YOU MIGHT AS WELL PRICE IT AT $1.
Take Away Item 1: List Price is Irrelevant As the Market Will Find the ‘Right’ Value
We live in a market where more than 50% of properties sell over list price — even with COVID-19.
Every market has its own rules, customs and practices. In San Francisco, agents had tended to price property listings less than what these properties were worth. Right or wrong it’s the way it has been done here since the economy recovered after the 2012 low point in the market. Now, with the pandemic, rarer instances of when agents would practice ‘transparent’ are becoming more common . But still, for every listing that is ‘transparently’ priced we can show you at least 3 more that are radically underpriced on purpose. The rationale behind this tactic is to attract interest and attention that would yield multiple offers that would go to drive a property’s final sale price — much like an auction boosts sale prices when people get caught up in the competitive moment let their emotions dictate their bids.
IT WON’T BE CHEAP.
Take Away Item 2: It’s Expensive Here, But It’s Always Been (and there’s room to go)
We live in a market where $1,000/sqft is the norm that’s still moving towards $1,200/sqft and beyond.
There have been housing crunches and booms since the very beginning. Crises, pandemics, crashes and bubbles ever since gold was found up north in 1849. But apart from that gold, San Francisco has always been a destination and aspirational city to be a part of. There are the big attractions that draw people here: a temperate climate, the pervasive entrepreneurial spirit, the diversity of people from all over the country and world, the area’s natural beauty, cuisine, proximity to nature, its universities, and, of course, the engines of the tech and data economy are based here among more.
Real estate is at the very heart of many of the tourist attractions here — the Painted Ladies on Alamo Square are, after all, a row of Victorian houses with one of them seller as a fixer in 2020 for more than $3.5 million and Lombard Street is a, well, street.
San Francisco has drawn entrepreneurs and innovators alike as it has done so since its founding. Population booms and housing crunches (and crises) have been as much a part of San Francisco as the fog has been. Because it’s been a boom town, it has attracted folks from far and wide seeking opportunity which has led to diverse architecture, housing patterns and market patterns as a result.
Combine the above draws with the fact that we’ve run out of room to build anything (not to mention the cost) the Bay Area’s real estate market has been impact by a lot of policy-driven factors that make land a scarce commodity. Some of those policies relate to strong historic protections, property tax and capital gains tax policies that favor long-term ownership, rent control laws and heavily regulated building regulations that make construction contentious and difficult many times, all combine to make the place even more valuable than it would otherwise be.