Tag Archives: Selling My Home

Something For You Fence Sitters And Gold Panners To Ponder…

1761hayes

My clients just got shelled by 16 other offers on 1761 Hayes, a top floor 2 bed, 1 bath condo in NOPA asking $849,000. We offered $1,051,000, and they accepted an offer that was “barely higher”. So here’s a thought:

I’d say it’s time for many of you long time residents sitting on the selling fence to pack it up, cash out, and head for greener pastures where the $$$ you make on your sale can buy you acres of space, money in the bank, and plenty of breathing room. I’d even suggest all of you gold panner techies flocking to SF looking to strike it rich consider building another hub for tech activity somewhere else. Don’t get me wrong, I love all of you, many of you are my clients, we love what you’re doing for the economy (for that matter, the world), and there is a reason everyone wants to be in San Francisco, but at some point, I’d think even you, the innovators, would get tired of throwing your money at sellers and it still not being enough. Surely, the internet works in other locales around the world, and surely companies can be built and go viral from anywhere. Perhaps the companies that are leading the innovation now should open satellite offices in markets where their talent can afford to live? I know Oregon, Seattle, and Salt Lake City have a reasonable real estate market, as well as hip scene. Makes perfect sense to me, and might ease the frenzy that is San Francisco real estate. What do you think?

On a side note (somewhat related to technology): in case you aren’t on the VIP list, and you’re stuck waiting in line for your real estate agent to send you stale data via snail mail about recent sales in your ‘hood, comps that by the time they reach you are old news, I published yet another issue of sfnewsletter last week, and it’s chock full of good real estate porn, including a few good overbids you’ll want to share amongst friends, and a link to the stuff you really want: real time market data sortable by neighborhood and property type (courtesy of The Goods-SF).

Get on the list at sfnewsletter.com. Get out of town with money in the bank by giving me a shout (alexclark@gmail.com, 415-254-5351).

-1761 Hayes Property Detail [theGoods-sf.com]

“We Were On The Market For 1 Day Before Receiving 3 Offers (2 All Cash!)”

From my clients who just sold 1676 Hayes St.

My husband Jon and I wanted to take a minute to share our great experience working with Alex. He knows the SF market so well and was able to help us get staged and ready to sell very quickly. We were on the market for 1 day before receiving 3 offers (2 all cash!). All were well over asking and we closed 10 days later! We’d be very happy to work with Alex again and highly recommend him.- Elizabeth & Jon

Glad to be of service, and glad it turned out so well. Enjoy your skis!

Overheated Real Estate Market? Yes. Bubble? We’re Saying No…

Many adjectives are used to describe San Francisco, but normal isn’t a common one – and the same can be said about our real estate market. Even taking into account its tendency to be different in one way or another, this past spring’s market was overheated by virtually any definition. Surging consumer confidence and huge buyer demand chased a deeply inadequate supply of homes for sale, abetted by interest rates so low that loans – factoring in inflation and mortgage interest deduction – were almost like free money. All this led to an extreme seller’s market, a feeding frenzy and dramatic price appreciation.

But not, in our opinion, a bubble. The Economist, one of the first to sound the alarm for the last bubble, sees no sign of a U.S. housing bubble, basing its conclusion upon historical comparisons of home prices with rents and incomes. Also, it is not unusual for the market to go somewhat crazy following a 4-5 year down cycle after all the repressed demand bursts forth – this happened in 1996-1997 too. Besides which, we are only about 18 months into the current recovery. Though real estate is susceptible to sudden economic and political shocks, in past cycles, recoveries have typically lasted at least 6-8 years before peaking. That doesn’t mean there won’t be any short-term market adjustments, up or down, for one reason or another, along the way.

There are some signs of a normalizing market. After a year of declines, the number of new listings in the 2nd quarter was a little higher than the 2nd quarter of 2012. Though this inventory was quickly gobbled up and overall supply remains very low, it’s a good sign more sellers are entering the market. Median prices may be leveling off after spring’s big pop – it’s still too soon to be sure, but summer often sees a cooling down. It’s not welcome news to buyers, but interest rates have increased from extreme lows – though remaining very low by any historical scale. (See below: The Sky is Not Falling.) The distressed home segment, which distorts markets, is disappearing in the city and declining everywhere. And new-home construction continues to increase: even though we won’t see much of this new inventory until 2014 and later, it’s a very positive sign.

San Francisco Median Home Prices

For both houses and condos, the second quarter saw jumps well above previous peak values. Median sales prices are affected by other factors besides changes in value – seasonality, inventory, buyer profile, big changes in the distressed and luxury home segments – but the dramatic increases do reflect rapidly climbing home values in the city. Though all SF neighborhoods have been experiencing striking appreciation, this does not mean that all of them have now exceeded previous peak values.

Sales Over & Under List Price

This chart illustrates the enormous percentage of listings that sold for over – and sometimes far over – asking price. One in four houses sold for 20% or more above asking, which in San Francisco often equals hundreds of thousands of dollars.

San Francisco Luxury Home Sales

No market segment has been affected more dramatically by the recovery than luxury homes. In an inventory constrained environment, it has far out-performed the general market in unit sales – general unit sales were actually down, second quarter, year over year. Our new report also delineates the neighborhoods which dominate high-end house and condo sales: SF Luxury Home Report

Interest Rates: The Sky is Not Falling

Not to diminish legitimate concerns regarding rising mortgage rates and their effects on housing costs, but this graph puts recent increases in context. At any time 2011 and before, the current interest rates, even after their recent big percentage jump, would be reason for conga lines of celebration in the streets. Rates had to rise from their historic and artificial lows – how far and fast this may continue is unknown to us, but we don’t presently expect big shocks to the real estate market in the immediate future.

Very Few Price Reductions

89% of second quarter sales sold quickly without price reductions, at an average of 8% over list price – a clear indication of overheating. Still, not every listing sold without a price reduction and some didn’t sell at all, but ended up withdrawn from the market – in the last quarter, over 300 listings. (Many of these will eventually be re-listed, often at lower prices, and then sold.)

What Sells Where

What district of San Francisco has more house sales than any other? Which area has far more condo sales? You may be surprised at the answers.

Distressed Home Sales

The distressed home market in San Francisco is dwindling into insignificance. In most neighborhoods, the effect of these sales has disappeared altogether.

New Listings Coming on Market

The second quarter saw an increase in new listings not only against the first quarter of the year, which is normal, but against the second quarter of 2012. This is a hopeful sign if it continues.

Months Supply of Inventory (MSI)

Even with the increase in new listings in the second quarter, inventory remains drastically low by this measurement of demand versus supply.

Listings for Sale

Average Days on Market (DOM)

Time on market before acceptance of offer has also hit historic lows for virtually every property type in the city.

Percentage of Listings Accepting Offers

This is another clear statistic measuring demand against supply, and it is at historic highs.

All data from sources deemed reliable, but may contain errors and is subject to revision. Statistics are generalities and how they apply to any specific property is unknown. All numbers should be considered approximate.