The Anti-Facebook Effect

San Francisco is all abuzz about the Facebook Effect, and how it’s fueling our real estate market. It’s a good thought indeed, but also important to note that for as many articles published about it, it is, in fact, just opinion and a lot of hype. I, for one, am thankful to see another type of article posted today (I’ll call it the anti-Facebook effect), and I thought you all should read it too.

Some talking points:

People, mostly real estate agents and sideliners, are saying that the San Francisco real estate buyer mindset is that they “better get in before they’re priced out.” I do think this is a discussion point to get buyers to jump pushing days on the market (DOM) down and keeping competition fierce, yet what is fueling the market is cash and inventory


The new techies are putting money in the market yet as renters, not buyers. They are not seeing real estate as a day trade and are waiting to purchase until they can get what they really want. Even though amazing three and five year arms are available, most buyers are opting for 30 year fixed loans. Twitter and Airbnb employees do not have the low or no down payment options that were available during the last boom and unless they have family money or cash from the last start-up; they are still in the very expensive rental market.

“The Facebook Effect”, as Julian Hebron of the Basis Point calls it, is a justification, yet not likely a true driver, of a seller holding strategy. Most owners sitting on the sidelines who might want to sell are holding specifically due to their financial circumstance. “The Facebook Effect” is a nice way to predict a positive future where they may get their money back and perhaps a slight gain. People who are looking to trade property in the Bay Area are going to be impacted on both sides of the deal, whether it be buying or selling.

Facebook Effect [theFrontSteps]
Anti-Facebook Effect (“Cash, Not Facebook, Is Fueling The San Francisco Real Estate Market”) [Real Estate Trading Game]

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