San Carlos Real Estate - April 2012

Buyers Face Competition for Dwindling Supply

The San Carlos real estate market remains extremely inventory constrained. Inventory was low at the end of 2011 and has actually fallen further in 2012, completely against the typical seasonal pattern evident in at least the past seven years. There were less than 25 homes for sale in San Carlos at the end of April 2012, the lowest April total in many years, and the lowest total in any month since December 2004. At the current sales rate, there is about 3 weeks of supply on the market. Over the past few there years there has normally been 3 months of supply on the market.

Sales Up in 2012

One of the driving factors in the inventory decline has been a rise in sales. In the first four months of 2012, there were 96 homes sold, as compared to 69 homes sold in the first four months of 2011.

Another variable pushing down inventory is that the number of listings is falling. There have been 122 homes newly listed onto the market in last four months, down from 160 homes in the first four months of 2011.

The combination of sales activity up 39% and the supply of new listings down 23% has pushed inventory sharply lower.

 

Even with modest new listings, sales activity can remain elevated for the next few months (indeed, an advance measure of sales that looks at accepted, but not closed offers, suggests strong sales again in May). However, unless lots of new listings come onto the market, expect sales activity to be tepid for most of the rest of the year. There just are not enough homes for sale out there.

This becomes clear when looking at the average days on market. The average home sold in San Carlos in 2012 was on the market for 42 days, up from 27 days in the same period in 2011. Is the average home really taking 2 weeks longer to sell? Not likely, given the lack of inventory. Rather, homes that languished on the market for multiple months and would normally not get any takers are being sold. For a short while this raises the average days on market. Once these homes are gone the average days on market should decline sharply.

Few Signs of Price Appreciation, Yet

When inventory levels fall sharply, prices often rise in response as buyers have to compete against each other for fewer and fewer for sale homes. To-date, we have not seen strong signs of price appreciation in San Carlos. In fact, despite some up and down blips, average and median selling values remain in the $910,000-$950,000 range. The average price per square foot has remained approximately $540 for the past eighteen months.

The data does suggest that buyers are making offers that match sellers' asking prices. The average sales price to list price ratio has averaged 100 in 2012. (A reading above 100 means that the sales price was higher than the final asking price). The ratio was below 100 ever year from 2008 to 2011 (when prices were flat/falling) and above 100 every year from 2004 to 2007 (when prices were rising).

Thinking of buying or selling a home in San Carlos?

If you're interested in learning more about the San Carlos real estate market, considering selling your home in San Carlos, or thinking about moving to San Carlos, please drop me a line and I'd love to connect with you.

By The Numbers - San Carlos Real Estate for 2012