The San Carlos Q3 2025 Real Estate Market Recap

Storming Back from 2024.

It's hard to believe that we're already three-quarters of the way through 2025. Whether that's a good thing or a bad thing depends on one's perspective, but the year really feels like it is flying by. Looking at it another way, Christmas is only 82 days away. But if you've been to Costco recently, you already knew that.

The good news in the data below is that the residential real estate market in San Carlos in 2025 is significantly outperforming the market during the same period in 2024.

The bad news is that the bar was very low to begin with, and the results highlighted below for 2025 are still far below what we normally see at this time of year. But hey, I'll take good news any day.

To put the performance and the numbers below in proper perspective, it's important to remember that 2023 and 2024 marked the lowest number of home sales, and consequently, the lowest revenue recorded across the nation in nearly 30 years. So while it's encouraging that the market seems to be pulling out of a two-year nosedive, it has considerable altitude to gain before we are back to a “normal” market.

More Listings + More Sales = More Revenue.

As I typically do with these quarterly updates, the first chart I highlight is the total sales revenue in San Carlos for the period in question, and then I drill down to explain the revenue numbers. The revenue data in this chart incorporates not only single-family homes, but also condos and townhomes. It's the only time in this report where condo and townhouse data are mentioned, since over 80% of the sales volume in San Carlos is generated by single-family home sales.

The total revenue generated by the sale of single-family homes, condos, and townhouses notched a 21% gain over the same period last year, and more importantly, it is reversing a troubling, three-year trend of significant decline. This uptick in revenue is significant enough that it also exceeded the same nine-month period in 2023. But, as is evident from the chart, the market is still running well below the levels that were achieved for the same period in 2021 and 2022.

What's driving this increase in revenue? As I've stated in the previous market recaps, you need either an increase in the number of sales or a significant increase in home prices to achieve such a significant gain in revenue.

So far in 2025, we're getting both.

The number of new single-family home listings — the fuel for any real estate market — is running 22% ahead of last year's pace, while the number of closed sales is ahead by nearly 16%. There was certainly a feeling that sellers in 2024 were waiting for the dust to settle in the market before they put their homes up for sale, and this data shows that more of them are comfortable moving forward now.

Positive momentum should continue into Q4 since the number of pending sales, the key indicator of future growth, is up by nearly 12% from 2024.

The other element that is driving revenue growth in the San Carlos market is simply the price of housing. This chart below is a real eye-opener:

What's obvious in this chart is that both the average and median sales price for a single-family home in San Carlos increased by 10% over the same period last year, which is not great news for hopeful home buyers.

But what's not as obvious is that when I run these numbers again at the end of the year and compare full-year data between the years, 2025 will likely supplant 2022 as the record holder for all-time pricing in San Carlos. That's because after the market peaked in the first half of 2022, the rapid increase in home mortgage interest rates that started in March of 2022 seriously eroded home prices in 2022 and 2023. It's only now that home prices have recovered from the shock effect of 11 interest rate increases over just 16 months.

What to Expect in Q4.

The year-over-year growth that the San Carlos real estate market is enjoying should continue in the final quarter of the year. We are heading into Q4 with 24 homes for sale, which is a healthy number and should keep the serious home buyers active as we head into the holiday season. If interest rates continue to creep downward, that will only increase the chances of these homes being sold before the end of the year.

There are also 18 homes that are under contract and will close escrow in the fourth quarter. That means we're virtually assured that 2025 will finish well ahead of 2024 in every key metric that I track.

Unfortunately for buyers, home prices in San Carlos are heading toward record-high levels. The strategy of waiting until rates drop to purchase a home just means you're going to buy a more expensive home at a slightly lower rate.

In the end, If this positive momentum continues into 2026, we'll be able to look back and clearly declare that 2024 was the trough of the most recent market downturn, which is good for everyone.