Even COVID Can’t Keep Home Prices Down.
September 10, 2020
San Carlos Sees New Highs.
The COVID-19 pandemic has proved to be nothing short of a wrecking ball to the nation's economy. If people are lucky enough to still have a job, they are likely working from home and quite possibly juggling home schooling at the same time. The stock market has been wildly volatile since the shutdown started in March, and is only now approaching pre-pandemic levels again.
Throw in catastrophic wildfires throughout California, and the Presidential election that's happening in less than 60 days, and it would understandable to think that the local real estate market has been rocked to the core as well. Except that it hasn't.
Home buyers who may have thought these unprecedented economic challenges would present great home buying conditions are finding out that this is not the case. With the exception of the latter half of March and the first few weeks of April when real estate took a mandatory pause, the San Carlos housing market picked up right where it left off, especially in the area of home prices.
The two graphs below show the price performance so far in 2020 compared to previous years by looking at two common metrics: Average sales price and price per square foot (PPSF).
I'm sure it seems completely counter-intuitive, but not only have prices not dropped in San Carlos since the beginning of the pandemic, they have actually increased. The average price of a single-family home in 2020 has risen by 2.2% from 2019, and the average PPSF for all homes sold also inched ahead of last year's figure. Both of these figures will be all-time records if they hold at this level through the end of 2020. Considering everything that we've witnessed this year, that is truly remarkable.
Sales Volume Down.
The one area where 2020 is lagging previous years is in sales volume. This stands to reason, since the market was essentially shut down for 1-2 months this year until real estate was re-classified as an essential industry and we were allowed to sell houses again. Because of this pause, the total sales volume in San Carlos through the month of August this year is only $361.4M, which is off by 12.2% from the same 8-month period in 2019. This is can be attributed to the fact that the number of homes sold so far this year (168) is off by a similar margin from the same period last year (190).
So while the market continues to play catch-up after the shutdown, it's obvious to anyone who is shopping in this market that home prices in San Carlos never really fell behind in the first place.
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