by Meagan Levitan:
We can always say we live in a bubble here in San Francisco as we trend so differently than most other jurisdictions in almost everything imaginable — lifestyle, politics, attitudes and, yes, real estate. I recently saw just how real our bubble is.
I took a sobering trip to Southern California last week (why yes, I was visiting my in laws but that’s not why it was sobering). The number of ‘for sale’ signs in your average So Cal city located in Riverside County was nothing short of disheartening — disheartening for the countless number of people who find themselves in need of selling (by choice or not). And disheartening to see, firsthand, what has contributed to the state of the mortgage and real estate markets nationally. Even more sobering were the number of “Bank Repos” and “Foreclosure” signs on these homes for sale. It truly brings the headlines of the imploding mortgage market to a tangible level.
My experience here in the City of late is this: while there aren’t the number of foreclosures here compared to other parts of the state and nation, the mortgage market doom nevertheless has contributed to a general state of unease and worry about the future of real estate. I point to an increasing number of price reductions and deals falling out of escrow, or those just narrowly getting into escrow, because of financing concerns. Lenders may be nervous and buyers worry they’re stretching. Overall lenders still seem to like doing business in San Francisco. However for sellers, a financing contingency on an offer is a real hurdle to get over. In the past few years it was almost a formality that a buyer had to go to any lengths to get assurances their loan would come through. Cash is king for sellers. The more cash they see over financing, the more they lean to that offer.
The number of buyers continues to be plentiful but so does the number of said buyers who insist on staying on the sidelines — rather than buy — because they believe the market is going to change drastically.
For now, though, it’s the end of the year. Even though there are people looking to buy 365 days a year, it’s safe to say the next three to four weeks will be slow. New inventory will trickle in (though it can also be a terrific time to bring a property to market if there’s nothing else like it on the market at the time) and sellers are likely to try their best to get those listings that have sat on the market a few months into escrow. Deals to be had? Most definitely.
Merry Christmas and Happy Holidays to all. Have a great week…