The April Stumble.

It Was Going So Well…

As you may recall from my Q1 2025 Market Recap of the San Carlos real estate market that I wrote at the end of March, there were strong indications that our local market was starting to emerge from its two-year trough in sales. It has been well documented that 2023 and 2024 were two of the lowest years in real estate sales in 30 years — not only in San Carlos, but across the entire United States. So it was welcome news that signs of life were starting to emerge.

Before diving in to what is happening now, it's important to understand that 3 legs of the proverbial stool need to be in place to create revenue growth in ANY real estate market. It needs:

1. A healthy pipeline of new listings.
2. Buyers to purchase these new listings.
3. Price stability.

Indeed, these metrics looked tantalizingly good for San Carlos in Q1. The number of new listings increased by 26% from Q1 of 2024, and the average price of a single-family home jumped by 17% over the same period. Even the overall revenue (SFR's and Condos) eked out a small gain over 2024.

All good signs, right?

Well, the one leg of the stool that we haven't discussed above is #2 above: Buyers to purchase these new listings. Because as you will see below, this is where the wheels fell off the wagon in April.

Welcome to Tariff-Gate.

I don't really need to tell you what happened in early April, nor is it pleasant to recount the experience of losing 25%-30% of one's savings and retirement funds in just a few trading days after “Liberation Day”. But for those of us who regularly list properties in San Carlos and along the Peninsula, we could immediately feel the wind come out of the sails of the market momentum that was generated in Q1.

Well, I did what I always do when I get a gut feeling about shifts in the real estate market: I look at the data. It didn't take long at all to figure this one out.

Below are two charts that you have not seen on the blog before:

This first chart shows the number of new single-family home listings and pending sales for the period of January – April and compares it to the same period of the prior 4 years just to give some perspective. It does a great job of showing exactly what happened in 2023 and 2024 when then the revenue numbers tumbled.

There are two other pieces of data that jump out to you right away (probably because I highlighted them with bright red arrows and circles):

• The number of new listings jumped by 19% from just last year (a good thing).
• The number of homes put under contract (pending sales) essentially flat-lined and remained at the lowest level in recorded history (not a good thing).

As I mentioned above in my elementary three-legged stool analogy, both of these legs need to increase in order for us to see revenue growth, not just one. So I dug a little bit deeper into just the 2025 numbers, and found this little nugget:

This is the same data that is under the “2025 YTD” bar in the first graph, but it's just broken out by month and it shows exactly what happened to the promising start we had in 2025.

Both Pending Sales and New Listings fell off the pace in April. Now, a valid argument could be made that a drop of only three pending sales and two new listings does not constitute a crisis. But it's important to realize that in a healthy market, there should NEVER be a dip in these numbers for April, period.

In a typical year, both of these numbers increase all the way through May before settling down in June and July for the summer.

Here's what a normal pattern looks like for pending sales:

What's even more ironic about this chart is that it is from 2023, which was noted above as one of the worst years in San Carlos real estate history, but it still followed the pattern of a “normal” year.

There's Still Time.

The month of May is typically another robust month for new listings because any home seller who wants to participate in the Spring market needs to get their home on the market before the annual summer snooze that is June and July. It's certainly starting out that way — there have already been six new SFR listings in first six days of the month, are more are due to follow.

The key to the trajectory of our Spring market, and for all practical purposes the entire year, will be a strong buying month in May. If the listings continue to increase at the same rate and the pending sales continue to flat-line, it doesn't take a pHd in Mathematics to figure out that we'll enter the summer with a bloated inventory. We are currently sitting at 25 homes for sale in the entire city of San Carlos with an average stay on the market of 29 days. It's easy to see how that could be in the 30's or 40's very quickly.

However, like any shockwave that has hit our market recently (think the Great Recession, COVID, skyrocketing interest rates, etc..) the buying public has shown a willingness to shrug off these challenges after a short respite and then forge ahead under different skies.

The stock market is sloooooowly creeping back toward the pre-Liberation Day levels, and it's my hope that the continuous whipsaw behavior in the stock market that paralyzed our market in April will become “just the norm” in May. Ultimately, consumer confidence will also have to increase as well.

We will certainly need ALL of these to happen in order to avoid a third straight year of record low sales in the San Carlos real estate market.