Breaking the $2M Barrier in San Carlos

[Editor's Note: The following is a blog post by San Carlos resident and realtor, Chuck Gillooley.]

A Magic Number.

Unlike some other well-heeled communities around us on the Peninsula, it’s still an eyebrow-raising event when a home sells for over $2M in San Carlos.  After all, last year not one single home of the 278 ones that sold in San Carlos broke the $2M mark (the highest was $1.8M).  And in 2010, only 3 homes achieved that magic mark, representing only 1% of the total homes sold in San Carlos that year.  So when a house pops that $2M barrier, it’s usually a noteworthy event for those who follow the real estate market in San Carlos.

There are a number of reasons why homes don’t yet fetch $2M here.  The vast majority of the existing housing stock in San Carlos simply isn’t $2M material.  With the typical home in the flats being of the 3BR/2BA 1,500 square foot variety on a smallish-sized lot, that kind of price simply isn’t going to happen — we’re not Menlo Park, after all   You have to head into the hills to see homes large (and new) enough to command a price north of $2M.

Age is another factor.  Many of the homes in  San Carlos were built around WWII, which means they’re pushing 60-70 years of age now, and many are in dire need of upgrading.

But all of this is about to change.

The 4 Minute Mile.

It won’t be an overnight phenomenon, but there’s a significant shift occurring in San Carlos right now that will make the $2M mark tumble with more regularity.  There are several key factors behind this shift:

• The Economy:  It’s no secret that the housing market is on absolute fire right now here in the City of Good living.   If you follow the weekly updates on this site, you’ll know that good homes are fetching 5-15% above their asking price, so homes don’t have to list at $2M to actually fetch that price.  Such was the case with 1528 Saint Francis Way, which listed at $1,895,000 and sold for over $2M with multiple offers earlier this year.   The buyers of high-end properties are back in the game, and they’re not shy about spending this kind of money for the right place.
• Development.  The strengthening economy is putting a whole bunch more money back in the pockets of homeowners and consequently developers.   As you drive around town, you will start to see more and more chain-link fences going up around homes as significant development projects get underway.   There is one prominent builder in San Carlos who has no fewer than 5 high-end building projects going on right now — you can rest assured that a number of these will sell for over $2M.   And there are other developers ready to pounce on the right opportunity to replace some of the aging homes in San Carlos with a sparkling, brand new large home.
• Palo Alto, Menlo Park, and Burlingame.  As funny as it sounds, San Carlos is still a bargain when you compare it to the stratospheric prices that homes in these communities are fetching.  $2M sales???  Burlingame already has 23 this year, and Menlo Park has 50.  Palo Alto?   How about 106??!!   Some wealthy buyers who are tired of getting priced out of this frenzy are finding that they can get more for their purchasing dollar right here in San Carlos.

It’s similar to the 4-minute mark in the mile run — once Roger Bannister shattered that vaunted milestone, it didn’t take long for everyone other elite runner to make that achievement seem mundane.

Look for that to happen with the $2M mark in San Carlos over the coming months.

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