San Francisco remains a strong attraction for technology companies who recruit and hire employees with the desire and resources to live in the City. Along with the traditional needs of existing residents, 2nd home buyers, and investors, ongoing demand is fueled. Ours is a global market, especially for those homes that have been recently renovated and in move-in-condition. I'm thrilled to live and work in this world-class city.
Anyone who reads real estate news, blogs or newsletters knows that there are 2 particularly vehement camps, each with emotional and sometimes financial attachments to diametrically opposed positions: One never stops insisting that the market is great and getting better (and apparently always will, for both buyers and sellers), and the other never stops shouting, usually gleefully, that the market is crashing or about to crash. Both marshal and exaggerate selected statistics and ignore others. The truth is that there are cycles, lulls and fluctuations in real estate markets and no market can go up 20% a year forever (nor should we want it to). On the other hand, we do not currently see local or macro-economic conditions suggesting any imminent crash. While it is true that economic, political or even environmental crises of various magnitudes can erupt suddenly (such as, in the past 12 months, the Chinese stock market plunge, the crash in oil prices, and Brexit), the impact of these crises can vary enormously, and it is very difficult to predict when the next one will hit.
The SF market is clearly in some kind of transition, currently at a relatively moderate pace, hopefully signifying what is called a soft landing from an over-exuberant state. The speed and scale of any further adjustment should become clearer over the second half of the year.
Indicators are pointing towards "normalization" in our market. Technically speaking, the numbers are showing a Sellers' Market, but behaviorally, the market seems like it is moving into one for Buyers. Buyers are cautious about writing offers as they know there is more inventory to choose from than in the previous several months. We are seeing more contingent offers, which we haven't seen for a while.
If you're selling, positioning for more than 1 offer is key to attracting buyers who are committed and highly motivated. The buying pool is still poised and accustomed to competing and overbidding for a special property, IF they feel there is room to bid upwards. If the price is perceived as too high, they will simply wait on the sidelines for a price reduction. This is not the time to be a maverick and price a property above where prices are landing, otherwise expect for buyers to wait up to 30 days+ before submitting an offer, but then your property has become "stale." Perception of value is everything and there are simply more homes choices available right now.
If you're buying, be prepared to compete with tech innovators, seasoned finance or technology executives, global families seeking safe harbor investments, or empty nesters returning to the City. Your lender relationship and being ready to act immediately are crucial. We find ourselves in a shifting market, not as exuberant but still quite active. Real estate prices are cyclical and rise & fall. The way that we protect ourselves is to buy for the long term: 5+ years. San Francisco was effected by the Great Recession for 3 years, so it seems that 5 years is a safe time frame to hold a property until its value returns, if and when the next adjustment occurs.
Are you considering a move or a vacation home? I can introduce you to prequalified agents in just about any area: from Napa to Nice, Boston to Buenos Aires, Miami to Morocco, the Sotheby’s reach extends far. Whether augmenting your portfolio with a new primary residence, a vacation property, or investment property, I'd be delighted to assist with your real estate needs. Who you work with matters.
This Web site is not the official Web site of Sotheby's International Realty, Inc. Sotheby's International Realty, Inc. does not make any representation or warranty regarding any information, including without limitation its accuracy or completeness, contained on this Web site.