San Francisco Residential Real Estate Market Summary-March 20, 2012
We’re now well into a situation where sellers, while not in complete control, are definitely in the driver’s seat. There are still lending issues and properties with tenants or condition issues continue to have some difficulty finding the right buyers. A staged house in “move-in” condition is still getting much higher levels of interest.
The biggest challenge for buyers right now, and greatly benefiting properties on the margins, is the lack of inventory. Even with a few flaws, if it’s a clean property and staged, it’ll most likely sell for more than it would have last year and much more quickly. There’s not much to choose from and a lot of folks trying to do the choosing.
The market is beginning to understand what’s happening and it’s causing more buyers to pull back and reconsider their home-buying strategy. This may have a dampening effect, but most likely only a temporary one and on marginal properties only. The IPO driven tech and biotech surge, (see here) which really seems to be the largest component of the current market bounce will not be going away anytime soon and seems likely to last through 2012 at least. With those businesses, longer term predictions are speculative at best, in my opinion.
The fact of the matter is that the rest of the country is still working out foreclosure and short sale issues while this bounce removes many of those here in SF. That could help to increase inventory as those who may have been short can now sell somewhere closer to cost or better. At some point in the not too distant future, San Francisco could be considered less attractive than nearby communities with large inventory and significantly lower prices. Just not yet. Buyers definitely still feel like SF is the place to be.