10 Q1'09 Q1'08 Q1'07 Q1'06 Q1'05
Median Price $862,500 $950,000 $1,190,000 $1,010,000 $1,007,500 $932,500
Average Price $913,427 $985,751 $1,247,925 $1,099,577 $1,123,080 $1,039,421
No. of Sales 35 33 51 71 50 82
New Listings 86 110 104 103 110 121
% to List 99.06% 95.92% 99.79% 101.07% 99.11% 108.12%
Average DOM 59 47 42 48 37 20

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  1. Ken Wilson on April 14, 2010 at 4:14 pm

    Hi Chuck, continue to love the website. I would love to see the key metric table including data from the last 5 years if possible to see how far we are off the peak. (i.e. Q1 2005, Q106, Q107, Q108, Q109, Q110. I know that it is a lot of data but really curious as to the trend.


  2. Chuck Gillooley on April 14, 2010 at 6:23 pm

    Hey Ken,

    Great suggestion. I’d be happy to do so…but I’ll have to double your membership fee 😉

    The appended the post and put the data you requested at the end. I also found a couple of errors in the Q1 figures for 2010 and 2009 that I fixed in the original table. I hope you find the data useful.


  3. Arn Cenedella on April 15, 2010 at 12:19 am

    you are so right – based on the high number of sales the past few weeks, closed sales should continue to increase in the coming months. i think the controlling factor will be number of new listings as clearly there are plenty of buyers especially at the entry level price range in San Carlos.
    several tour properties from yesterday have alreayd gone into contract which is the same as i am seeing in Menlo Park.

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