Is San Carlos Becoming the Next Palo Alto?

Where Are We?

If I described the following city to you...

• Homes selling with multiple offers for $900-$1000/sq foot.
• Top-notch schools.
• Popular downtown shopping district with packed restaurants.
• Perfect mid-Peninsula location.

... you'd probably think I was talking about Palo Alto, or maybe Menlo Park.  Especially with those types of home prices.    But the city I described above is actually none other than San Carlos -- our City of Good Living.

Only a decade ago, San Carlos was a quiet bedroom community that reveled in its obscurity and quiet lifestyle.   When I worked in Silicon Valley, prior to becoming a Realtor, and told people that I lived in San Carlos, 9 out of 10 had absolutely no idea where San Carlos was.  Seriously!  "Is it close to San Ramon?"  was one of the more comical responses.    Some thought it was south of San Jose!  

Clearly, San Carlos WAS the best kept secret on the Peninsula for many years.

But those days are gone.  San Carlos now gets mentioned in the same breath as Palo Alto, Burlingame, and Menlo Park for many home buyers.  Even buyers who hail from the heart of Silicon Valley know exactly where San Carlos is, and what it has to offer.  And they want in.     

San Carlos' slow migration out of obscurity and into the limelight has come at a steep price for home buyers.   As I published on the White Oaks Blog this past week, home prices in the first quarter of 2013 have either matched or exceeded all-time highs for average sales price, and price per square foot.  And this is just for the first quarter of the year, which is not typically the strongest of the four quarters!  

In that article, I focused on prices for 3-bedroom single family residences in San Carlos, since these are the "bread and butter" homes of the local housing stock -- there are more 3-bedroom homes to sell every year than any other configuration.  The statistics were jaw-dropping.   In the first quarter, the average price per square foot of a 3-bedroom home in San Carlos rocketed to $658/sq foot.  This is the highest leve that I could track on record.   And that's just the average -- recent sales at homes like 1800 Elm Street at $1,000 per square foot, and 1311 Geneva Avenue at $955/sq foot will certainly drive this average even higher when the numbers are generated again.   

The table below shows the five highest 3-bedroom home sales in San Carlos since the beginning of the year, as measure by price per square foot.  Click on the addresses for more information on each property:

Address Sold Price Size (sq ft) $/Sq Foot 1021 Elm Street $1,800,000 1,800 $1,000 1311 Geneva Avenue $1,260,000 1,320 $955 2096 Birch Avenue $1,375,000 1,627 $845 124 Chestnut Street $1,465,000 1,787 $820 148 Chestnut Street $1,301,000 1,626 $800

To put these numbers in perspective, the average price per square foot for homes sold in Palo Alto in the first quarter of 2013 was $1,085.  Menlo Park checked in at $794.  (To be fair, homes are generally larger in both of these cities, so one would expect the average $/sq foot to be a little lower.) But clearly, the latest surge in home prices have thrust San Carlos into the same ballpark as what some people are paying in their better-known brethren just to the south.   And this is making life diffcult on buyers who were already stretching to get a home in this city.

Clearly, there are many differences between the two cities.   But in this hotly contested housing market where well-heeled buyers want the best of everything, the lines that divide the two communities is becoming much more blurred.

(Chuck Gillooley is a San Carlos resident, Realtor, and author of the White Oaks Blog.)