The current rebound in the San Carlos real estate market can be attributed to a variety of factors: a bounce back in the stock market, the fear of rising interest rates or even the influx of quality inventory. However, one additional and lesser known factor has been the surge in buyers who have abandoned searches Menlo Park and Palo Alto.
As much as most of us in San Carlos would like to believe that we are comparable with Menlo Park on housing, the truth of the matter is that Menlo Park is still a solid 10-12% higher than us on comparable properties. Palo Alto is a solid 20% higher than us on comparable properties, and that percentage is even higher in the more desirable areas of Palo Alto. About a year ago, it became obvious that more and more Menlo Park and Palo Alto agents were looking in San Carlos for their buyers. The traffic from agents in these two towns really picked up at our brokers’ tours, private showings and open houses. When that trend continued well into this year, it was apparent that we were witnessing a serious movement or shift in focus for many buyers.
I decided to investigate a little further and had an extensive conversation with two high producing agents in Palo Alto. Both had the exact same explanation. Essentially, they had many buyers who just could not stomach or afford to pay Palo Alto and Menlo Park prices, and many found they could find a better, more affordable home in San Carlos. Both also had a similar explanation on San Carlos as a city. Both mentioned that many of their clients never really considered San Carlos, but they ended up going to San Carlos for dinner with friends or had read online about the high ranking elementary schools. Consequently, many were surprised at what they found. Additionally, many who already live here continually give San Carlos a five-star review. I think the secret on San Carlos has been out for a while, but what we are finding is that it has finally trickled down to folks who were once set on a Palo Alto or Menlo Park address. The references, schools and downtown started to have made a substantial impact on those looking just a little south of San Carlos.
Whether this phenomenon continues over the next year remains to be seen. However, currently the presence of this new group of buyers is being felt with the sudden competitiveness in our market.
I would guess that a flood of Facebook employees looking for homes in Palo Alto/Menlo Park will add to that impact.