The San Carlos Q1 2026 Real Estate Market Recap

Welcome to Spring 2026! It has certainly been an eventful three months not only in the local residential real estate market, but also globally. We are heading into some economic and geopolitical turmoil that some may not have seen in their lifetimes. Aside from 9/11, the last comparable period that I can remember was the energy crisis of the 1970s, when I used to drive my parents' cars to the gas station on the odd-and-even days and sit in line for hours doing my homework. Home mortgage rates during that period were over 11%.

Do you remember those days? I sure do, because yeah…..I'm that old.

That means we are heading into some uncharted territory over the next few quarters, and depending on who you ask, you'll get different opinions on the impact the Middle-East conflict will have on the housing market and our economy in general. What's very clear is that energy prices have already escalated very quickly. If this remains the case for an extended period, it will likely cause inflation to rise, which, in turn, may push home mortgage rates higher.

None of that is good for the residential real estate market. But it's still early, and I think everyone is hoping for a quick resolution so that we can get back to our normal, hectic lives.

If you have been following my occasional updates on the San Carlos real estate market so far in 2026, you'll know that we got off to a relatively slow start compared to the same period in 2025. Even halfway through the quarter, we were lagging in most of the important metrics that I track – total revenue, the number of listings, and the number of closed sales. The only stat that remained at record highs was the average and median home prices, much to the chagrin of home buyers.

But things really picked up over the past six weeks of the quarter, and as you'll see from my stats below, the market ended up exceeding the first quarter of last year in just about every metric.

A Surge in Revenue.

The total sales revenue, which is the total of all residential real estate sales in San Carlos, including condos, townhomes, and single-family residences, rose a healthy 20% from Q1 of 2025.

The roughly $160M tallied this past quarter is actually the third highest Q1 of any year on record, being surpassed only by 2021 and 2022, when the market boom was fueled by 3% mortgage rates.

What's also interesting in these numbers, and is not at all apparent from the chart above, is that condos and townhomes accounted for only about 6% of the total revenue. Nearly all of the revenue was driven by single-family home sales. When I've tracked this stat in the past, that ratio normally fell around 85:15, not 94:6 as it is now.

This isn't because fewer condos are selling – the exact same number sold in Q1 of last year: 11. But as you'll see below, the ratio is getting more lopsided because of the continuing remarkable surge in the cost of a single-family home in San Carlos.

Because condo and townhome sales are an inconsequential portion of the total sales, the rest of the data analysis below will focus solely on single-family homes.

Record High Home Prices.

In the first quarter of 2026, the average price of a single-family home that was sold in San Carlos was $3.128M, which is about 6% higher than the same period last year. That easily set a new high for the first quarter of any year on record, and it also marks the first time that the average sales price topped $3M in the first quarter of any year.

The median sales price of $2,880,000 was also an all-time record for Q1, just nudging out the same period last year.

But when we look at the other popular metric for understanding home prices — the average price per square foot (PPSF) — the story is different:

The average PPSF of $1,321 that was recorded this past quarter was nowhere near a record high for any Q1. So how can the revenue hit an all-time high when the average price-per-square-foot did not? A logical answer to that question might be that a huge number of houses were sold in the first quarter.

But as you'll see in the upcoming charts, that's not the case.

When I see this seemingly weird paradox of a high revenue figure coupled with a lower PPSF figure, it tells me that during that period of time, there were a lot of large, expensive homes that sold.

Why? Larger homes almost always have a lower price-per-square-foot ratio. As I've explained before on the blog, the price per square foot does not stay constant across home sizes. Generally, the smaller the home, the higher the PPSF. Conversely, the larger the home, the smaller the PPSF.

To back up my assertion, I first pulled the data to see how many homes sold for $4M or higher in the first quarter. This is what I found:

• Q1 2026: 7 Homes
• Q1 2025: 4 Homes
• Q1 2024: 1 Home

Then, I looked at the average size of all of the homes that sold during the same Q1 period:

• Q1 2026: 2,466 square feet
• Q1 2025: 2,071 square feet
• Q1 2024: 2,121 square feet.

This data essentially proves my theory — there were indeed more large and expensive homes sold in the first quarter. But this should come as no surprise. You'd have to be blind not to see all of the new construction that has been taking place in all of San Carlos over the past decade. That's a topic I'll dive into a little deeper in an upcoming post.

Now, back to the argument that a high number of home sales could also drive the overall revenue to record heights, which is indeed true. But as you'll see in the next section, that simply didn't happen in Q1.

New Listings and Closed Sales.

The number of new listings and the number of closed sales are two metrics that I always keep a close eye on, and they were the catalyst for me sounding the alarm earlier this quarter. It's easy to understand why; If the number of new listings decreases, then the number of closed sales will naturally decrease. And if the number of closed sales decreases, then the total revenue will follow suit.

The first quarter of 2026 started well behind the pace of the same quarter last year, but things picked up nicely over the past six weeks:

The number of new single-family homes that hit the market in the first quarter increased by a respectable 10%, and the number of sales that actually closed increased by an even healthier 15%.

This gradually increasing trend is especially encouraging to see, since 2023 and 2024 both registered the lowest number of new listings and home sales in San Carlos in nearly 30 years, but we are nowhere near historical averages for both of these metrics.

To illustrate that point, I randomly pulled the Q1 stats for San Carlos 24 years ago in 2002, and during that period, there were 95 new listings and 85 closed sales.

The last set of data that I like to analyze is to compare the rate of new listings versus the rate of homes being put under contract (i.e. pending sales), which is what you see below:

If you're a seller in a given market, you like to see these numbers very close together, just like the 2024 data that I've circled above. If those numbers are close, it's an indication that inventory is turning quickly and that homes are not staying on the market for a long time.

In the first quarters of 2025 and 2026, you can see a sizable gap between the rate of new listings and the number of homes being put under contract. Indeed, during these periods, I witnessed quite a few homes that took a bit longer to sell. In the worst of cases, some of these homes had to be taken off the market and re-listed at a later date in order to sell.

That's not to imply that the San Carlos real estate market is not healthy. Quite the contrary. What it does tell me is that the market is not frothy like it was during the white-hot periods over the past 20 years when every home seemed to sell in the first week, no matter what the listing price was. Today, if a home appears to be overpriced for what it offers, buyers are willing to wait it out. The data backs it up.

Key Takeaways.

If you've made it this far in my quarterly analysis, you hopefully learned some key points:

• I was a licensed driver during the late 1970's energy crisis. Even though I sometimes may think and act like I'm still in my 20's, I'm clearly not.
• Larger and more expensive homes are driving the sales revenue in the San Carlos real estate market, and that trend is likely to continue.
• The number of new listings and pending sales is slowly climbing out of the trough that we experienced in 2023 and 2024, but we may never get back to the levels that we saw in the past decades.
• It's really expensive to live in San Carlos. As in, $3M expensive.

I usually end these quarterly updates with a prediction of what lies ahead. But this time, I'm at a bit of a loss. What's happening in the Middle East has the potential to have profound, far-reaching, and long-term effects on our economy. It's not just the real estate market, but the financial market, food and energy costs, and even the job market. It would be silly to make any kind of predictions about the real estate market when so much is still up in the air.

And let's not forget the constant waves of tech layoffs that are taking place. As more tech companies pivot into the AI craze, jobs are being shed at an alarming rate. Last I checked, unemployed people don't buy houses.

On a final note, I have been writing posts like this one for nearly 19 years on this site. To be exact, this will be the 2,137th article that I've written since I started the blog in 2007. Not one of these articles has been, or ever will be, written by AI. The closest thing to that is ChuckGPT, which is me dusting off my engineering brain and manually pulling stats and creating my own charts. So any typos, grammar mistakes, or occasional brilliant observations are all mine. I own them. The mission of this blog has always been to help inform and educate the San Carlos community about their homes and neighborhoods. As such, if you have any comments, suggestions, complaints, Dad jokes, or whatever will make this site more valuable to you, I would graciously appreciate your input. The comment section below is all yours.