A: What an exciting time to be in San Francisco real estate: adjusting interest rates, chaotic political environment, volatile stock market, short term rental restrictions.
Can anything else be added to the formula? Yes — low unemployment, limited construction, city-based IT/biotech/hi-tech companies and rumors of IPOs.
This seemingly incompatible recipe has created an extremely expensive market for renters and buyers. “Super commutes” are becoming more prevalent.
Buyers should consider a “hold” position of five to seven years, as we are at a nearly 10 year bull market and are seeing signs of “cooling” appreciation. Flip buyers should be particularly astute with purchase/remodeling costs to hedge against more modest gains. Sellers should be aware that buyers are price sensitive and “location location location” still rings true.
Though the holiday feast may suggest a lethargic market, those prepared to strike may find themselves with less competition or an opportunity to negotiate.
Paul Ybarbo, Sotheby’s International Realty, 415-640-7281, firstname.lastname@example.org.
A: The Bay Area real estate market shifted in 2018 with buyers gaining a bit of control. The market will be more balanced in 2019, bringing stable prices and opportunities for both buyers and sellers.
Sellers will still be able to lock in profits, but higher interest rates and high prices will result in less demand and more days on market. Proper pricing and choosing an agent who is expert at marketing and making deals will be essential.
Cooling demand will give buyers more time to investigate and make an informed decision.
The Bay Area’s innovative companies will create wealth and buoy the market. Several local companies plan to go public in 2019, and each IPO event should create new millionaires who will diversify into real estate.
There are warning signs in other markets—including New York and Los Angeles—where the market has been slowing. Consumer confidence is up right now, but markets can turn by a terrorist attack or a natural disaster. There is also political risk, with a federal government that is stagnated and in chaos. Markets hate that unpredictability.
John Solaegui, Compass, 415-999-0673, email@example.com.
A: Based on 2018 data I can extrapolate trends for the first quarter of 2019 but not beyond. Since the mid 2018, single family prices have decreased 2 to 10 percent. Smart sellers adjusted by lowering asking prices. Still, homes that sold within 30 days closed an average of 115 percent above list, or about $100,000 on a $900,000 home.
San Leandro has been the most active market recently. This is not surprising given it has the lowest average price per square foot and reasonable access to employment centers. No question buyers are out looking. One new listing in Montclair, which had its first open two days before Christmas, had around 40 buyers come through and is considering three offers.
More housing will come on the market in the first quarter of 2019, but there are still more buyers than sellers. Prices have already adjusted and rates are stable, thus there is no further downward pressure on prices.
Astrid Lacitis, Vanguard Properties, 415-860-0765, firstname.lastname@example.org.