San Francisco Real Estate - Residential

San Francisco Real Estate Market Update for 9/4 - 9/10/06

Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report:

"The housing market is still in holiday siesta mode. Listing inventory increased as sellers begin to put their homes on the market for the fall. The buyers are out there as evidenced by their attendance at open homes. First time open houses attract the majority of buyers looking for the “right home” (meaning priced well and in perfect shape). A new Berkeley listing under $700.000 was visited by 42 groups of buyers.

"The media still continues to hammer the housing market---trying to look for every negative shred of evidence that the housing market has tanked. In spite of their efforts—many smart buyers know this is an excellent time to buy---more choice, a break in interest rates as they continue to come done and a environment conducive to negotiations. Still 30 % of our offices received multiple offers—20% at the 30% plus level. Down a bit from previous weeks, but still indicating good homes go quickly. With that said, there are still a majority of sellers who have not adjusted to the new reality---homes are not going up with double digit appreciation. Homes in today’s market are either flat from last year or slightly lower (10% or less). Sellers need to remember that prices went up 50% plus from 2003-2005. A small reduction from the highs of last year still leaves outstanding returns, as real estate is a leveraged investment. The gains are substantial and well beyond any other asset class.

"We are seeing an increase among buyers wanting to renegotiate offers during the escrow period, especially after inspections. This is why it is important for sellers to have pre-sale reports so that buyers can make offers based on the condition of the home. This can prevent unnecessary fall out. Sellers should also take care of any deferred maintenance which also helps prevent reasons for renegotiation.

"Believe it or not aggressively priced properties are attracting buyers in droves. A Parkside listing in San Francisco received 42 offers---sounds like 2005. What it means is that buyers are ready to leap when they see an outstanding value. Some buyers have a challenging time of it understanding that properties can receive multiple offers---they believe everything they read in the media about the bubble bursting. This is not the case in markets that have smaller inventories----like the buyer who lost in a multiple offer presentation in Burlingame found out the hard way.. He couldn’t understand why his offer was outbid. The reason is that the SF/Bay Area is a highly attractive place to live and certain areas, no matter what is happening in the general market, their desirability increases value of properties in spite of the transitional market.

"Here are the numbers for the week: 12 offices saw increasing inventories, 13 steady and 6 decreasing----4 offices reported increasing sales activity, 19 steady and 8 decreasing."

- Avram Goldman

* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.

posted by SFResidence.com @ 1:39 PM