The $1,200,000 to $1,400,000 price zone in San Carlos has slowly become our Bermuda Triangle for properties. It’s a rather small zone, yet many properties seem to find their way into that zone and never leave.
Here are the facts:
There are currently 60 homes on the market in San Carlos. 13 of these 60 homes are in this rather small price zone. Roughly 22% of the homes on the market in San Carlos are listed between $1,200,000 and $1,400,000.
San Carlos currently has 36 homes with a pending status. Of these 36 homes, only 2 homes fall into the $1,200,000 to $1,400,000 price zone. This amount is equal to roughly 5% of all pending homes.
Finally, of all homes to sell in San Carlos over the last 3 months only 2 have closed escrow between $1,200,000 and $1,400,000. One of those homes being at $1,205,000 and the other at $1,225,000.
Why is this price zone so tough?
It’s a good question. My feeling is that you are seeing this rather bizarre phenomenon for a few reasons.
First, and I am fully aware that this sounds ridiculous, but most properties between $1,200,000 and $1,400,000 will still have some type of issue. In other words, it won’t be the perfect house. Odds are that the house will have a layout issue, location issue or some other unique issue that is keeping it from being a perfect 10. Don’t get me wrong, these are still great houses, but many folks looking to move up in San Carlos are most likely dealing with imperfections in their current 3/2 and have made up their minds that the next house they are going to buy will not have those issues, even though they may only be recognizable on a higher level of scrutiny.
Second, I am willing to bet that there are more serious buyers in the 1.5-1.75M market than there are in the 1.2M to 1.4M market for the exact reasons mentioned above. There are many people with a lot of equity built into their 3/2, looking for that four bedroom home, but will not compromise their desire to have a perfect home in San Carlos.
Third, the thought of purchasing a home in the $1,200,000 to $1,400,000 price range and then having to do a certain level of remodeling is more than most can stomach. It’s a reality in San Carlos.
There are many properties in San Carlos that fall into this elusive price zone that do have serious upside if buyers can get past the fact that, at least initially, they will not have the perfect home. However, over time, many of these homes have selling points that will give the future buyer something to work with and perhaps turn that home into their dream home without having to pay top dollar. I can think of three or four over the last six months that definitely fit this description.
I think your reasoning is dead right. I’m in a 3/2 that I’ve upgraded…now I want a 4 or 5 bdr for my expanding family. As I peer through the listings what I see is my house all over again…before I did all my remodeling…just a bit bigger. It’s a a real psychological barrier for me to plunk $300-500k additional dollars to move into a house with cheap vinyl windows, formica counters, galvanized steel plumbing and no insulation so that I can do all that remodeling all over again. It’s not mainly the remodeling *money*, more the hassle of coordinating that process all over again. No thank you.