Archive for the ‘buyers market’ Category

Let the Game of Chicken Begin!

 

We’ve seen more inventory since the fall selling season began than we have in several years in the city, with the excellent properties still moving at a record pace, and the just decent properties taking longer to sell.

What happens now to the fully respectable but possibly not excellent properties is a game of who will blink first– the buyers or the sellers. Will the sellers reduce their price, pull it from the market and re-list in spring, just rent it as every seller who doesn’t have to sell threatens to do, or employ the new trick du jour of dramatically dropping the price in order to inspire hopefully a new round of multiple bids?

The latest trick du jour seems to be the most successful, thus most popular tactic used to move properties that previously sold in a 2 week period. A dramatic price reduction (often below what the seller will actually take) is the hook to get fence-sitting buyers off their wait and see morals and actually take a stab at writing an offer. Once that hardest part, putting pen to paper so to speak, is done it’s just a matter of counters back and forth before we see who is going to do the blinking. Sometimes it’s the seller, often times it’s the buyer, and many times that is determined by how many buyers are enticed off the fence.

As we move into the final months of the year, look for more price reductions, far fewer listings, and a lot of withdrawals of properties from the market. Those withdrawn may be re-listed in the new year, but just as likely could be lost to the vast rental pool and disappear for a year or so.

I still maintain this is an excellent time to shop for a property, with the buyers bold enough to actually write an offer (below asking if the property warrants it) being the most successful. Come the new year, it remains to be seen if the steady drum roll of property appreciation will continue, but if history serves then spring will likely see a new round of price valuations hitting new highs.

 

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Meredith Martin is a Broker Associate at Paragon Real Estate Group and can be reached at Meredith@OpeningDoors.me

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San Francisco Market Overview: October 2015

 

As we begin the last quarter of the year, change is in the air!

First, a surge of new listings hit the market last month — there’s more inventory in San Francisco now than there’s been at any time this year. Just over 40% of those properties for sale are priced under $1M (on par with Zillow’s recent valuation of homes across the city — see how your neighborhood stacks up). Certainly buyer demand is persisting, however competition for any given property is generally letting up… for now. The consensus among forecasters is that prices in the Bay Area will rise through 2016 with regional employment playing a critical role.

Second, there seems to be a shift in buyer demand as higher priced homes linger and take price reductions while relatively more affordable ones attract interest. The median sales price of properties in SF fell slightly last month to $1,150,000 and the number sold is down dramatically year-over-year. To further this point, the generally less expensive East Bay, for example, is experiencing an increase in number of sales from last year, and median prices in some cities — like Berkeley — continue to climb. [Those in SF’s ultra-high-end market still have plenty to choose from including these 3 Most Expensive.]

From now thru the end of the year — before the Spring 2016 selling season begins — should prove an opportune time for prospective buyers to make a move, and it may well be the best time to borrow money in recorded history.




 

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Meredith Martin is a Broker Associate at Paragon Real Estate Group and can be reached at Meredith@OpeningDoors.me

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Prices Over the Years: Appreciation & Depreciation in Selected San Francisco Neighborhoods

2 Bedroom Condominiums*

Click on the graph


* Sales of condos up to a sales price of $2,000,000. New-development condo sales unreported to MLS are not included.
** With so few sales in these areas during this period, the median price is not statistically meaningful.
*** South Beach and SOMA have been particularly impacted by the large inventory of new-development condos on the market at this time.

Average 2-bedroom condo sizes vary by neighborhood. For example, in 2007, Marina 2-bedroom condos averaged 1430 square feet; in Pacific Heights, they averaged 1398 square feet; in Russian Hill 1347 square feet; in Noe & Eureka Valleys 1267 square feet; and in South Beach 1254 square feet.

The Median Sales Price is that price at which half the properties sold for more and half for less. It may be affected by “unusual” events in any particular period or by changes in buying trends, such as a market shift to lower-end home sales (such as is happening today). Some neighborhoods have a much greater quantity of sales or may be impacted by large new-development sales. The data herein is from the San Francisco Multiple Listing Service and subject to errors, omissions or revisions and not warranted.

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SF is finally 'officially' a Buyer's Market

Despite month’s of negative news regarding real estate, San Francisco has proven amazingly resilient to price decreases (southern neighborhoods such as South of Market not withstanding) that is, until quite recently.

Below is an analysis of Inventory Supply in San Francisco, compiled by Patrick Carlisle , showing a sharp change occurring in the market since September. The changes are particularly dramatic in several neighborhoods that have been very strong sellers’ markets heretofore.

By nature, these analyses are snapshots, which can sometimes change dramatically from month to month. Months-Supply-of-Inventory (MSI) & Days-on-Market (DOM) Analysis
Opinions vary but roughly speaking 4-6 months supply of inventory is considered a “balanced” market between buyers and sellers; less than 4 months is considered a sellers’ market; and more than 6 months is considered a buyers’ market.

By these definitions, for the first time in years, the home market in probably most of San Francisco’s neighborhoods can now be considered a buyers’ market – a time when buyers can usually secure substantially better deals than in the past. Good agents should be particularly aggressive on their buyers’ behalves, and ensure that their sellers understand the change in market dynamics. Important footnotes below chart…

To view a map of individual neighborhoods broken down by district numbers go here…

IMPORTANT: As this analysis was done on 12/1/08 regarding November 08 activity, the Months-Supply-of-Inventory figure is probably skewed somewhat higher than it should be since a number of offers accepted – probably a relatively small number considering the amount of activity during a typical Thanksgiving week – occurring in November may not have yet been reported to MLS. An extreme example of this is District 7 houses: since only 2 reportedly went into contract in November, if 2 more offer acceptances occurred in November but have not yet been reported, the MSI would decline from 20 months to 10 months – still very high by historical standards. District 5 only reported 8 houses under contract out of 112 available as of 11/30/08. A few more unreported offer acceptances would reduce that MSI from 14 months to 8 – 10 months (still very high by historical standards).

The only districts showing a decline in MSI year to year are Districts 3 & 10 – where sales activity has picked up markedly in recent months, probably due to foreclosure sales (and rapid declines in median sales price). Many other districts saw a doubling, tripling, quadrupling or more of MSI comparing 11/08 to 11/07.

Note the very high average-Days-on-Market (DOM) figure for “For Sale” homes. Average DOM has increased significantly for both sold and under contract homes (sometimes doubling year over year), but the “For Sale” DOM increase is particularly dramatic. Many properties are sitting on the market for much longer periods of time. Subsequently, the number of price reductions has soared as well. AVERAGE DAYS ON MARKET (DOM) is defined as: The average number of days it took all of the properties that went under contract during the period to accept a first position offer. MONTH’S SUPPLY OF INVENTORY (MSI) is a measure of how long it would take, in months, to sell the existing inventory at the current sales rate for the specific neighborhood and property type. MSI is defined as: The number of active properties on the market for one day or more during the month, less the number of properties that have been withdrawn or expired, divided by the number of properties that have gone under contract during the month.

All data is derived from Agent Metrics, may contain errors and omissions and is not guaranteed.

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