The San Carlos Real Estate 2025 Mid-Year Report

The Optics.

When I talk to people lately about the status of the current real estate market, I hear comments like “It seems like things are picking up again,” or “I see For Sale signs everywhere — things must be rebounding.” The common theme in these comments is the belief that our local real estate market is emerging from the two-year slump that resulted in record-low numbers in new listings, pending sales, and closed sales.

While some of this optimism is founded, the actual data paints a very mixed story about our local real estate market, and provides a valuable lesson that what you think you are seeing may not actually be what's happening.

In other words, the optics and the data don't always align.

The Data.

The first chart that I always like to lead with when I'm creating these quarterly results is the total sales revenue for San Carlos. The chart below reflects the total sales revenue for both single-family homes as well as condos, and is the only chart where condo sales are referenced, since they only account for about 11% of the total residential revenue in San Carlos. The rest of the charts below this one focus solely on single-family residence sales.

The first six months of 2025 posted an 8.2% increase in overall sales from the same period in 2024, and even eked out a 5.2% gain over 2023. That's a respectable performance, considering that interest rates still remain high, and the stock market volatility pulled many buyers out of the market earlier this year.

But it also gives a slightly false sense that the local real estate market is growing again, when in reality, some of the other data contradicts this. If you recall from the last quarterly update, the four key data components that I analyze to assess the direction of our market are:

• New listings
• Pending sales
• Closed sales.
• Average and median home prices

The stronger the growth in each of these individual segments, the stronger the growth of the overall market actually is. Let's take a look at each below.

Home Prices Continue to Rise.

The chart below shows the average and median prices for all single-family homes sold in San Carlos in the first six months of 2025, and compares that to the same period of the previous four years:

The average price of a single-family home in the City of Good Living nearly hit $2.9M in the first half of 2025 — just shy of the record of $3M for the same period in 2022. Just let that sink in for a moment — as a point of reference, in 2001 the average price for a San Carlos home was $699,000 — this means that home prices in San Carlos have increased 315% in just 24 years.

Listings Up, Sales Down.

This is the part of the story where the data doesn't quite match the narrative. In order to generate any kind of revenue in a real estate market, you need three things to happen – First, you need listings. Second, you need buyers for these listings, and finally, you need those deals to close. In order to be in what would be considered a “growth” market, you would expect to see increases in all three of these metrics. But that's not what is happening in San Carlos right now.

The two charts below are very similar — the first compares new listings versus pending sales for the first six months of 2025. The second one shows the same new listings except they are now compared to closed sales (i.e., when it actually becomes revenue.

This chart shows two very different data trends. On one hand, the number of new listings increased by 33% from the same period last year. That's normally a very good thing to see because in theory it should help to alleviate the severe inventory constraint that has gripped the San Carlos market for the past three years.

But the Pending Sales data does not follow the same trajectory. In fact, it essentially flatlined to the same time period in 2024, which was one of the lowest performing periods in San Carlos history. In fact, the difference of 54 new listings (167) versus pending sales (113) was the largest gap that I could find on record.

It's important to note that some of those 167 homes that were counted as new listings were actually cancelled and relisted during the same time period, meaning that they are double-counted. But even after accounting for those relisted homes, the gap is still jarring.

The next chart is very similar except it compares the same “new” listings to actually closed sales, which is where the revenue is generated.

What's most compelling about this graph is that not only does it match the trend of pending sales (flatline) from the previous year, but the 105 closed single-family home sales is the lowest total for the first six months of a year since 2009 – the first full year of the Great Recession.

So What's Really Happening?

Going back to the theme at the beginning of this post, where the perception does not necessarily match the reality — the San Carlos real estate market in the first half of 2025 was akin to riding a Peloton bike. We burned a bunch of calories, but we didn't really didn't go anywhere. While the number of new listings increased dramatically, the number of those listings that were put under contract and ultimately closed remained at historical lows.

This means that the 8.2% increase in total revenue was not the result of true market growth. Instead it was mostly the result of price appreciation, and NOT an increase in home sales. Can you say “inflation”?

But not all is gloom and doom in the San Carlos real estate market. The results of the first six months of this year were severely curtailed by the on-again-off-again tariff war, which absolutely rocked the stock market in April. But all of the major stock indices have since quietly recovered from that drop, so the purchasing power for buyers is right back where it was at the beginning of the year. Once the consumer confidence index follows suit, the market activity should increase.

After all, there are still more buyers looking for homes in San Carlos than there are homes for sale. The key for home sellers going forward is that pricing will be especially under scrutiny. If this data tells us nothing else, it's this: If a home is listed too high, it will simply sit. We're not in a crazy, overheated market like the one that has dominated most of the past 20 years in San Carlos.

Optimism needs to share the stage with Realism.

I'll re-run these very numbers after the end of Q3. In the meantime, stay tuned to the blog for more pertinent data on the San Carlos real estate market.