2012 Finishes with Prices at Highest Levels in 4 Years
In 2012, the median and average selling values broke $1 million in the San Carlos real estate market for the first time since 2008. Selling values were bolstered in 2012 by rising prices and the fact that the homes sold in 2012 were on average 75 square feet larger than in prior years. The average price per square foot, which is a way to adjust for small variations in home sizes, increased by 8% in 2012. It rose from $543 in 2011 to $586 in 2012. The price trajectory is upward. Average prices per square feet were above $600 in a few months at the end of 2012. We have not seen those levels regularly since 2008. Similarly, average selling values have been above $1 million every month from May 2012 to January 2013, except one month. We have not seen streak like that since mid 2008. All of this suggests that prices are nearing their peaks from the last decade.
Prices are rising because buyers continue to bid above asking prices. The ratio of the average sales price to list price was 102.3% in 2012. This is the first time above 100% since 2007, and the highest since 2005. This is a positive sign for sellers and a strong indication that many properties are receiving offers from multiple buyers. Sellers are getting the message and adjusting their expectations accordingly. While selling values were up 5-10% in 2012, list prices increased 15%-20% over year ago levels. If buyer demand remains strong (and it shows no signs of slowing) it means that prices could soon be at record levels. Buyers that bought near the last peak, only to see huge paper losses in the following years, may now find that they have enough equity to refinance or sell and recoup their down payment. Another outcome of sellers increasing their list prices much faster than selling values is that we may see fewer homes going for above asking values, as sellers have caught up with 'fair' market value.
In addition to buyer demand, a big driver of bids above asking prices was the lack of inventory in 2012. There were an average of 28 unsold homes at the end of each month, as compared to 58 homes on the market at the end of the month in 2011. Current inventory at the end of January 2013 stands at just 11 homes. Last January there were 30 unsold homes on the market and in January 2011, there were 48 homes.
Lots of Sales in 2012
There were 317 homes sold in 2012. It was the first year since 2005 with more than 300 transactions. With inventory so low, sales volumes will have to fall in 2013, unless there is a pick-up in new listings. In January 2013, there were 19 homes newly listed, which is on the low side of average to start the year. Sales activity was also slightly below average in January 2013, with 11 homes selling in the month.
By The Numbers - San Carlos Real Estate for 2012 and January 2013
|Current Month||YTD Total or Average|
|January 2012||January 2013||Jan - Dec 2011||Jan - Dec 2012|
|Days on Market||38||51||34||31|
|Months of Supply||2.1||1.0||2.5||1.1|
|Avg $ per Sq Ft||$565||$534||$543||$586|
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