Quite often I’m forced to pull from our readers’ comments because I couldn’t possibly say it better myself. This from yesterday’s post titled “Rents Rising.
“I don’t think this [observation] makes sense in San Francisco. From where I’m standing as a potential buyer – the San Francisco market is on freaking fire. We’ve been overbidding and losing on houses for the last year. In the year we’ve been seriously looking, we’ve gone from being able to barely afford what we want, to being priced out. Rents aren’t rising because people don’t want to buy – I think in San Francisco rents are rising because people can’t buy. We rent a lovely stand alone house that if marketed for sale would be called a [3 bed, 1.5 bath] on a great block. If we wanted to own it with a traditional mortgage – with 20% down we would increase our monthly payment by about 3X. We just can’t make that make sense.”
Shawna, you are not alone and this is what we’re trying to make crystal clear to the readers out there. There are many pockets and micro-markets in this city. If one is booming, another might be lagging and “national” reports just don’t capture that.
Shanendoah deals with large multi-unit buildings, and rents are in fact rising in many of them, as is demand for those sized properties, and many of those renters are indeed waiting to buy. But in your world, the market shows zero signs of slowing, and unfortunately you are not alone. In fact, this is the case in most of San Francisco, but we’re forced to read countless reports about doom and gloom that eventually will trick everyone into thinking the market on your street has tanked too, even though it has not.
Rising interest rates are a different story as that means people will not only be out-bid, but no longer able to afford the homes they were previously bidding on, and essentially dropped into a lower competitive price bracket…and that is serious. The point being, the competition is still out there and it is still fierce.
Your comment is one of the most accurate assessments as to the state of the market I have heard in a long time.
Thank you! I owe you coffee, at least.