San Carlos Real Estate – A Recap of Q1’21.
April 2, 2021
Record Sales Prices, Revenue.
When you look at the behavior of the San Carlos real estate market lately, it's almost unfathomable that our economy has been in the crippling grip of a pandemic for over a year. Homes are continuing to sell for record prices and in a dwindling number of days — if they ever make it to the market in the first place. The price trends and sales figures that you'll see below are more indicative of an economy that's riding a unabated wave of economic optimism, rather than an economy that saw the vast majority of buyers and sellers forced to deal with layoffs and sheltering in place. Most important, it reflects how impervious our tech-fueled housing market is to just about whatever is thrown at it.
I know it's getting to sound like a broken record, but home prices hit an all time high in San Carlos in the first quarter of 2021 in essentially every category that you can track — total sales revenue, average sales price, and average price per square foot:
The chart above reflects the total sale volume (single-family residences and condos) for the first quarter of 2021, compared to Q1 of each of the past 4 years. The total revenue rocketed 26% to over $175M, which is easily an all time record. Looking specifically at single-family residence (SFR) data below:
The average price for single-family residences sold in San Carlos in Q1 also hit an all-time record, as it jumped to nearly $2.3M. For anyone who has been trying to land a house in San Carlos over the past three months, this datapoint will come as no surprise, as we've all watched prices climb to dizzying heights.
The average price per square foot (PPSF) of all single family homes inched out a new height as well, but not as dramatic of an increase in average sale price. Nonetheless, $1,165 per square foot is the highest level for an Q1 on record.
What About Inventory?
I love statistics and use them extensively as part of my real estate practice. One of the most useful things about stats is that they help correct mistaken assumptions about the market with facts. Inventory is a perfect example of this. Throughout Q1, all I kept hearing is “where are all of the listings?” Inventory was certainly tight throughout much of the quarter, and we were sitting in single digits just a couple of weeks ago. But does that mean listings have been scarce? The data below may surprise you:
In Q1 of this year, there were actually 89 new single-family listings in San Carlos, which is the second highest total for a Q1 in the past 5 years. That seems totally counterintuitive, since there never seemed to be anything on the market. But the reality of the situation is that there were indeed quite a few new listings in Q1, but they sold at a record pace — many not even making it to the market. And those that did were often being snapped up in a matter of hours or days.
The market conditions we saw in Q1 of this year are unlike anything I have seen in the past 15 years. The overall intensity of the market, the incredible imbalance that is favoring sellers, and the premiums being paid to land a home in San Carlos rival any period of time during the recovery from the Recession — even in 2015-2017 when prices were appreciating at a double-digit rate. Unfortunately for home buyers, I don't see that changing much in Q2. As I write this post, I'm aware of two homes that just went pending that fetched premiums over $500K above their respective asking prices — and the list prices in both of these situations were not artificially low.
Mortgages interest rates remain historically low, and with mass vaccinations just around the corner, the world is definitely getting back to work. Barring an unforeseen hiccup in the financial markets, or a tidal wave of new listings, I don't see anything changing significantly in Q2. That means if you're thinking of selling, the market conditions have never been better. If you're trying to buy into this market, it's going to take patience, perseverance, and probably a healthy dose of luck.