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Matt Ciganek

The San Francisco Property Report

Direct: 415.240.9901
License: 01871937

Barbagelata Real Estate

45 West Portal Avenue
San Francisco CA 94127

 SF Property Report- POST – Election / Mid – Holiday Update!

 

Hoping everyone had a wonderful Thanksgiving holiday. Each year we head into this season with an understanding that there will obviously be less time for selling and buying real estate. Anyone who’s read my posts or heard me talk about the holiday market knows that I always find a client or two a deal at this time of year due to a lack of buyers due to holiday obligations and sellers looking to move property despite that fact. Those are usually the way things shake out. This year? I think that, despite the election results, that will be the case again. 

Long term thoughts… I think that I’ll reserve specific long term thoughts on the national economy for the new year. We’ve all seen that interest rates have ticked up around a ¼ to ½ a point so far. I don’t think there’s much more room to run there. Too many other developed countries with significantly lower rates and far too many mortgages in areas of the US with lower average incomes that won’t be able to handle an increase after adjusting rates. That’s why they’ve stayed low for so long and why they’ll remain fairly low in the coming year. That much I’m predicting. The budget and taxes for ‘17 are already done. 2018 is the bigger mystery which will unfold as the new administration takes office.

Things I am keeping in mind: 1) The fact that the San Francisco Bay Area continues to develop as the heart of the technological world. The move from Silicon Valley to San Francisco for many startups and established technology giants has been substantial. That’s an engine for growth that may have ups and downs but will sustain demand for housing at significantly higher levels than were ever seen prior to that change in mindset. 2) Proximity to urban centers will continue to become more of a priority for the foreseeable future. How California, the Bay Area and San Francisco will be affected by this priority and other unforeseen economic and social changes will be interesting to watch in the coming year. 3) Where do you want to live? That is always an important question. I’m betting the Bay Area is going to continue be a popular answer for a long time for both those who’ve grown up here and for people seeking to relocate to an exciting, thriving economic and cultural center.

 

 

 

 

 

 

Previous Post:

 

Ok-Short post. As predicted, the Presidential Election (WOW) has had an impact on the market. For whatever reason, there was little anticipation by market professionals that this would transpire but I did include an expected impact in my last two posts earlier this year. I’m not at all surprised by the lower levels of activity. The market, in a nutshell, is still strong but with all that’s going on and the election absolutely dominating the news in a way that’s fairly hard to comprehend, activity is diminished. I am going to go out on a limb and predict a fairly strong end of the year market when it’s normally more quiet. There are a lot of great properties out there that aren’t getting the attention they should and the statistics, aside from the election, don’t point to any particular reason for that. I believe sellers who hold on longer than normal will be rewarded and buyers should try to take advantage of this fluctuation and buy property if they feel it’s right for them. It probably won’t be available once things settle down. It’s a challenge to buy when you’re not sure of the direction of the market but that’s why people who bought in a down market during the recession are sitting on a great deal of equity right now. Always easier to buy when it’s popular to do so. I hope to update this a couple of weeks after the election and comment on the tone moving forward at that time. Thanks and Happy Halloween! -Matt

 

 

 

Prior Post: Welcome to the SF Property Report. Happy 4th of July! It’s traditionally a slower time in real estate in San Francisco and that seems to be so in some areas but not in others! Working in Bernal Heights this week, 113 Newman, a quirky but appealing cottage of (maybe) 1000 square feet had 13 offers. Quick close coming, per the listing agent which means cash most likely? Condominiums in the Inner Sunset that are brand new (empty lot purchase in’13, now four luxury units. 715-717 Kirkham) received multiple offers this week as well.

Not much out there but there’s lots of buyers. With rates going down and supply not going up with the exception of new development in the eastern portion of the city, don’t expect the price drop people are talking about. Too many folks waiting and ready to buy which means that it’s going to be flat to positive unless there’s a major correction in my opinion. (Did someone say Presidential Election???) 

I expect to see price reductions on homes listed for more than 1.5M and the same for condominiums but I’d blame the pricing of the property more than the market. Perhaps the higher priced properties take more than two weeks to get offers (So?) but it’s still a very strong market.

I’m listing www.35DeSoto.com right in that middle range of higher quality but smaller properties and receiving good levels of interest despite the holiday season. I’ll follow up with how the activity went after the Friday July 8th Offer date. H

Have a great summer!-Matt

 

 

 

 

 

Previous Post: This a modified mid-spring update as the market has begun to move again in some areas and others, not as much but it’s still quite strong overall. 

We’re seeing that condominiums, particularly in areas with more single family homes, have taken longer to sell. The most value a buyer can find is in a condominium that needs updating. Beatiful, spacious and remodeled condominiums continue to do well, often receiving multiple offers. In between the two, there are some that take longer to sell and possibly require price adjustments but they do sell. Another significant factor is the pipeline of new condominiums selling with more on the way. Where people who would like to see the market go down are getting confused is that these properties are selling. They’re just taking a bit longer. There’s been no significant move downwards. Just a steady supply and an unsteady stock market and Presidential race. Condominium prices remain firm.

Single family homes below $2,000,000 are seeing the greatest increase in demand. In all districts of San Francisco, single family homes sell within weeks of their list date. Value can sometimes be found by making offers on tenant occupied property as most buyers want move-in ready homes. “Cosmetic” fixers aren’t showing much value as the cost of updating often exceeds the difference between their price and that of a similar remodeled home. 

Above $2,000,000 there was talk, and some say it’s still out there, that the high end of the market is weaker. I disagree. Statistically, 17 days on market is the average in Districts 5, 6, 7 which comprise most of the center and nothern ends of the city where these homes are found. That’s not a long time. That’s for an average home price of $3,666,000 and covers 42 sales that closed since mid - February. (I did take out two sales that were outliers and on the market for 6 months due to unusual circumstances. I don’t feel they contribute significantly to an argument for or against the current market climate) It seems reasonable to me that the average buyer wants to take more than 17 days to purchase a home that clearly has more going on than a home in the entry level price range.

Coincidentally, in those same districts where there are fewer “entry-level” homes, the number of sales that closed escrow is 20 with only one taking 60 days because it fell out of contract before going right back into contract. The average days on market was 25, so go figure! Average sale price of homes closing under $2,000,000 was $1,519,000. Average for all homes in districts 5,6 and 7 was $3,130,000. 

Let’s see where this goes and I’ll try to update as we head into the post Memorial Day to 4th of July summer slowdown. (Guaranteed) -Matt

 

Former post:

The local economic forecast remains quite strong. Influence by international economic difficulties has been thus far muted by the strength of the local tech boom. Unofficially, growth in the Valley in '15 was about 5-7%. This year is expected to be about 5% as well. As long as the Technology industry is growing locally, rents will stay at or near current levels and sales prices will be be maintained, if not increasing.  Influence by increasing interest rates has not changed and with the volatility of the stock market and the upcoming presidential election, not much movement is anticipated. Rates are lower right now than the were after the Fed raised rates earlier in the year. 

In short, it's easy to sell your home if you're relocating but challenging to move up to a larger home without enough cash reserves that enable you to buy and then sell. Bridge loans are possible and can be a way to get the home you've been looking for without having to sell and then rent while finding the right new home.  

If you're buying, there are opportunities, but you do need the help of an experienced agent. Value is not easy to come by but it's out there and I have testimonials to back that up. (Contact me if you'd like details on that!)

 Thank you! Matt 

 

The market is seeing strong and growing levels of activity as inventory has come on the market but in less supply than anticipated. People just aren't selling. They are, however, buying. Market entry homes and condominiums are seeing the highest levels of activity. Desirable homes of all types in great locations are selling very well. The high end of the market, with the exception of the aforementioned best of the best, is slower but is moving along. Marketing for these sales should be prepared accordingly. Contact me if you'd like details on that. 

The local economic forecast remains quite strong. Influence by international economic difficulties has been thus far muted by the strength of the local tech boom. Unofficially, growth in the Valley in '15 was about 5-7%. This year is expected to be about 5% as well. As long as the Technology industry is growing locally, rents will stay at or near current levels and sales prices will be be maintained, if not increasing.  Influence by increasing interest rates has not changed and with the volatility of the stock market and the upcoming presidential election, not much movement is anticipated. Rates are lower right now than the were after the Fed raised rates earlier in the year. 

In short, it's easy to sell your home if you're relocating but challenging to move up to a larger home without enough cash reserves that enable you to buy and then sell. Bridge loans are possible and can be a way to get the home you've been looking for without having to sell and then rent while finding the right new home.  

If you're buying, there are opportunities, but you do need the help of an experienced agent. Value is not easy to come by but it's out there and I have testimonials to back that up. (Contact me if you'd like details on that!)

 Thank you! Matt 

 

 

 

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