September Market Update

Happy September folks! I hope everyone enjoyed the long holiday weekend! Now that all the kids are back in school and everyone’s back to their regular programming (including myself), it’s time to get our focus back into the market. I have been hounding all my agents to reach out to their past buyers who couldn’t break into the market due to the competition or a lack of downpayment. Those who haven’t been able to buy in the past 4 years due to the stiff competition or because of a low downpayment finally have their window of opportunity now, especially if they are looking in the East and South Bay where prices have shown the most “improvement” for buyers.

See Graph below for price per SqFt change by county provided by the California Association of Realtors.

For those who have bought, there’s good news for you too! Rates are at an all time low and you may be able to save a few bucks if you contact your lender for a refinance. If you were already able to lock in a good rate, hang tight and just enjoy your home. The Bay Area market is nice and steady with inventory still very low. 
 

Personally, I’m busy with both buyers and sellers alike, so I know that there’s definitely still a demand out there, but I am also noticing that we are entering a period of unrest. With what’s going on with Hong Kong and the upcoming elections, I’ve been hearing a lot of naysayers say that they are waiting for “the crash.” I honestly just don’t see a crash happening in the near future, but what do I know. I am only in it every single day. Unless something crazy happens to the Bay Area, like what is happening in Hong Kong right now, I really dont see a crash happening anytime soon. There are still multiple offers in some areas of the Bay area and lots of people needing housing.  As a matter of fact, I came in 2nd place for an offer in Redwood Shores this week and we lost for only $15k, but we didn't cry about it because we knew there will be more opportunities ahead.

 If you’re looking for a permanent home where you will hang your hat for at least 5 years, in my opinion it’s time to lock in these rates and see if there’s a home out there for you. Anything is better than renting  where you’re basically throwing money in the trash and the benefits of homeownership outweigh the uncertainty of the market. 

However, if you‘re looking to the market for a quick buck, now is not the time to make a move. I am wary of taking any new flips unless I can get the home at least 25% below market value. With the amount contractors are costing now because of the demand and how long its been taking to do remodels with permits, I would advise to really think about it before getting into a flip. If I were to buy something for investment now, I would buy a rental and capitalize on the equity I will earn with someone else paying the mortgage. Increase of market value will be considered icing on the cake at this point.

There’s news that many Hong Kongers are plotting their exodus from China due to the unrest and they say though most are finding homes in South East Asia and Australia, some are seeking investments in the United States as well. I haven’t seen too much foreign money lately, but I'm curious to see if that will have an effect. Also I haven’t seen any of that IPO money that was predicted to kick up the Bay Area market. Where are all our newly minted millionares?

If you have any questions about the Bay Area Real Estate market or looking to buy or sell a home, please contact Hatch Realty Group today! We are here to help!

Wishing you a wonderful month ahead!

~Monica Sagullo, Broker, President