San Carlos Q1 2018 Market Update.
April 4, 2018
One Hot Market.
The first quarter of 2018 is in the books, and it was a very good quarter if you happened to be a home seller in San Carlos, or anywhere along the Peninsula for that matter. Maybe not so great if you're still in the hunt to buy a home on the west side of the bay. Home prices escalated in every community on the Peninsula, and as you can see from the numbers below, San Carlos was not left out of the party.
What made the first quarter so interesting this year is the relative adversity that the market had to overcome — and I use the word “relative” with emphasis, because for the past 7 years, the market has blissfully grown with nary a single real economic challenge to curtail the rise in house prices. But in 2018, we experienced the end of “free money” as mortgage interest rates started a series of increases that are expected to continue throughout the year. And the stock market experienced a few volatile swings unlike anything we've seen since the Recession.
One would think that this one-two punch would have had an adverse impact on the market, and indeed both of these influences left some casualties in their wake. Some buyers were completely forced out of the market, while others have decided to watch from the sidelines until things settle down (if you think you know when that's going to happen, the please enlighten us all.) But losing that segment of buyers did not seem to have an impact on the pace and intensity of the San Carlos real estate market, as you can see from the results below.
Prices Up, Days on Market Down.
No matter how you slice up the data, home prices increased to all time highs in the first quarter of 2018. Average price, median price, average price-per-square foot — they all hit new record values in the first quarter of 2018:
The average price for all homes sold in San Carlos surged past the $2,000,000 mark in Q1, representing an increase of 8.4% over all of 2017. The median sales price of $1,865,000 registered a slightly lower growth of only 4.8%. Certain neighborhoods such as the Greater East Side experienced significantly higher price increases, which helped to drive these numbers to their all-time highs.
The average price per square foot of $1,114 set an all time record too, registering a healthy 10% gain from 2017.
To put this in perspective, it was only a few years ago when it was actually noteworthy when a home sold for over $1,000 per square foot. Now it's notable if a home doesn't beat this mark.
Homes in San Carlos are staying on the market for less time than in the recent past. In the first three months of 2018, it only took an average of 10 days to get a new listing into contract. This is a byproduct of not only the imbalance of the number of buyers versus available homes, but also the fact that home buyers are now conditioned to the reality that they will likely only have one weekend to see a home before it's going to be sold. It's far less common in today's market to see a home have consecutive open house weekends.
Don't Blame the Inventory.
When we start to look for the catalyst behind these escalating numbers, it's easy to point the finger at lack of inventory as a main culprit. Without a doubt, there are far more buyers in today's market than there are available homes for sale. That's a condition being felt throughout the Bay Area as companies are bringing in more employees than there are places to house them.
But by recent standards, the number of new listings to hit the market in San Carlos in Q1 of 2018 was actually at its highest level in the past 5 years:
This was easily the most surprising statistic that I encountered when compiling the data for this report. With inventory seemingly stuck in the low teens on any given week, it seems counter-intuitive that there were so many new listings. In fact, you have to go back to 2012 to surpass that number, when there were 86 listings to hit the market in the post-Recession era.
Despite the relative increase in new listings, it's important to put these figures into proper historical perspective. While a figure of 79 new listings stacks up impressively over recent history, it pales by comparison to the San Carlos market prior to the recession. In the years from 2000-2007, it was common to see well over 100 listings hit the market during the first quarter — in the first quarter of 2003, there were 170 new listings — that's almost two new listings every day! Just imagine how the market would be today with that kind of inventory to choose from.
There were some other interesting happenings in the San Carlos real estate market in the first quarter of 2018. Consider the following:
- 59 single-family homes closed escrow in San Carlos in Q1 –> 20.4% more than in Q1 of 2017.
- Of those 59 homes, 44% of them sold for over $2,000,000 (versus 29% in 2017.) 10.4% of those 59 total cleared the $3,000,000 mark.
- There was not a single San Carlos single family home to sell below $1,000,000.
- The first $4,000,000 sale in the flats of San Carlos occurred in Q1, with 1985 Carmelita Drive closing at $4,300,000.
- 131 Rockridge Road set the highest price per square foot in Q1, selling at a very Menlo Park-like $1593/sq foot.
The stage is now set for a very interesting remainder of 2018. Will the market stall out as some experts are predicting, or will it continue to climb to more record breaking heights?