Real Estate Boom 2015?
UPDATE San Francisco Real Estate Boom December 1, 2015:
The beginning of the year saw huge gains. Low inventory combined with very strong buyer demand saw homes selling with multiple offers and for considerably over the asking price. As an example, in the first 4 months of 2015 Mike and I sold 7 San Francisco properties all selling for a minimum of 20% over the asking price:
1535 33rd Ave Listed: $899,000 Sold: $1,300,000 45% Over
38 richland Ave Listed: $998,000 Sold: $1,300,000 30% Over
1930 Eddy #101 Listed: $599,000 Sold: $750,000 25% Over
270 Valencia #406 Listed: $679,000 Sold: $812,000 20% Over
370 church Street #F Listed: $699,000 Sold: $863,000 23% Over
309 A Castro Listed: $899,000 Sold: $1,100,000 22% Over
222 Diamond Listed: $899,000 Sold: $1,200,000 33% Over
By the summer things had cooled off a bit. This is not to say prices went down, but we began noticing more homes sitting on the market. I think there were a few reasons for this including buyer fatigue. Submitting offers on properties can be exhausting emotionally, and after a few brutal losses it is normal for buyers to wonder why they are subjecting themselves to the pain. Another reason for homes not selling, in my opinion, is some sellers, having watched the market intensify, began listing their homes at prices the market would not bear. When homes hit the market at prices that are too high it can make it seem like the market is softening when in reality there is a ceiling above which a home will not sell in any given neighborhood at any given time. On any given day a below average home is not going sell at an above average price.
As we head into December there are many very serious issues unfolding in the world that can’t help distract people from buying homes. I think there is also a feeling brewing that prices cannot continue to rise the way they have. There are items in the news that seem to substantiate this feeling as we begin reading articles explaining that the shine may be coming off the tech market, interest rates will eventually rise, war, refugees, the presidential election 2016 etc. On a more macro level, real estate cycles are typically eight years. The recession ended in 2009, so on a very base level there should be some kind of reckoning by 2017. Past performance is not an indicator of future performance. With strong job growth and the population rising in San Francisco, anything could happen.
Regardless, my feeling is the San Francisco real estate market in early 2016 will find many willing and able buyers. There is a feeling of rebirth after New Years when everything begins to seem possible again. I think this feeling along with year end bonuses, and tax time on the horizon will make many consider 2016 the year to buy and sell a home.
UPDATE San Francisco Real Estate Boom November 18, 2014:
The market continues to climb amidst lots of development across San Francisco. Housing inventory continues to be a problem with very little coming on the market in comparison to demand. There was a lot of talk about the market slowing down in August but I think any slowing that did exist was seasonal as buyers and sellers headed out of the city for vacation. With Thanksgiving around the corner we can expect the real estate market in San Francisco to hibernate a bit. That said I will be bringing a condominium onto the market in Eureka Valley in December; some years listings sell very well with very little competition.
UPDATE San Francisco Real Estate Boom January 9, 2014:
I posted this originally in October 2012 wondering if the turn from recession in the market was the start of a real estate boom. The Whole Foods Market on Market Street is open for business and many of the buildings that were being developed in 2010 are now complete and sold. It takes a long time to get permission to build in San Francisco, and the development being completed now were in the works long before the real estate market became so heated. Even with everything being built right now, I think most people are realizing it isn’t going to be enough to cope with demand. Rents are rocketing as are home prices, the real estate boom is on.
Check out this post talking about expected San Francisco population growth.
If anything it didn’t take till 2015 to experience the real estate boom. It is happening now!
The Following is the Original Post:
The housing market has been showing several signs of recovery, including home prices and home sales on the rise, new construction up, foreclosures falling, and mortgage rates near record lows. Some economists are getting very bullish about the housing recovery and even predicting that the market will return to its “boom” level days in just three years.
It is true, in San Francisco we have seen some amazing changes happening in the city; just take a look at all the cranes that have shot up around town! On Market Street alone from Sanchez to Duboce there are three large sites including a brand new Whole Foods Market being built at the corner of Market Street and Dolores Street. The downturn was steep and painful even in San Francisco, so it will be interesting to see if indeed the hard times are behind us.
What are you seeing around San Francisco that makes you think the market is picking up? will the real estate boom continue through 2015?