San Carlos Home Prices Hold Firm.
May 12, 2020
Despite a Plunge in Sales.
One of the bigger surprises that we have seen in the San Carlos estate market during the shelter in place is that local home values are actually holding pretty firm, despite the dramatic drop in home sales that I documented last week. Unlike during the Great Recession, where home prices plummeted by about 13% in San Carlos and over double that amount in Redwood City, we are simply not seeing that happen this time around, and that's great news for anyone that is considering listing their home this year.
I consider this to be surprising because there are numerous and significant challenges that threaten this market — record unemployment, a volatile stock market, and tightening lending requirements. Normally just one of these factors could teeter housing prices lower. But it just doesn't seem to be happening right now.
Most homes in San Carlos that have been priced well and are in desirable locations are still getting multiple offers, and are selling at or above their respective list prices in many cases. Granted, the number of offers and the percentage over the list price might not be as much as in pre-COVID days, but just the fact that this is happening is remarkable considering the circumstances. Take a look at the following charts for San Carlos:
These two metrics, average sales price and average price-per-square-foot, are ones that I commonly use on this site to gauge the trajectory of home prices in San Carlos. As you can see, in both cases they have remained relatively stable from a high-level perspective. Even thought the average sales price in April is slightly down from March, it's still very much in line with the pre-shelter in place figures.
There are a few caveats to this data that should be noted:
- The sample size is small. The data above represents only 62 total home sales so far this year. There were 82 homes sold during the same period in 2019.
- The high-end market is not moving as fast. While we are seeing robust performance in the entry-level and mid-level homes, homes that are priced over ~ $2.5M are generally taking a little longer to sell, and are the ones most likely to sell for slightly under the list price. But they are indeed selling.
- No May sales data. The May sales data will likely be comprised entirely of contracts that were consummated during the month of April, which was the first full month of operating in a shelter in place mode. That being said, the anecdotal data that I've gathered from the pending sales backs up the assumption that I'm making in this post.
The Bottom Line.
What does this mean if you're thinking about selling your home? The data tells us is that despite the extremely challenging economic market that we are weathering, the San Carlos real estate market is holding its ground admirably well. There are well qualified buyers in the market right now that have digested the market challenges, and who are still focused on finding a home in San Carlos. It may take a few days or weeks longer to get your home sold as buyers grapple with the new buying environment, but homes with the right price and attributes do appear to be selling.
If you're thinking about selling your home, let's talk about how to navigate this new landscape to get you the best possible results.