No Sign of Slowdown in Price Appreciation in San Carlos
Prices continue to rise in the San Carlos real estate market. Here are the highlights as of April 2014 (as compared to data since early 2004):
- The average price per square foot was $800, which is only the third month at or above $800 ever.
- The average price of $1,521,000 was only the second month above $1.5 million (and as only the third month above $1.4 million).
- The median price of $1,430,000 was only the third month above $1.4 million.
- Bidding wars continue. The average sales price to list price ratio was nearly 111%. For the year, the average sold home has gone for close to $150,000 above the asking price (though even in this market there are some very fully priced homes that sell for less than the asking price).
- Almost every home is selling and doing so quickly. The average days on market for April was 15 days and for the year so far it is just 17 days.
The chart below shows the 12 month moving average median price price, average price and average price per square foot in San Carlos. The moving average helps to smooth out random month-to-month fluctuations to give a clearer view of trends. All signs point to sustained price increases over the past 20+ months. In the past 12 months, prices are up around 15% to 20%. Since reaching bottom in early 2012, prices have increased by more than 35%.
In practical terms, imagine a hypothetical 1,800 square foot home that sold for $550 per square foot or $990,000 in early 2012. That same home would have been expected to sell for around $750 per square foot, or $1,350,000 in the past few months. Based on the most recent sales, it might even go for $800 per square foot or above.
As measured by the ratio of sales price to list price, San Carlos may be seeing the most intense bidding wars anywhere in the mid-Peninsula. The ratio was nearly 111% in April 2014. This is an incredible figure. In a market where the average price is around $1.4 million it means that the average bid above asking is approximately $100,000. Moreover, this was actually the lowest ratio in three months. Buyers continue to vastly outnumber sellers. Until the ratio of sales price to list price reverts back to 100%, it is a strong signal that prices will continue to rise.
Sales Activity High Despite Lack of Inventory
After a typically slow start to the year, sales activity has picked up in the San Carlos real estate market. There were 26 homes sold in April, ahead of the 23 homes sold in April 2013. Through the first four months of 2014 there have been 79 homes sold, up from 71 sales through the first four months of 2013.
Obviously, sellers have been successful in terms of receiving high prices, but they have also been successful in terms of actually making the sale. Through the first four months of the year, only four listings have expired of been cancelled. These do not necessarily represent a failure to sell (could just be a change of heart by the seller), but it is a reasonable proxy for unsuccessful sellers. By comparison, there were 10 such listings in the first four months of 2013, 16 in the first four months of 2012, and 38 in the first four months of 2011.
Sales have risen despite a dearth of inventory and without an uptick in new listings. In fact, new listings are almost exactly on pace with what they were in the year prior.
Inventory levels have tumbled to record low levels in San Carlos. At the end of April 2014 there were just 11 unsold single family homes in the city. Inventory levels usually follow a normal seasonal pattern. They are lowest in the winter months and highest in the summer months. We should be seeing inventory rise as a flood of new homes are listed and it takes time for all of them to sell. We are starting to see that seasonal flood, but because the vast majority of homes are selling within a few weeks, inventory actually fell from 17 unsold homes in March.
With so few homes sitting on the market, it is not too surprising that we continue to see bidding wars.
By The Numbers - San Carlos Real Estate
|Current Month||YTD Total or Average|
|April 2013||April 2014||Jan-Apr 2013||Jan-Apr 2014|
|Days on Market||21||15||23||17|
|Months of Supply||0.7||0.4||0.9||0.7|
|Avg $ per Sq Ft||$692||$800||$646||$808|
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