San Carlos Real Estate - August 2012

Homes Still Selling Quickly in San Carlos

The average days on market for homes selling in the San Carlos real estate market was 20 days in August 2012. In the most recent four months the average days on market has been 20 days. In the first four months of the year, it was 42 days. As inventory has plummeted, and homes that has been languishing on the market finally sold in the first part of the year, buyers have had to compete over a modest supply of new listings. The average days on market measures the amount of time a home spends on the market before it is sold.

While not all homes end up selling, those that do are selling fast. (As a side note, sellers appear to have a much better chance of selling their home this year, than in years past. Through the first eight months of 2012, there have been 34 listings that expired or were cancelled from the MLS. Some of those represent sellers unable to generate an acceptable offer, in other cases sellers may have just changed their mind. Regardless, the number is down sharply from prior years. In the first eight months of 2012, 79 listings expired or were cancelled.)

Keep in mind that 20 days is the average time spent on the market. Many homes were listed and then sold in 10 days or less. Buyers interested in San Carlos should actively follow new listings. Some homes are even sold just a day or two after listing. In cases like that, it is advantageous to already be working with a Realtor who often knows what homes are going to be coming onto the market. Otherwise, prospective buyers may find themselves missing out on new listings and/or being in situations where they have to make a quick offer.

Fourth Month of Selling Values Above List Prices

For the fourth straight month, the average ratio of selling price to list price in the San Carlos real estate market was above 100%. This is a positive sign for sellers and a strong indication that many properties are receiving offers from multiple buyers. The last time we saw ratios continually above 100% was in 2007. It is a sign that prices are poised to rise. We are seeing similar experiences in other Peninsula communities like Burlingame and San Mateo.

Data Points to Rising Prices

Our normal measure of price levels, average price, median price and average price per square foot, show signs of increases when we look at the 12 month moving average.

When looking at a 12 month moving average, the average price per square foot reached $550 for the first time since October 2010, though it was between $540 and $550 for most of the time in between. Notably, each of the past three months has had an average price per square foot at or above $575. The last time that a single month had an average price per square foot above $575 was February 2010!

One word of caution is that some of the recent upward movement in the average and median price levels is exacerbated due to bigger homes being sold in 2012 than 2011. This can be seen by the fact that average and median prices appear to be rising much faster than the average price per square foot. Still, median selling prices have been above $1 million in each of the past four months. We have not seen a sustained run like that since early 2008. Price levels are clearly up for their 2009-2011 lows.

Market Still Very Inventory Constrained

In addition to strong buyer demand, home prices are being catalyzed by low rates of inventory. At the end of August 2012 there were about 30 unsold homes on the market. Last there at this time, there were 51 homes for sale. For all of 2012, San Carlos has ended the month with an average of 30 unsold homes, versus nearly 60 unsold homes in 2011. That means that each buyer has about half as many homes from which to choose and each seller has half as much competition from other listed homes. With strong buyer demand driven by a healthy local economy and favorable interest rates, there just isn't enough supply to go around, leading to the aforementioned offers above asking.

Sales Up in 2012

One of the driving factors in the inventory decline has been a rise in sales. In the first eight months of 2012, there were 219 homes sold, as compared to 191 homes sold in the first eight months of 2011. That is an increase of 15%. At the current rate, we are on pace for 300 homes sold in San Carlos for the first time since 2005. Sales reached a nadir in 2009 when there were 236 transactions.

By The Numbers - San Carlos Real Estate for 2012