Hi friends,
As more and more Bay Area listings sell above asking price, the SF Chronicle ponders: Is it demand, or 'cruel' pricing strategies?
To the outside observer, it's startling — even deceptive or cruel — when homes are listed for hundreds of thousands of dollars below their eventual sale price.
But to those of us in the business, it's more along the lines of guilt-free indoor dining, or hugging your grandparents:
Just another return to normalcy in the not-quite-post-COVID era.
See, an open secret of Bay Area real estate is that homes have always sold above asking.
Last year was an outlier, with San Francisco's ratio of sales above list price dipping to 44% in June, down to 36% in January, then rising sharply to 63% last month — still a far cry from highs of 75-80% in the past decade.
Before COVID, the last big dip in sales over list price came in the Great Recession.
Barring another health or financial crisis, I don't expect San Francisco home pricing conventions to change soon. Attracting buyers with a flashy low price is pretty well baked into the system.
I know, it's weird. So here's my advice to buyers and sellers looking to navigate this market:
Evaluate homes the way agents and appraisers do. Look at recent comparable sales in the area. Focus heavily on the current market, pricing dynamics and the level of serious interest in the particular listing. The list price is the strongest marketing tool at a seller’s disposal. Price to attract the widest net of possible and probable buyers.
Market value is what a ready, willing and able buyer will pay today for a property. Look beyond the price tag for the home's real value. Even tools like Zillow's Zestimate can be helpful for a rough ballpark figure, though the accuracy varies widely from home to home.
Most importantly, talk to your agent! We live and breathe this stuff, we have insider intel, and we're not too busy to help no matter where you are in your real estate journey.
As always, please don't hesitate to reach out with any real estate-related questions. We are very happy (and grateful!) to help you and anyone you send our way!
Warmly,
Also featured in our newsletter:
SF Chronicle: Are Wall Street hedge funds buying up homes in the Bay Area?
The Bold Italic: Why San Francisco Could Become the First City in America to Reach Herd Immunity
SFGATE: Now that San Francisco is open, will restaurants finally recover?
And the San Francisco Real Estate Market Update for June 2021
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