Is $3,000,00 the new $2,000,000 in San Carlos?

June 4, 2019

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The New Threshold.

It was only two years ago that I wrote an article on this site titled “$2,000,000 is the New $1,000,000 in San Carlos“.  The premise of that article was that number of homes selling for $2,000,000 or more in San Carlos was growing so quickly that what was once considered an rarely reached price pinnacle was becoming almost commonplace – just as the $1M price point had just a few years before that.

At the end of that article, I ruminated that maybe “$3,000,000 will become the new $2,000,000 in San Carlos”.  Is that happening now?  Well, as someone who watches the market on a daily basis, I can tell you that I'm no longer phased by homes that sell for more that $3M in San Carlos.  In fact, 2019 may be the year that you see homes breaking the $4M barrier with some regularity.  But let's take a quick look at $3M sales in San Carlos over the past few years.

In 2017, only 5% of all homes sold in San Carlos** surpassed the $3M mark.  In 2018, 20 homes eclipsed that mark — or about 7% of the total market in San Carlos.   In 2019, there have already been 12 homes to sell for over $3M, which represents 12% of the total market, and we're only 5 full months into the year.  The question is not whether we'll match last year's number — it's how soon this year it will happen.

While the increase in $3,000,000 home sales is certainly impressive, it's not happening at the same rate as $2,000,000 homes sales were two years ago, and that's not a surprise.  The sheer “physics of the economics” start to come into play at this price level.   A $3,000,000 home not only carries a hefty mortgage, but it comes with a ~ $35,000 annual property tax bill. That financial anchor starts to scare away even some well-heeled home buyers who can afford to play in this range.

But as prices continue to climb upward in San Carlos and surrounding communities, there may be a day in the not too distant future where $3,000,000 is commonplace, and you won't be able to find a single-family home in San Carlos for under $2,000,000.

 

**Sales reported in the Multiple Listing Service (MLS).  Does not account for private home sales.

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