Contrary to popular belief, the holiday season is an excellent time to be a home buyer whether you are a first time buyer looking for a SoMa loft or Mission TIC or a homeowner looking to trade up out of their starter condo and into a Bernal Heights or Noe Valley single family home for sale.

Why the holidays are a great time to shop for a home and why you’re going to start your house hunt now and NOT wait until tax time next year:

1. You’ll get a better deal on your home.

   • The average consumer thinks there is some sort of seasonal holiday shut-down in the real estate market but you are not the average home buyer. In reality, we do not have a harsh winter here in SF (at least not during the actual winter months). The real estate market hums with buyers buying and sellers selling all year long in the Bay Area. Yes, our busiest SF real estate markets are during the Autumn and Spring but as a home buyer, busy means competition and competition means higher prices. If you are a San Francisco home buyer, busy is not always better.

2. You’ll deal with serious sellers.

   1. In today’s real estate market, there are plenty of non-serious sellers. They don’t have a real motivation to sell so they’re happy to “test the market,” price like it’s 2006, close their eyes, run their Realtor ragged, and hope for the best.  These are not the sellers a serious buyer wishes to encounter.
      1. But the typical holiday season Seller is motivated. Sellers are either serious or exhausted if their home is on the market during the Winter. Serious sellers mean realistic list prices and motivation to negotiate with serious & qualified (preapproved) buyers.
      2. Generally, I see 2 types of San Francisco listings for sale during the holidays (which is roughly November to January). *
         1. The Exhausted Seller, i.e. the leftover inventory of homes for sale from the Fall market
         2. The Motivated Seller, i.e. the seller who has a true motivation to sell.
            • The source of their motivation can be varied — a tax benefit if the escrow closes before the end of the year, or,  a new baby on the way which means more room is needed quickly, or,  relocating out of San Francisco to start a new job in January.  Motivation means the home is priced realistically and the seller is willing to entertain serious offers from preapproved home buyers.

If you’re thinking of buying your first home in San Francisco in 2011 but you’re financially ready now, consider starting the home search now. If you find the right home for you during the holidays, you’re certain to benefit.

Quick sample of current SF real estate inventory for sale:

• 49 single family homes for sale in Bernal Heights.
• 18 Noe Valley house listings for sale & 18 condo listings in Noe Valley
• 59 condo and loft condo listings in SoMa South of Market
• 9 Hayes Valley condos
• Get a neighborhood specific real estate market report for any San Francisco ‘hood.

* Worried about a lack of inventory?

For the reasons above, you will notice more inventory (and competition) during the Spring BUT most of these home sellers already know that they are going to sell next year and are preparing. For example, I’m currently working with multiple Noe Valley home owners who plan to list and sell their home in 2011.

As a home buyer, if your buyers agent works with a large Broker, like I do with Zephyr Real Estate,  and is a member of the San Francisco Top Agent Network, as I am, you’ll have access to most of the listings that are coming soon in the new year.

Why? Because we take them on as a “pocket listing” (not on the public MLS) during the holidays and show them by appointment to serious home buyers. My home buyer clients are able to access this underground inventory of pocket listings throughout all price ranges, property types and neighborhoods.

Typically, the winter & holiday season is a slower time for real estate. Of course, this depends on your local housing market and frankly, in large part, due to weather. Our local San Francisco real estate market (and temperate climate) isn’t usually as affected as, say, the Minnesota market but you’ll still see some seasonal drop-off.

Will this year be different?

As the Wall St. Journal reports, some experts argue that this year may be different because of the extended Home Buyer Tax Credit.

The credit caps your qualifying purchase to $800,000 or less so not all of San Francisco housing will be affected. Of course, for many home buyers, the current low interest rates are a major draw at any price point. We don’t know when they’ll go up but we do know that it is inevitable.

“House hunting usually slows down this time of year, as people put their searches on hold during the holidays.

This winter could be different, however, thanks to the extension — and expansion — of the first-time home-buyer tax credit.

“We’re going to see far more interest in the fourth quarter than we generally do because of the tax credit,” says Heather Fernandez, vice president of Trulia.com, a real-estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she says…”

“Interest rates are low right now, but will likely rise next year, Ms. Warren says. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying.

“It’s pretty universally accepted that rates will be higher next year,” she says. “What is unknown is how fast and by how much.”

Average rates on 30-year fixed-rate mortgages have been hovering around 5%. But when the Federal Reserve stops buying large amounts of mortgage-backed securities next year, interest rates could rise, Ms. Warren points out. The Fed plans to end its purchase program in March.”

Personally, I always recommend on this SF real estate blog that you make your real estate decisions based on your own life and not what the so-called experts say.

If it makes sense for you to buy a home now, go for it. Take advantage of the relatively lower home prices, the low interest rates, and maybe even the tax credit.

The same goes for those of you considering selling your home. If it makes sense in the overall picture of your life, what are you waiting for? It may be a long time before prices are back at the steroid-enhanced levels of 2005/2006.