Another Reason Why There Are No Homes for Sale in San Carlos…
February 6, 2014
Is Anyone Moving?
When I purchased my home in San Carlos, I was concerned that the house itself was a bit on the small side for the future family that we were planning. My Realtor at the time told me “Don't worry, you'll probably move to a bigger place in 5 years. Everyone moves on average every 5-7 years”, citing statistics from the National Association of Realtors that have not changed much even to this day.
That was almost 23 years ago, and I'm still at the same San Carlos address. So much for statistics.
But while my own example certainly bucks the long-standing national average, I got to thinking about my own clients who I have helped buy homes in San Carlos and all along the Peninsula over the past 7 years. What percentage of them have since moved on from the homes that they purchased? Certainly it must be significant number, if the national average says that everyone's gypsy blood starts to boil every 5-7 years.
So I dug into my database, and the results I found were quite surprising.
What was the percentage of my home buyers over the past 7 years that are still in the same home? 96%. For homes my clients purchased in San Carlos, that number is 100% – not one has moved since they purchased. That number simply blew me away. Do I just attract home-bodies, or is that same phenomenon happening with other agents? One top-producing agent who has been in the business for 10 years told me he had done the same data analysis recently and 90% of his clients had not moved again during that period. Another agent in Menlo Park tallied her number at over 80% during a 20-year period.
This seems to suggest that most homeowners on the Peninsula are generally staying put once they find a home to buy, and that's not good news for home buyers in an area where there is virtually no room for new construction.
So why is the number so high in San Carlos and along the Peninsula? I have a few theories about that.
- The 15-Year Home. Many home buyers tend to hone in on San Carlos and other Peninsula cities because of their excellent schools. The size and characteristic of the home often takes a back seat to the location of the home and the proximity to the schools. Whatever shortcomings there may be in the house (size and condition) can be rectified over time. These buyers tend to think in 15-year increments — or, roughly enough time to get them through the infant years and a K-12 education.
- Upward Non-Mobility. In a perfect world, a good percentage of these “15-year” buyers would simply prefer to move to a bigger home in San Carlos, as opposed to dealing with the hassle of remodeling their existing home to suit their growing family. This transitional home-buying in itself would create many more new listings in San Carlos, right? But as we have discussed numerous times on the site, the vast majority of move-up buyers in San Carlos are at a distinct disadvantage in this ultra-competitive market, because they usually have to sell their existing home to obtain the funds to purchase their move-up home. Sellers simply won't consider a lengthy conditional offer when they're staring at a stack of non-contingent offers. The net result is that many homeowners in San Carlos are going to stay at the same address, whether it's their preference or not.
- In versus Out. The livelihood of the Peninsula is heavily dependent on the technology sector. When the tech market hits an upward swing (like it's in now), tech companies tend to relocate key employees into the area, not out of it, simply because they're headquartered here and the Bay Area has always been the R&D epicenter for tech. The lack of employees relocating out of the area creates another void of potential new listings.
- Working Longer. The days of a person getting a pension at 55 and riding off into the sunset are long over. People are living longer, and many simply have to keep working. The train of retirees leaving town simply isn't happening.
It almost reminds me of that verse in the Eagle's hit Hotel California “You can check out anytime you like, but you can never leave.”
But until one (or more) of these trends is reversed, you can expect to continue to see uncharacteristically low levels of inventory in San Carlos and surrounding communities for the foreseeable future.