At the risk of sounding bitter and petty (not for the 1st time, I'm sure), I found just a wee bit of glee to read in the New York Times that even holier-than-thou Manhattan real estate is feeling the downturn.
Of course, be careful to understand the broader picture.
Some neighborhoods have seen median home prices go down while others have seen their real estate values go up.
Most notably, "the neighborhoods that fared the best through the third quarter included Fifth Avenue and Park Avenue from 59th to 96th Streets, where median prices went up 35 percent." 35% folks! Wow. Looks like their are some Masters left...just not at Lehman Brothers.
Points of interest & commonality to our San Francisco real estate market:
1. Real estate is very local.
The outer lying, less expensive neighborhoods and the areas that we consider transitional like South of Market or the Dogpatch have been & will be hardest hit.
"As to whether the neighborhoods that have softened first will weaken more quickly, Mr. Miller said: “Emerging neighborhoods by definition are more volatile. They have more potential to decline when the market weakens, and conversely they have more potential upside when the market returns.”
Our San Francisco real estate market plays out the same way. You'll see much deeper price declines in outerlying and/or transitional neighborhoods. Think the Excelsior, Soma & Central Waterfront lofts, the parts of Bernal Heights on top of the freeway, etc.
Check statistics carefully and don't rely on city-wide, county-wide or heaven forbid Bay Area-wide analysis. Find out what is going on in your micro-market.
2. If you want to sell, price it right and by right, I mean lower than the competition.
Get buyers in the door. The more buyers at your showings, the higher the sales price. You gotta get the action at the open house and today that means aggressive pricing.
If a property is priced AND presented right, it will sell in today's SF housing market. Compared to the rest of the country, San Francisco and Manhattan real estate is doing GREAT. If you've owned your home for a few years, you might consider taking advantage of the incredible move-up buying opportunity.
"She (Veronica Raehse ) and other brokers said that they had been advising sellers to price their apartments 10 to 15 percent below the latest comparable sales. “You have to use comps as a starting point and price down from there,” she said. “It’s the only way to get more activity, because if buyers don’t think a deal is being offered, they’re just not going to bother with it.”
Donald Kemper, a vice president of Prudential Douglas Elliman, agreed that the only way to be a successful seller in the current market is to set a competitive price. “You have to establish value right away,” he said. “Because nobody wants to buy now and find that they could get it for less next year.”
3. The Election eased tensions and provides some clarity.
Whether you are happy or not about the results, the Election's conclusion brings a little bit of certainty to the table. There was (and still is) too much confusion and uncertainty. Uncertainty leads to fear. Fear to panic. Panic to paralyis. Folks just don't seem to do much of anything when they are in fear. They don't buy cars. They don't buy stocks. And, the don't buy real estate.
Confusion - Uncertainty - Fear - Panic - Paralysis
We are calling it "the Obama effect." One of many, I imagine.
Already, I am getting more emails and calls from buyers who are now ready to buy. I guess these first time buyers are ready to change their own lives too! 😉 Seriously, though, buyers are getting a clue that this opportunity won't last forever.
(Actually, one client of mine who found me on this Blog (yay!) wrote an offer on his dream home 2 days after the Election!)
I'm also hearing from home owners who want to "trade-up" from their starter home, condo or loft.
They want to take advantage of the chance to move-up to a bigger, nicer house in a different neighborhood. They want the bigger discount on the new house. In the long run, they know it will actually save them money to take the loss on their current, "starter home."
For my own real estate business, I expect to work with more home buyers and sellers in the 4th quarter than I did in the 3rd!
What are your plans?
