March Market Update

Greetings Clients and Friends! Happy March! We’re at the beginning of the end of the first quarter in 2019! 

The real estate market is still a little wonky. Some neighborhoods / areas are super hot and while others are a little stale. You really just have to be in it to know what to expect from wherever you are buying or selling. For example: In San Mateo County, properties are still selling and for good prices. Offers / sale prices are averaging between 95 – 105% of the list price, but they are taking a little longer to sell in some areas / price ranges. Average days on market is 30 days before properties get into contract. This market is much more palatable than the double digit overbids we’ve been seeing the past few years, so it’s a great time to be a buyer! 

 
As for the City of San Francisco, that’s another wonky market! I am seeing HUGE price reductions for condos and high-end properties, but there are brand new buildings sprouting left and right commanding sky high prices and those are selling! The newly minted “East Cut” neighborhood of San Francisco has several new high rises all priced above $1400 a square foot with no views and they are getting into contract while the some of the older developments in amazing locations (Lumina, 75 Folsom) sit and wait for over 100 days. Single-family homes in the City are in high demand as usual. In the month of February, there were 131 sales in San Francisco and they sold for an average of 108% of the asking price.
 
Outside of SF, basically any area with top rated schools all over the Bay Area and priced under $2M are still highly desirable and sell fairly quickly. When I say top rated, I mean those with an API of 10. 

Some parts of Alameda County still haven’t caught up to the transparent pricing type of marketplace. Some listings in Berkeley and Piedmont continue to grossly underprice their listings to get a buzz going. For example, we submitted an offer for a property in Berkeley listed at $1,495,000 and got counter offered at $1,750,000. Seriously? Yesterday, we countered back at $1,580,000 CASH and are pin ponging back and forth at the moment. People are taking their time to get into contract.

This month we sold two of our listings to cash buyers and several of our buyers got into contract for the asking price or below. We even have a couple offers accepted contingent upon the buyer selling their home! 

Thankfully the market is settling down, but I can honestly feel it gearing up for another kick-start in the spring. My lender friends have told me that they have been taking more loan applications than ever before, but the “close rates” are really low for their new applicants. That just means that many people are interested in buying property, but are slow to pull the trigger. There will be more competition out there after taxes are filed for sure! Open houses have been busy, but we are only getting 2-3 offers on homes with dozens coming to open houses.

 
Rates have gone down again which is helping to keep home prices manageable for many buyers. Today’s rates for a 30-year fixed jumbo loan is only approximately 4%APR. The Fed hasn’t increased the rates as expected, but I guess in terms of the Bay Area real estate market, they really don’t need to right now, because the market is correcting itself anyway…. nice and steadily. Let’s wait and see what happens next when we get a surge of newly minted millionaires from all the IPO’s set to hit the marketplace! 
 
Word around town is that there’s going to be approximately 6,000 mega-millionaires made in 2019.  There were only about 6,000 sales in San Francisco last year. There’s no doubt in my mind that all these IPO’s will greatly affect the real estate prices and increase competition in the Bay Area. Those who are thinking of buying should definitely do so now before the plethora of cash buyers come into the market probably by late 2019 or early 2020 after their waiting periods are over. 
 
If you’re one of those people or know someone who is in the market to buy or sell a home, please feel free to call me if you want to talk more real estate. As usual, we are here to help and would love to hear from you. We count on your referrals to keep us going, so please send some folks our way!
 
Have a great month everyone!
 
 
From:
Monica Sagullo and the Hatch Realty Group
 
PS
We are still looking for an office to buy but the options have been few and far between. If you know of anything that would work for us, please let me know.