What does the San Francisco real estate market hold in store for homeowners and interested buyers? While we can’t look into a crystal ball for the exact market play-by-play (if only), a recent online MarketWatch article, written by top-producing Coldwell Banker Residential Brokerage Independent Sales Associate Linda Van Drent, hints at an expected positive change on the horizon for the San Francisco Bay Area housing market in 2016.
Linda explains that while Bay Area home summer prices “neared their pre-recession all-time highs as sales soared,” with most Bay Area counties seeing double-digit gains in sales prices—seasoned Sales Associates are projecting that the real estate market is heading away from a period of double-digit appreciation.
“Home-price appreciation has outpaced income growth to the point that we are beginning to see a tipping point,” says Linda. “Inventory is slowly increasing and indications are the playing field is beginning to change.”
So what does this mean for interested buyers and sellers? We asked Linda to be our very own fortune-teller of sorts.
You’ve been a top producing Independent Sales Associate in the Bay Area for over 25 years. What’s your secret recipe for success?
I think every story of success entails long hard hours of work. There is no getting around it and there is no free lunch. But, if you’re working towards something that you’re passionate about, something you love – then is it really work?
It’s safe to say that San Francisco and the surrounding Bay Area remains one of the nation’s hottest markets. How did you find your place as a Sales Associate in a market that traditionally juggles the issue of supply and demand?
Low inventory currently is a national challenge. Over my long career I have faced many challenges—supple and demand is just one of them. I have seen times when it was hard to get homes insured, when interest rates were in the double digits, when the financial markets crashed, and when the Oakland fire took out 3,200 homes. The real challenge is anticipating change and then helping your client set their expectations.
Congratulations on your new columnist gig for MarketWatch! What inspired you to become a featured blogger for the online site?
I was inspired to compete for this assignment as I find staying current on financial and real estate markets stimulating and a key to my business. Writing is a creative outlet and heaven knows we all need to step back from what can be a 24/7 career and do something just because it nourishes your soul.
Speaking of the real estate market, did your market present any surprises this year?
I find it very interesting to see what young people today are buying. For instance, in San Francisco many people in their 40’s are buying small 1 or 2 bedroom downtown condos and these places are running around $1,000 (or more) per square foot with HOA fees starting at $1,000 per month! They are basically buying bedrooms and the city is their living room. Parking? This is extra—if you can get it.
Can you share with us any other changes or trends that you noticed in your real estate market this past year?
The high demand among the young demographic (under 40’s) is spilling over to the East Bay. Some are buying condos while many are buying small homes. What remains consistent is the “walk-to” factor—they want to be able to “walk to” transportation, shops and restaurants.
What makes the San Francisco market unique when compared to other global cities?
San Francisco is highly attractive world-class city. It is less expensive to buy here than comparable places in New York, London, Paris, or Hong Kong. We have wonderful weather and a vibrant economy. Our real estate is considered a safe haven for foreign investors.
Going back to the topic of fluctuations and trends, your MarketWatch article explores the possibility of positive change on the horizon for the San Francisco Bay Area housing market. What variables in your current housing market support this prediction?
Year after year double-digit price gains in Bay Area housing are unsustainable. These gains out-pace real wage growth and has reached a point where we are seeing signs of market resistance. What does this look like?
- Fewer multiple offers
- Some homes have price reductions and stay on the market longer
- Buyers want more value and are willing to wait for something that is in good condition and really suits their needs
There’s talk in the real estate world of a more buyer-friendly market in the Bay Area. If the market shift was to take place, what advice can you give to interested buyers?
- Don’t give up!
- Focus on the best homes in your price range
- Invest wisely by buying location, layout and quality
- Step up to the plate and make a strong offer when a great home appears
Conversely, what advice can you give to sellers?
Buyer’s attitudes have changed. Homes going forward need to be move-in ready whenever possible and if repairs and cosmetic improvements cannot be made, the home needs to be priced aggressively reflecting the condition.
Would these possible market changes have any effect on how you would in turn approach the real estate market?
I think the pace of selling and buying will slow down slightly over time. This will give REALTORS® more time to focus on their clients, their business and their prospecting.
Do you have any words of wisdom to offer new Sales Associates just now stepping into the Bay Area real estate market?
I encourage new Sales Associates to have a number of seasoned mentors to help them sharpen their skills, have a sounding board, navigate the escrow process, celebrate their successes and learn from their losses.
Well there you have it! For a complete insider’s look into market changes that are expected to play out, check out Linda’s article.