Prices At Highest Level in Nearly 4 Years
Since the absolute bottom in early 2010, prices have risen more than 10% in the San Carlos real estate market, making up nearly half of the decline since the peak in early 2008. The graph below shows average home prices in San Carlos in a 12 month moving average to smooth out random fluctuations. Average price fell approximately $250,000 from early 2008 to early 2010. Since then, they have risen about $100,000 with most of the gains coming in the past six months. This view understates the recent upward movement in prices. Looking just at the last six months, the average sales price has been over $1.1 million. If the recent trends hold, prices would be only 5% below the absolute peak.
All price measures are increasing. The average price per square foot is at the highest since May 2009. The median selling price is the highest since February 2009.
Prices are rising because buyers continue to bid above asking prices. For the sixth 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 further. Sellers are adjusting their expectations accordingly. List prices are up 15%-20% over year ago levels, and are very close to the highest levels ever seen. Buyers that bought near the 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.
The reason for multiple buyers bidding above asking prices is two-fold. A strong local economy, historically low interest rates and a general rising optimism in the real estate market has contributed to buyer demand. Inventory has been pushed down to historically low levels. The inventory of unsold homes as of October 2012 in San Carlos was 22 homes, down from 51 homes in October 2011. More buyers and fewer sellers has led to a disequilibrium in demand and supply.
With fewer homes on the market, new listings are selling quickly. The average days on market for homes selling in the San Carlos real estate market has average 3 weeks since the middle of the year. We have not seen homes selling this quickly since the middle of 2006. Keep in mind that 3 weeks 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.
While not all homes end up selling, 2012 has been one of the most successful years for sellers in achieving their main objective (selling their house!). Through the first ten months of 2012, 42 sellers have had their listings expire or were cancelled (taken off the market). Not all of these sellers were unable to sell their home, some of them changed their plans and decided not to sell. But overall, it is a good measure of buyer success. Last year at this time, more than twice as many listings, 97, had expired or were cancelled. Even during the boom years, 80-90 homes would be withdrawn from the market. In 2012, there will likely only be 50 homes that fit that scenario.
Sales Activity Rebounds from September
There were 27 homes sold in October 2012, continuing the recent strong pace of sales that was interrupted only by a somewhat slow September. With inventory so low, it is impressive that sales have managed to stay so high. In the first ten months of 2012, there have been 265 homes sold, as compared to 247 homes sold in the first ten months of 2011. Sales have been steadily picking up since reaching a bottom in 2009 with 236 total transactions. There is an outside chance that San Carlos could see 300 sales, for the first time since 2005.
By The Numbers - San Carlos Real Estate for 2012
|Current Month||YTD Total or Average|
|October 2011||October 2012||Jan - Oct 2011||Jan - Oct 2012|
|Days on Market||48||26||34||29|
|Months of Supply||1.7||0.8||2.5||1.1|
|Avg $ per Sq Ft||$518||$568||$544||$566|
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