The Move-Up Market is Moving in San Carlos.

Time to Up-Size.

Much of the attention in the San Carlos real estate market tends focus on the “entry-level” range of homes, which is roughly defined as 2 or 3 bedroom homes that sell for under $1M.  And that's understandable, since that specific segment accounts for the highest unit volume of home sales in the city every year, and the relative health of that sector is a good indication of what's happening in the broader scope of our real estate market.

But not everyone who sells a home in San Carlos leaves San Carlos.   Homeowners who have lived in the same home for 5-10 years often outgrow their digs, especially those with a growing family.   Not wanting to leave San Carlos, they're faced with the decision to either increase the size of their current home, or find a larger “move-up” home right here in town.   (We faced that same decision about 11 years ago, and opted to stay put and remodel.)   But not all of these entry-level homes are good candidates for expansion.  Some are on small lots which severely limit the ability to add square footage.  Others may be on a street where it simply doesn't make economic sense to build a big, new house. Whatever the reason may be, there's always a contingent of move-up buyers in San Carlos who are looking to stay put in the City of Good Living.

What's Hot.

With a strong resurgence in the entry-level real estate market like we've seen in the first half of 2011, one would expect there would be a ripple effect for move-up homes —  those with 4 or more bedrooms, and are generally priced in the $1M-$1.5M range.   And that indeed appears to be the case.  Take a look at just a few of these examples from just the past couple of weeks — click on the addresses for more details and pictures:

• 1385 Cedar Street:  4BR, listed at $1,395,000 — Pending sale in 1 day.
• 3443 Brittan Avenue:  5BR, listed at $1,275,721 — Pending sale in 7 days.
• 101 Aberdeen Drive: 4BR, listed at $1,278,000 — Pending sale in 5 days.
• 11 Dickens Court: 4BR, listed at $1,198,000 — Pending sale in 6 days.
• 1017 Walnut Street:  4BR, listed at $1,099,000 — Pending sale in 7 days.

Granted, there's no way of knowing how many of these specific examples are being purchased by San Carlos move-up buyers.  But it serves to illustrate that this segment of the market is moving as fast as it ever has in the past 5 years.  The same positive effects that are fueling the entry-level market are also helping boost sales here.  We've talked many times about how attractive loans have been in the conforming range ($727,750 or less.)   But recently, jumbo money has been back in favor again, as several banks have been writing 30-year fixed jumbo loans at $1M for under 5% — and no points!  When was the last time you saw that?

This is a very healthy sign for the San Carlos real estate market.  We've always said that the entry-level market is a catalyst for the rest of the market, and the strength of that sector is helping the group of homes right above it.