San Carlos Q1 2023 Real Estate Recap
April 12, 2023
Ending the Slide?
After watching the San Carlos residential real estate market slide last year like the hills next to Edgewood Road after a heavy rain, all eyes were focused on the Q1 numbers of 2023 to see if that trend was going to continue, or if the market had indeed reached its bottom in Q4 of 2022 as I discussed in this post.
As you will see in the tables and graphs below, while the first quarter of this year was a far cry from the numbers tabulated during same period of 2022 (widely regarded as the peak of the market), the San Carlos market slightly outperformed Q4 of 2022 in most of the relevant categories. This supports the assertion made earlier that Q4 of last year may have indeed marked the bottom of that breathtaking slide.
When we compare the first quarter of this year to the first quarter of 2022, there's really no way to sugarcoat what happened.
The average price of a single family home in San Carlos plummeted by 21% compared to Q1 of 2022, and was the lowest Q1 valuation since 2020. That's simply an astounding correction to a real estate market that has been on an unstoppable upward climb for 13 years.
Q1 this year was a weaker quarter than Q1 of last year in every metric that matters, as you'll see in the table below (note: if you're reading this post from your email, you'll need to click through to the site to see the table — it's an annoying feature of the platform, and not my shameless attempt to make you click through.)
|Statistic||Q1 2023||Q1 2022||Difference|
|Average Sales Price||$2,273,254||$2,874,346||-21%|
|Days on Market||30||10||+200%|
|Price per Square Foot||$1,267||$1,447||-12.4%|
In nutshell, in Q1 of 2023, prices dropped dramatically, there were fewer new listings to choose from, and those homes that did test the market took 3 times as long to sell as they did in Q1 of 2022. What a difference a year makes.
Have We Reached the Bottom?
Based on the data and the overall vibe of the market, Q4 of last year is looking more and more like it was indeed the nadir of the recent market swing. The chart below shows that the average home price is starting to trend upward again, abeit slightly:
Looking at the past two quarters a little more closely, Q1 of 2023 edged out Q4 of 2022 just marginally on most counts. The average sales price increased by just 1.5% and the price per square foot also increased by only 3.4%. There were significantly more new listings in Q1 of this year, but it's important to note that a good chunk of those “new” listings were actually homes that didn't sell in Q4, and were relisted again in Q1
What the statistics don't catch, however, is buyer behavior. The activity and urgency level of home buyers in Q1 was night-and-day different from what it was in Q4. Multiple offers are happening with much greater frequency — my recent listing at 1005 Orange Avenue garnered 6 offers, and I've heard numerous accounts of other listings enjoying similar results.
But that doesn't mean that we're back to the Wild West of just a year ago. There's still a clear divide between homes that are priced right and ones that are not. The former group is selling more quickly, while the latter group is facing a stubborn buyer pool that is waiting them out.
What all of this does mean, though, is that the market appears to have found its bottom — at least for the time being. Who's to say what effect another war, rate-hike, or wave of layoffs may have on future quarters. But your takeaway from this data should be very clear: If you've been waiting to time the bottom of the market before you buy or sell, that time is right now. When mortgage interest rates come down (and they will), prices will start to go back up, and we'll be right back where we were a year ago.