2022 Started off Great for Home Prices in San Carlos CA… then July came along!
2022 started off great for single family home sales in San Carlos CA. Prices started in January at $1,375/SqFt of living space, which meant that an average home cost around $2,600,000. Prices kept rising until they peaked in June 2022 at $1,545/SqFt; that’s a 12% increase in the homes for sale in San Carlos CA in 6 months.
Then inflation fears coupled with rising interest rates led to a decline in the market. Prices declined from $1,545/SqFt in June 2022 down to $1,143/SqFt in December 2022; that’s a 26% decline from the June 2022 peak. San Carlos CA home prices basically lost two years of appreciation; values are now similar to those experienced in January 2021.
Inflation and Interest Rates Hit the Market during 2nd Half of 2022
This slow down also resulted in fewer closed home sales in San Carlos CA. The first half of 2022 was normal in terms of closed sales. We had 131 single family homes close escrow in San Carlos CA. The average for the first half of the year between 2018-2020 was 132 sales. We exclude 2021 because that was just a very unusual year; everything in 2021 was beyond previous norms.
Then in the second half of 2022 we only closed escrow on 103 single family homes; the average between 2018-2020 was 165 homes. So, in the second half of 2022 sales were down about 37% from the norm. Inventory did not build up because there were only 167 New Listings vs. 177 on average during the first half of the year. Then during the second half there were only 141 new listings vs 162 on average. So, there were about 10% fewer newer listings in 2022 than in previous years, again excluding 2021. Furthermore, from September through December 2022 there were 34 single family home listings either withdrawn, cancelled, or expired vs. only 11 homes during the same months in 2021. So, we have fewer buyers, but we also have fewer active homes for sale in San Carlos CA.
So, what does all this mean for 2023? We believe that the first 6 months of 2023 will continue to be challenging for both home sellers and buyers. Sellers have fewer buyers, often only receiving one offer and making concessions like completing property repairs or paying the buyer’s closing costs to make the sale. Buyers may have less competition, but those that need to finance their home purchase will face rising interest rates. Let’s hope for some relief for both buyers and sellers during the second half of 2023.
For more information about historical home prices in San Carlos CA visit https://sancarloslife.com/the-lost-year-in-san-carlos-ca-real-estate/