San Francisco Real Estate
In the last several months, the low supply and high demand for homes and condos in San Francisco have driven up real estate prices. In this sellers’ market, homeowners are receiving several offers on their properties, and the resulting bidding wars have allowed them to sell their homes for well above the asking price. In May 2013, single-family homes in San Francisco sold for an average price of 1.43 million dollars, which is almost 29% higher than their average sale price just three years earlier. Similarly, condominiums sold for an average of 979.5 thousand dollars in May, which is almost 24% higher than their average sale price in May 2010. Another plus for sellers in the current market is that their homes are selling faster than they have in the last eight years. In 2013, homes stayed on the market for an average of 36 days, compared to 63 days just two years ago.
So what can buyers do?
1) Looking for off market listings is the best way to acquire property in this market. Getting to the seller with an attractive offer before they bring their house to the market can help you avoid competitive bidding, which will most likely result in a higher sales price. Finding a real estate agent with the inside scoop on pocket listings can help make the home buying process more stress free and get you the best bang for your buck.
2) Pay close attention to market fluctuations in the areas in which you are interested in purchasing a home (Figure 2). Markets are unpredictable. They can change quickly, and even the best analysts are sometimes wrong. Paying close attention to home prices in your desired neighborhoods can help you seize the opportunity to purchase the home you want when the price is right. Last month, in May 2013, the increase in the number of listings in San Francisco drove down the average list price for homes more than 100 thousand dollars.
Despite an almost 11 percent increase in average sales prices from last quarter, single-family homes in Pacific Heights this quarter are actually selling for about four percent less than their asking price. On the other hand, condominiums are selling for 6 percent more than they were last quarter, at around four percent higher than the asking price. Although Pacific Heights remains one of San Francisco’s most desirable neighborhoods, its homes’ price per square foot has declined three percent in the past year, while the price per square foot for San Francisco as a whole has risen almost 20 percent.
Property values in the Russian Hill area have skyrocketed in the last year. If you are looking to sell your Russinan Hill residence, now is the time to do it. Property values have increased by an astonishing 18 percent over last year and the city as a whole has felt a 23 percent rise. Homes and condominiums are selling for well over asking price, undoubtedly making this a seller’s market.
Like Russian Hill, properties in San Francisco’s Cow Hollow neighborhood have experienced a large increase in value since last year. Residences are selling for 31 percent more than in 2012, at a 16 percent increase in their price per square foot. Both single-family homes and condominiums are selling for about three percent higher than the asking price, which represents a significant amount of money given their multi-million dollar values.
The Marina District
Since February this year, property values in the Marina District have increased about seven and a half percent. This quarter, single-family homes are selling for about 2 percent above asking price after being on the market for around 20 days. Condominiums, after being on the market for 25 days, are selling at approximately four percent above asking price. Demand for real estate in the Marina District is high, and San Francisco’s young professionals are willing to pay up for its location.