San Carlos Is Under Attack (In a good way)
A few months back I wrote a post which reflected on the idea that many buyers searching for homes in Palo Alto, Menlo Park and Burlingame had refocused their purchasing strategy on San Carlos. This is no longer a hypothetical, it is an absolute.
For San Carlos and other sought-after mid-peninsula cities, 2012 will be known as the year that the market not only came back, but came back swinging. Believe it or not, we have currently completely wiped away losses experienced between 2008-2010. Just last year, this notion would have been thought to be impossible.
San Carlos inventory and interest rates are at historic lows.
For all of 2012, San Carlos has had more properties with a pending status than an active status.
How hot is Howard Park right now? Total active properties: 0. The last one to go on in Howard Park received double digit offers earlier this week.
If I had to give it my best guess, I would say that the demand is outweighing the supply of single family homes in San Carlos by about an 8 to 1 ratio.
The amount of buyers offering all cash in San Carlos right now would surprise you. The amount that are willing to do it a the 2M and higher range would astound you.
Where Is The pressure Coming From?
Low interest rates and an improving economy can only account for part of the picture. During the first few months we started to see Menlo Park, Palo Alto and Burlingame buyers showing up to San Carlos open houses. Understand that Menlo Park and Burlingame sell at about 20% and 21%, respectively, higher than San Carlos homes. Palo Alto sells at about 35% more. Those markets have seen similar market reversals to San Carlos during 2012. In many cases, the offers coming down in those towns were so extreme that many prospective buyers grew frustrated. Many took a deep breath and started to look at alternative cities. San Carlos seems to be the number one alternative. San Carlos mirrors qualities those towns possess, but on a smaller scale. Upon further consultation with friends and co-workers, these buyers started to figure out that perhaps they should have been considering San Carlos all along. Those buyers figured out they could get more house in San Carlos for their money and flex their financial muscles a bit more in multiple offer situations.
I decided to put this theory to a very informal test over the summer months. For each brokers’ tour on my listings I made note of each broker coming through on the tour and where they were from. In years past, the vast majority of brokers stopping by on the tour would be from San Carlos/Belmont/Redwood Shores. Taking all of the cards from the brokers on my listings over the summer, 42% of the brokers attending the open were from outside this area, with a heavy contingency from Menlo Park, Palo Alto and Burlingame. On my most recent listing on Milano Way, which had its brokers tour on Tuesday, almost half were from these three areas and of the 72 that we had stop by only 28 were from San Carlos/Belmont/Redwood Shores. This is a far cry from tours as recently as just last year, where I knew almost everyone walking through the door. Times have changed.