Would it be a faux pas to start our SF Real Estate blog/newsletter with a Warren Buffet quote, not once but twice in a year?
Looking at the SF Bay Area real estate landscape today, another Buffet gem comes to mind: "Be fearful when others are greedy, and greedy when others are fearful.”
The following may sound self-serving. (Breaking news: Local Realtor says it's always a great time to buy or sell! lol) However, here is some food for thought for those who may otherwise be ready to buy or sell but feel stuck for one reason or another.
The number of home sales is way down this year, yet prices are surprisingly robust in most neighborhoods of San Francisco because home buyer demand continues to outpace home seller supply. (And home prices are very sticky.) It is true that some buyers are on the sidelines right now. Some sellers are too, for mostly the same reasons: affordability and inventory.
Today’s mortgage rates, coupled with steady or rising home prices, form a potent hit to housing affordability. Per the Mortgage Bankers Association, home loan applications this month “declined to the lowest level since December 1996” nationwide, as 30-year fixed rates lingered above 7%. Meanwhile, the “months supply” of listings in SF has recently fallen even more firmly into seller’s market territory.
⚠️ Beware of the headlines when it comes to interest rates. SF home buyers are a different breed. Most of our clients are locking in rates 1-2% points lower than the national average you hear in the news.
📉 View live supply charts for single-family homes and condo listings.
When confronted with less-than-ideal market conditions, it’s not most people’s knee-jerk reaction to hop off the fence and explore their opportunities. However, it’s exactly this kind of market where the most interesting deals are made. (“Be greedy when others are fearful.”)
For buyers, reduced competition could mean better negotiation terms and a more comfortable home-buying experience (though multiple, non-contingent offers remain common, especially for the most desirable listings). That is worth something—just ask a 2021 buyer. For sellers, would you be surprised to hear that the median price for the bulk of SF house and condo sales, $1–3M, is basically flat year-over-year? (±2%) At the higher end, $3–5M, SF house prices are up 4% and condos are up 15%.
From another angle, as real estate broker-turned-Shark Tank star Barbara Corcoran put it, "When all the buyers come off the sidelines, when interest rates come down, I'm going to get a lot more from my house.” And so will the seller of the next house she buys. After 18+ months of rising rates, there is untold activity pent-up in the market. When the wind shifts and everyone piles in at once, is there any reason to think it will become easier, cheaper, less stressful to make your move?
As in every market, today’s conditions require caution as well as strategic action. Whether or not it’s a “good time” is up to you, your goals, and if the numbers make sense. Frankly, we'd like to retire the whole “good or bad time to buy or sell” discussion. Real estate is far too personal and situational, and often a seller is also a buyer. When is a good time for them?
The market is tight. Timing is always of the essence. And perfect is the enemy of the good, as they say. If you have real estate goals in mind—whether upsizing for growing family, downsizing an empty nest, moving neighborhoods, or investing in property to help your adult children—let’s chat about how to make the most of them.
As always, please don’t hesitate to reach out with any real estate questions. We are happy and grateful to help you and anyone you send our way!
Glitzy downtown S.F. restaurant opens with ‘Champagne buttons’ at tables - SF Chronicle
The AI dream is starting to become an office-filling reality in SF - SF Examiner
Investing in Real Estate for Your Adult Children in San Francisco - DanielleLazier.com
Mortgage demand drops to 27-year low as interest rates pull back - CNBC
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