What is Ailing the San Carlos Real Estate Market?
September 4, 2024
Bucking a Local Trend.
That sounds like an odd question, doesn't it? How could a market be considered “ailing” when the average price of a home in San Carlos reached a record high in 2024, just like it has in so many communities along the Peninsula?
The answer lies not in the price of the homes, but in the number of homes that are actually selling…or not selling, to be more accurate.
As I have been stating in many of my Monday morning updates, the San Carlos real estate market in 2024 has been consistently lagging behind the same metrics for the same period in 2023 – total sales, total revenue, etc… The only notable exception is the average home price, which continued to rise in 2024 like it did everywhere else.
I mistakenly assumed this was a trend that was shared by all of the other communities along the Peninsula since they are all in close proximity, and the markets cater to mostly the same group of buyers. But when I ran the similar data analysis for these other communities, I was shocked at what it revealed.
San Carlos is the Outlier.
The chart below shows the year-to-date total sales revenue for San Carlos and the most immediate adjacent communities through the end of August. This includes single-family homes, condos, and townhouses. Admittedly, eight months does not make a full year, but trends are simply too strange to ignore.
As alarming as the chart above is, it does not capture the full scale of the disparity between San Carlos and the other similar cities along the Peninsula.
The table shows the % increase in total sales revenue for January through August for a dozen cities along the Peninsula, compared to the same period in 2023:| City | % Change in Revenue from 2023 |
|---|---|
| Belmont | +52.0% |
| Los Altos | +35.9% |
| Menlo Park | +25.1% |
| Sunnyvale | +21.8% |
| San Mateo | +18.6% |
| Mountain View | +18.2% |
| Palo Alto | +14.9% |
| Burlingame | +12.9% |
| Pacifica | +10.7% |
| Redwood City | +8.2% |
| San Bruno | +8.1% |
| San Carlos | -8.5% |
San Carlos is the only city of this dozen that is not seeing an uptick in total revenue in 2024, and that's even more perplexing considering how desirable San Carlos has always been to prospective buyers.
What is Happening?
Well, the “what” part of the equation is easy to deduce: fewer homes have sold year to date in San Carlos than in 2023. To date in 2024, 184 total homes have changed hands versus 212 for the same period in 2023. That's a drop of over 13%, which is not a trivial amount — especially considering that we were all expecting 2024 to rebound sharply from 2023 when the full brunt of the hike in home mortgage interest rates was felt. That's exactly what is happening with the other cities in this analysis, as the data shows.
The “why” is much harder to pinpoint. Why is San Carlos seeing a decrease in the number of sales when every other community along the Peninsula is seeing an increase? We all know why San Carlos is such a desirable community to live in: Great schools, a thriving downtown, and a unique community feel, and a great mid-Peninsula location.
It's certainly not from lack of inventory. While the number of homes listed has certainly dropped from last year, there are still homes for sale in San Carlos — 14 as of the time of this post, and more are coming down the pipe.
This is a tough question that I don't know the answer to. But what is crystal clear is that anything short of a blowout fourth quarter will result in a year where San Carlos went the opposite direction of the rest of the local market. And that makes very little sense.
If you have ideas, I'd love to see them in the comments below.
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