“Here we go again.” This was the phrase uttered last night by one of the most respected and veteran realtors in San Carlos. My listing at 812 Cordilleras had 10 offers last night after being on the market for 4 days. Earlier in the week Justine Ford’s listing on the Alameda had multiples. The week before, Maxine Dumas’ listing on Arroyo had at least 6. The week before that, Cashin’s listing on Birch had multiples as well. For those of us that monitor the San Carlos market on a daily basis, the sudden swelling of frustrated buyers trying to get into San Carlos is nothing short of alarming.
How is this possible considering what is going on with the rest of the country, even many other parts of the Bay Area? Here are the Top 5 Reasons:
(1) San Carlos has gained wild popularity for a number of reasons that are mentioned throughout this blog, including Laurel Street, small-town atmosphere, community and outstanding schools.
(2) Inventory is extremely low. Currently, there are only 35 “Active” Single Family Residences in San Carlos. San Carlos has nearlyl 5,500 Single Family Residences. This means that about one half of one percent of the homes in San Carlos are available for sale.
(3) Interest rates have not only stayed low, they have actually decreased over the past few weeks.
(4) Our local economy is strong. Insulated by Silicon Valley to the south and by the biotech firms and San Francisco to the north.
(5) Massive relocation efforts by many biotech companies are responsible for a heavy percentage of buyers’ offers in San Carlos. Many of the relocation employees have buy-down mortgage incentives which greatly increase their ability to purchase a more expensive home.
Bottomline: Get ready for another frantic market in San Carlos.
14 Comments
Congratulations on getting so many offer in so few days. Why did you market it for only 4 days?
Any thoughts on why your listing fared so much better than the similar sized and priced home on Walnut?
Dear Visitor to the Area,
There are a few reasons why we moved so quickly. First, I found the sellers a larger home in San Carlos, off market, and they needed to act quickly.
The remaining reasons are all related to market conditions. First, given what has gone on since the turn of the new year with all of the multiple bids I knew the market was saturated with buyers under the 1.2 million mark. Second, the rest of the inventory in our class, 2/1, was stale. Third, this property had a large, level lot. This enabled us to appeal to first time home buyers as well as those who may be looking to buy a smaller home and build a much bigger home….i.e. cast a much larger net. Fourth, I thought we would catch some of the buyers who lost out on the Arroyo and Birch properties the week prior, figuring they could spend a little less and add on to the existing home (we ended up getting several who lost out on those two properties). Fifth, both homes on Walnut backed up to Laurel Street. Obviously, we had a location advantage. The 2/1 on Plymouth was our only other competition and it was not in Howard Park and very close to San Carlos Avenue.
We worked very hard last week to bring it to market a little earlier than expected and it apparently paid off.
Thanks for the post.
Bob Bredel
REMAX Today
Thanks for the details! Well done – earned your commission.
Talking about adding on to home – how realistic do you think the buyers are about the time and cost to do that? I’m guessing someone would want to add ~1000 sq ft (2 bedrooms, 1 1/2 baths + living area) to that home.
I estimate that will cost in the $300K ballpark. I don’t know what the final sale price was, but by the time it is all said and done, it will probably have cost close to the $1.2M magic number.
Dear Visitor to the Area,
My understanding is that the people who had the contract accepted will not be adding on, but for the sake of argument we can take a closer look.
300K is probably a low figure. Currently, San Carlos homes are being built by contractors at rates of $275 to $350 a square foot. Even if you take the lower number, you start out with a cost of $275,000. This does not take into account permit fees, design fees and carrying costs of the construction loan or home equity line of credit. Additionally, with a remodel such as the one you are describing the new owners would need to move out for at least six months and absorb the rent costs. Additionally, in order to make the home “flow” the contractor will most likely need to alter other rooms in the existing house. This will add to the total square footage being billed by the contractor. For example, you would probably want to remodel the kitchen, update the electrical, etc. Finally, you need to prepare yourself for at least a 15 month process by the time plans are drawn, design review is completed and the contractor finishes the project.
I would say closer to 1.3 – 1.35 on the total cost and at least 2 years off of your life with all of the added stress : )
Thanks,
Bob Bredel
REMAX Today
Why are the large listings on Belvedere and Greenwood still sitting? Is the top end of the market incredibly soft?
Hi JJR,
The top of the market is not soft in my opinion. As you get closer to 2 million dollars the pool of prospective buyers in San Carlos shrinks drastically, but they will still spend the money for quality construction on a great lot.
First, expect the status on Belvedere to change to “Pending” in 48 hours….just a hunch…
The Greenwood house, offered by Cashin Company, is a tough sell. Part of me feels terrible for the builder because they obviously put a lot of time in on that property. There were a few mistakes made here. First, originally offering the property for a hair under 2 million was obviously a mistake. People will pay for new construction in San Carlos, but the home has to fit one or more of these three categories (1)the property has to have a large, level lot (2) a great view; or (3) be on a highly desirable street. The Greenwood house does not have any of these. In fact, there is really no usable yard, no view and faces Cordilleras which has a fair amount of traffic on that particular stretch near Brittan.
Last year there were 11 homes that sold between 1.9 and 2.6 million that also sold in under six weeks. Additionally, 8 of these homes sold in under 17 days. This is a fairly good indication that buyers in this price range will pay for quality when it is available. Finally, 1939 Birch was on the market at $1,750,000 for only 7 days before it went “Pending” a little over a week ago. There is another in White Oaks that will be coming on soon in the 1.650 – 1.700 price range that will most likely be gone within 10 days with multiple offers.
The 1.5 and higher market is not nearly as hot as the 900K to 1.250 market, but most homes should move without issue as long as they are priced correctly from the onset.
Hope this helps.
Thanks
Bob Bredel
REMAX Today
More than a “hunch” on Belvedere, I guess 🙂
Did it go for asking?
That…I cannot tell you for a while longer….but it would not surprise me if the buyers and sellers were pleased with the results.
How is the market for townhome in San Carlos hills?
Are they getting as much action as single family homes in the same price range?
What’s your opinion on future appreciation and resilience to softer market of townhome vs. single family
Thanks for bringing townhomes and condos to the table. So much of the blog is dedicated to single family residences…townhomes and condos tend to get overlooked.
Let’s start with the obvious. Townhomes and condos typically offer a lower entrance point into the housing market (although there are many townhomes in San Carlos which are far more expensive than some of the single family residences). However, they usually will not appreciate at the same rate as a single family residences in San Carlos. Additionally, in a down or flat market, their values tend to drop at a greater rate.
The most telling statistic is found when examining the past three months sales of condos and townhomes in San Carlos. In the past three months there has not been one sale where the final purchase price was equal to or greater than the list price. More succinctly, all sales prices were lower than the final list price. Granted, the last three months would cover November, December and January (typically slower months for real estate), however, during this time period single family residences in San Carlos closed at 100.51% of their final list price. This disparity cannot be ignored.
All of that being said, I still believe the townhome market, especially in the hills of San Carlos, will do very well. Some of the townhouses offer more square footage than many of the single family residences in San Carlos at a much more affordable price. With the amount of people currently trying to get into San Carlos I would have to believe that the future market for those townhomes would be relatively strong, especially if our overall inventory remains low.
Ready to reveal the price on Belvedere?
Am I ready to reveal the price? Yes. Can I? No….soon enough, though. It will close escrow shortly. As soon as it closes I will post it….
Thanks,
Bob
Dear JJR:
My clients just closed escrow on 64 Belvedere at $1,970,000.
Thanks,
Bob Bredel
Realtor
REMAX Today
Thanks for the info. Nice deal.