Danielle Lazier
Archive for the 'Economic News & Market Updates' Category
The Economist says the worst of America’s real estate downturn is over and you’ve been thinking of selling your San Francisco home, what to do now?
January 2nd’s The Economist notes,
“House prices are still far above their fair value in many countries – though no longer in America.”
Of course, the article does warn that “a further downward leg is possible since past housing busts have pushed priced below their fair value…” but those of us in the San Francisco real estate market have seen time and again that SF is the last to go down and the first to go up (or, at least, amongst the last and first.)
So what if you own a home in, say, Bernal Heights or Mission Dolores and you’ve been thinking of selling your home for a little while now?
You’ve been waiting for some signs of market stabilization but are growing anxious because you really could use some more space. Or, perhaps, you want to move out of San Francisco to new pastures. Well, most agree that the worst is probably over yet no one I’ve heard of expects home prices to appreciate anytime soon. If you’re waiting for your value to go back to where it was in 2005, you may be waiting a long time.
The truth is that no one rings a bell when the downturn is over. We must look for subtle clues and take a leap of faith. Complex real estate markets like ours today offer superb opportunities for those wanting to sell their current home and buy another one. It’s “against the herd” thinking but it’s tried and true.
For example, say home prices are down 20% off the peak in Bernal Heights or another SF neighborhood.
If you’re home was worth $900,000 at the peak of the market, it’s now worth $720,000. This is a loss of $180,000 BUT the home you want to buy in Noe Valley was worth $1,400,000 at the peak. This same house is now worth $1,120,000 which is a decline of $280,000.
Essentially, if you sell your home and upgrade in a down market, you’ll SAVE money. In this example, it is $100,000 in savings. Plus, you’ll be leveraging yourself into a nicer home that has more potential to appreciate in the future. Add in today’s interest rates and the improved quality of life you’ll have for your family and this starts to look pretty good, right? (It goes without saying that this scenario will not work for everyone. You’ll need to have stable employment and equity to qualify for the home purchase.)
If you want to move out of San Francisco, you’ll probably be in even better shape. The San Francisco market has declined much less than most of the country. Last year, I helped clients sell their Bernal Heights listing and relocate to Merced where the market has declined much more than here in the Bay Area. When you look at both sides of the transaction, they did very well.
Alright, enough already. I do want to sell my San Francisco house in Bernal Heights or Mission Dolores or maybe even Inner Sunset this year and buy a new one in another neighborhood. If I want to sell a home and buy another one, what should I do now to prepare?
Glad you asked! You should read this post about the time line of buying and selling a home.
Follow SF Real Estate? Keep Your Eyes On the Valley. More VC Dollars Flow to Bay Area.
For a glint of positive news, look south. According to the Wall St. Journal, “Local (San Francisco Bay Area) Start-Ups Snagged a Bigger Slice of the Venture-Capital Pie in 2009.”
“But even as the overall amount of venture-capital money they pumped into companies declined from 2008, Bay Area start-ups got a bigger slice of the dollars that were deployed. According to research firm VentureSource, start-ups in the Silicon Valley region saw their percentage share grow over the first three quarters in 2009.”
“…venture capitalists say they paid even more attention to local start-ups last year because the recession weeded out weaker ideas elsewhere, while Silicon Valley’s longtime ecosystem of entrepreneurs and start-ups meant that new companies continued to launch.”
San Francisco Bay Area Google Bus
Who knows when we’ll see the next Google but rest-assured that those big, shiny, black buses are good for real estate. Where the luxury Google bus travels (or Apple or Genentech or…), so goes the increasing value of your Noe Valley Victorian listing, Mission loft, Bernal Heights home, or Mission Dolores condo!
San Francisco Real Estate Market Is More Resilient. Here’s Why. And SF Market Update.
At the beginning of each new client consultation, I ask the prospective San Francisco home buyer or seller what they believe is going on in the local real estate market, whether they are thinking of a Bernal Heights single family home or a Mission Dolores condominium.
Over the past 6 months, I have noticed a real shift in mentality. This is far from scientific research and more anecdotal, but it does seem like the public mood has improved. More buyers tell me that they feel we have already seen the bottom and that prices in San Francisco are starting to head back up, if only slowly. Read the rest of this entry »
HVCC Current Appraisal Rules: The Law of Unintended Consequences for SF Home Sales
The Law of Unintended Consequence: When an action leads to results that were unanticipated or unintended; can be positive or negative
The current home appraisal rules (HVAC) have had a myriad of unintended consequences. The intent of the guidelines was laudable: to help make the home valuation process more objective. The idea being that shady appraisers, Realtors, mortgage brokers, buyers and sellers helped create the over-inflated housing mess. I have a couple of issues with this approach. 1. We’re not all shady. 2. As with many bureaucratic pursuits, the intended goals are “lost in translation” as the rules fail to take into account how things actually work in local markets & in practice.
The unintended consequence of the new appraisal rules has been kind of the opposite of what the rules were trying to avoid. Instead of plumping up home prices, they are pushing them down. Read the rest of this entry »
November 2009 Market Report: San Francisco Single Family Home Sales Increase in Number and Sales Price
As a San Francisco Realtor, I maintain access to Clean Offer, a client portal for easy, accurate MLS searches. Each month, they publish a pretty good Market Report on the state of both the local San Francisco housing market as well as Mortgage Interest Rates and other issues relevant to SF Home Buyers and Sellers.
Highlights from the November 2009 Market Report:
- # of home sales increased from last month
- median home sales price also increased
- pending home sales increase for 8th month in a row (signaling a continuation of increased home sales in the coming months and a recovery in the local real estate market)
Detail-oriented, are ya? Get the full skinny (as oxymoronic as that sounds), here: November 2009 SF Market Report
What goes down must come up. Then down again. Then up even more. SF real estate is rebounding.
Sometimes, it is nice to be included. Yahoo Real Estate posted an article: 10 Cities Experiencing Home Price Rebounds, and San Francisco real estate is #2 on the list!
Personally, I think these indexes are a little misleading whether they’re used to support the bulls or the bears but nonetheless, I’ll take the good news where I can get it. Just remember that real estate is VERY local. If you really want to know what your home is worth (or what the home you want is worth), you need to talk to a local Realtor and get the facts.
Here’s what they have to say about us:
2. San Francisco, CA.
San Francisco home prices increased 2.8% from July to August this year. Home prices there will drop 8.3% by next June, but will increase 14.3% by 2011. After the area works though its supply of foreclosures, it will be prepared to recover, according to First American Core Logic.
For neighborhood info, fill out the neighborhood report request on our right sidebar. For current MLS listings, check out Clean Offer.
Federal Home Buyer Tax Credit Extended and Improved! Will More SF Buyers Qualify?
The Federal Home Buyer Tax Credit has been extended and improved. This may mean that more San Francisco home buyers will qualify which is good news for both buyers and sellers.
Many clients have asked me what sort of impact the tax credit has had on our local SF real estate market. Given the income caps, I would have to say not too much of one. But now, this should be improved a little… I stress, a little, because the limitations continue to make the tax credit irrelevant for a large part of our market. For example, the limitation on the cost of a home is $800,000.
What are the major changes?
- The timeline has been extended. You must go into contract on your home purchase before April 30, 2010 and close escrow by July 1, 2010.
- Current homeowners now qualify. This is to help assist the “move-up” market. My readers know how great a time I believe it is to “trade-up” from your starter home into something more long-term (assuming you have relative job security and equity). (”Move-up” home buyers must have used their property as their “principal residence” for 5 out of the past 8 years.)
- Income brackets to qualify have increased. Now, up to $125,000 for a single person and $225,000 for a married couple.
- Purchase price limited to $800,000 or less.
For a complete 2009-NAR-Issue-Brief-Homebuyer-Tax-Credit-Changes-1104-1107.
West Portal and Forest Hill Single-Family Home Listing and Sold in San Francisco
Here is this week’s report on single-family listing and sold properties in West Portal and Forest Hill in San Francisco, CA.
- Number of listings: 7
- Average list price: $1,384,909
- Average days on market: 55
- Number of sold: 3
- Average sold price: $1,321,000
Any changes from the last report. Take a look.
Want to know how much your property is worth? Send us a request.
And make sure to check back here for updated report bi-weekly.
How do you know it’s the right time to buy a home?
For San Francisco home buyers, how do you know it’s the right time to buy a home?
Real estate prices in San Francisco are down about 20% from the peak of the market (more or less depending on the neighborhood and type of property). We’ve been in the downturn for about 3 years already. There are genuine signs of life like increased transactions and the return of multiple offers. Read the rest of this entry »
Bernal Heights Real Estate Listings and Solds Within the Last Month and a Fiesta!
Here is this week’s update on new real estate listings and sold properties in Bernal Heights in San Francisco, CA.
- Number of Active Properties: 42
- Average List Price: $769,706
- Average Days on Market: 60
- Number of Sold Properties: 14
- Average Sold Price: $815,152
Remember the Bernal Heights Fiesta is this Sunday October 18th. This is always a great time to enjoy the neighborhood. Hope to see you there!
Want to know how much you Bernal Heights property is worth? Just send us a request.
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