San Carlos Real Estate Report Card: 1H’09.

June Swoon?

Not really.  There was no swoon in June, but it wasn’t a blowout month either.   Entering last month, I stated that there was the potential for 30 sales to close in June,  but it fell a little bit short at 23.   Nevertheless,  it was still easily the best sales month we’ve had so far in 2009.  That’s not bad considering where the economy is at.

The average sales prices reflect what I’ve been saying all year — the demand for homes under $1M is dominating our real estate market market this year.   In fact, of the 94 homes that sold in San Carlos so far in 2009, 63% of them sold for under $1M.   Contrast that with 2008, when 46% sold for under $1M during the same period.   The economy, interest rates, and a plethora of first-time buyer incentives have simply made this segment more attractive than the higher end.    But look for that to change a little bit as prices continue to fall and lenders like Bank of America start to roll out some attractive jumbo loan packages.

Here’s the story:

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General Trends

Here’s a graphical look at the monthly sales performance in San Carlos, dating back to last year.   See below for a more in-depth analysis.

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June 2009 Stats.

Here’s the summart from June ‘09 compared to the same month in 2008:

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YTD Sales Figures Through June ‘09

Here’s a snapshot of the unit sales to date in 2009, compared to previous years

And here’s the same data as above relative to the first half of the year…

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Looking Ahead…

The big question right how is whether the real estate market will take it’s normal summer siesta in July and August.   As you can tell from the annual graph above, October and November escrows drop precipitously every year, reflecting the sales activity during the summer months.    But this year could be different from past years — interest rates are starting to creep upwards, and most of the home-buyer incentives are due to expire at the end of the year.  There are definitely reasons to keep shopping.

There are about 27 homes that are in contract right now that could possibly close escrow in July.  If so, that would surpass June as the best month so far in 2009.   Let’s hope….

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San Carlos Real Estate Report Card: February ‘09

Hanging in there…

If you recall from the post I wrote last month about how 2009 was shaping up versus 2008, the real estate market in San Carlos got out of the blocks really slooooooowly this year.  At the end of January, we were almost 60% behind the same period in 2008 — and 2008 was already considered to be a down year.    We definitely started the year out in a big hole.

February ‘09

Looking at the pending sales heading into February, I estimated that 12 homes would close escrow this past month — in reality only 9 of those homes closed in February.  But while that result isn’t stellar, it’s not totally surprising to see this kind of a fall-off, especially given the condition of the economy.   And even with only 9 home sales, we were able to close that 60% gap just a little bit.

2009 Year-to-Date (through February)

There’s an old saying that a picture is worth a thousand words. This pictures will easily fetch several thousand:

San Carlos YTD Sales: Through Feb 09

Let’s dive into these numbers in a little more detail:

• Home Sales:  14 homes have sold to date in 2009.  This equates to a decrease of 44% compared to the 25 that closed escrow during the same period in 2008.
• Average Sales Price:   The average price of all homes sold so far in 2009 is $1,060,679.  That’s a decrease of 13% from the average price of $1,219,276 during the same stretch in 2008.
• Total Sales Revenue: The total volume of homes sold in 2009 so far is $14,849,500.    That’s a drop of 51.3% from $30,481,888 for the same period in ‘08.  That’s a big drop…
• Days on Market.    It took an average of 51 Days for these 14 homes to sell in ‘09.   Compare that to 34 days for the same period in ‘08.

What does this mean?   Obviously, fewer homes are selling this year than last and they’re taking longer to sell.   But the huge drop in sales volume suggests that less expensive homes are making up the bulk of the sales volume so far this year.

If you’re interested in the details, here’s the home sales data that comprised both periods:

San Carlos YTD Sales: Through Feb ‘09

San Carlos YTD Sales: Through Feb ‘08

Looking Ahead

Going into March, there is a total of 26 homes in various stages of “Sale Pending” in San Carlos.  Since 26 homes sold in March ‘08,  a minimum of 15 of these will need to close in March just to maintain the current gap of 44% below ‘08.  The higher percentage of those 26 that close, the more we’ll close that gap.   I’ll issue another “Report Card” at the end of March, so tune in then to see how things turned out!

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San Carlos home sales already falling behind 2008 pace…

I mentioned in a previous post that the performance of the San Carlos real estate market in the first three months of the new year would likely set the tone for what is going to happen in all of 2009.  If that statement turns out to be true, then 2009 has the makings of being an ugly year.

January ‘09

Since today is the final working day of the month and no escrows are scheduled to close, I figured it would be safe to take a close look at the data for January.    Ugh…  At first blush, it wasn’t too bad.  The data showed that 10 homes sold in January, and this would have been down only 2 from the 12 that sold in January of 2008.   Upon further review though, 5 of the 10 homes that show as January sales actually recorded on the last 2 days of December.  What does this mean?

Only 5 homes closed escrow in San Carlos in all of January 2009.

…or a 58% reduction from January 2008.

February ‘09

One way to predict the performance of an upcoming month is to take a look at the pending sales.   This is a reasonably accurate gauge since the average escrow period is 30 days or longer;  in other words, if it’s not already pending today it won’t likely close in February.  Taking that logic into account, here’s what February looks like:

• 5 Pending No-Show:   (Contingencies likely all removed, highest probability of closing escrow.)
• 8 Pending with Show:  (Contingencies likely still in place, consequently lower probability of closing escrow.)
• 1 Pending with Release:   (Home is in contract, but some sort of release clause is in place — possibly contingent on the sale of the buyer’s home.)

Assuming an 85% closing percentage (which is admittedly optimistic,) this equates to 12 home sales in February 2009 which equals the same figure of February 2008.

Summary

What does this all mean?  Well, numbers are funny — while they’re very “black and white,”  you can still look at them from an infinite number of angles.  In this case, the San Carlos real estate market is starting off the year about 30% behind  last year.    However, if you look at trends and directions, there’s growth from Jan-Feb of 2009, versus no growth in the same period of 2008.

What this really means is that March 2009 will be the month of reckoning in San Carlos.   It should spell out very clearly whether we’re starting to pull out of a funk, or if we’re destined to fall behind what was an already soft 2008.

We’ll do another analysis just like this one at the end of February.  Should be very interesting…

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