Welcome to the Jungle
Jungle/n. noun: A place or milieu characterized by intense, often ruthless competition or struggle for survival.
Yep, sounds about right.
For those of you who have found yourself in the middle of the San Carlos real estate market lately, you can empathize with the jungle reference. For buyers, the conditions are brutal. There are some closings that will take place over the next month that will post jaw dropping final sales prices. You will see massive increases, even off of 2014 numbers. If the prices were not intimidating enough, buyers are also forced to deal with what appears to be a fourth straight year of extreme inventory shortages. Looking for even more to keep you up late at night? It is almost a given that buyers will need to go into the bidding process without contingencies for appraisal, financing and the ability to have their own home inspection. For many buyers, the anxiety associated with the process is compounded even further when they lose out to all cash offers and watch the market seemingly drift endlessly upward.
What may not be so obvious is that sellers also face a market that is chock-full of dangerous pitfalls. Just as a buyer can over pay by a substantial amount, a seller can undersell by a substantial amount as well. For most sellers, this market represents a very rare opportunity to fully maximize their largest asset and move on. What we are seeing is that many sellers who had planned on retirement in a few years, or considering a move out of the area in a few years, all move up their timelines specifically to take advantage of the seller’s market. However, just how they maneuver their listing can make a substantial difference in their ultimate sales price. Listing too high in a market like this will scare everyone off. Listing too low will enable you to receive double digit offers, but the question will remain whether a higher list price would have gotten you two or three serious offers that would have taken you to a noticeably higher price point. It is a very delicate balance and one false move can make a substantial difference in the offers you receive.
What is happening in San Carlos is far different than what we have seen in any of the other upward moving markets of the past. Homes are being purchased with massive down payments and some with all cash. In previous markets buyer demand focused on San Carlos, itself, as the primary point for a home purchase. The town of San Carlos is now finishing in second, behind its schools, as the primary reason for buyers to purchase in San Carlos. Whether it will be for better or worse, San Carlos is going to come out of this recent housing market a far different town than it has been in the past. A lot will change. It’s safe to say that sleepy San Carlos is forever gone. The new residents are tough, resilient and battle-tested. After all, they had to make it through the jungle to get here.