I N T H E K N O W , A P R I L 1 7 , 2 0 1 6
Things are a changin’
San Francisco’s spring real estate market is proving to be one where we’re seeing the return of the R-word. But is it R for Reduction, or R for Realistic?
WE’RE STARTING TO see something we haven’t seen for a long time in the City: email blasts proclaiming price reductions. This is in direct contrast to many other properties that are clearly priced to entice. The market has adjusted and is still adjusting to a new reality but there are contradictions. Nevertheless, here a few points we’ve observed over the last few weeks (and they don’t necessarily mesh together seamlessly). Take a read and see how you fit in.
Bid at what you can as you never know. The precise anxiety and uncertainty we’re focusing on here can work to a buyer’s advantage especially if the sellers have owned a property for a long time and any sale proceeds they have will be subject to capital gains or they want to buy something different or they’re just happy to get an offer. But if we never bid, we’d never know (or worse, you see the property you really wanted sell for less than you were willing to pay!)
Reductions are for real…mostly. Sometimes agent will reduce a lot more than you’d think to draw attention but have no real intention of selling at that new price. These days we’re seeing agents being a little more geniune about reduced prices.
Take advantage of Buy-it-now prices. It’s hard to believe but sometimes the price is, well, the prince. No game playing.
When in doubt, ask. To see if the last two points are true it always pays to have your us ask what a seller really wants. There may be other factors at play that we have no idea about.
Teaser prices are soo last year… except for when they’re not. Too many people are self-editing themselves and not getting properties, which loops back to point number one.
Less Sales Volume in San Francisco But Not for Us and Vanguard
Vanguard has moved up the rankings in the MLS and now ranks 4th in the entire City and is closing in on Zephyr, who’s number 3. Vanguard is Number 1 in District 9 (Bernal Heights, the Inner Mission, South Beach, SOMA, Potrero, Dogpatch, Mission Bay) and often holds the number 1 or number 2 ranking in District 5 (Noe Valley, Glen Park, Mission Dolores, Eureka Valley and Duboce Triangle) with this past quarter seeing Vanguard as the silver medalist. Interestingly, real estate as a whole in San Francisco slowed over the first quarter of 2016. Reported sales on the MLS went from $3.7 billion in Q1 2015 to $3.3 billion in Q1 2016. Vanguard, though, saw our sales increase over the same period. It just goes to show that we do buck the trends.
Continued Long Delays at the Assessor’s Office Means Longer Time Until Property Tax Reassessments
Jonathan, Raffi and I are about strategic purchases and utilizing the cash you have without breaking the bank. We’ll suggest folks getting homes that aren’t their ‘forever’ home should consider getting an ARM (adjustable rate mortgage) so you don’t end up paying for the benefit of having a locked interest rate for years you won’t be owning a given property or if you’re going to remodel it, which can save hundreds of dollars a month in mortgage payments. Another fringe benefit that’s only temporary in nature is the fact that the City may take a long time to get to reassessing your property taxes. Assessor Carmen Chu spoke at the Residential Builder’s Association meeting this week and said that her department is still using green-screened, COBOL-operated computers to keep track of the nearly $2 billion property tax base. COBOL is old school and such features as “copy” or “paste” weren’t even heard of when they first created the language in 1959! Right now there are 2,500 change-in-ownership reassessments outstanding; 2,000 appeals and 12,000 new condo units that need their initial assessments.
May the Sales Be With You
So what’s going on? We’re seeing a lot of sellers who were otherwise holding back earlier this year now suddenly spurred into action. Indeed the City’s stagers are booked out at least a month in advance these days and we ourselves have been working with a lot of our sellers to get their properties ready for a May launch. Indeed, May is our favorite time of year as it’s usually sunny, breezy and flush with optimism and so it will be again this year.