Welcome to my quarterly (Q3 2011) San Francisco real estate update. Here’s where I keep you posted on the SF market (stats below), and also remind you that I — someone you know and trust — am here to help you and yours with any real estate need! I continue to place in the top 1-2% of San Francisco Realtors. Let me put my expertise to work for you, your friends and family!
We Are Yo-Yo’s
September retail sales rose sharply, buyers lined up at Apple stores for the iPhone 4S, Google issued a stellar earnings report, the US stock market popped back up – one analyst was quoted as saying: “Recent economic data reinforces our belief that the U.S. economy is not in a recession. The consumer is in fact coming back and starting to spend.” Then the stock market went down again on some more bad news from Europe, and we’re back to feeling like yo-yo’s.
Our Own Little World…or Bubble
And, while clearly we’d be wise to remain cautious in our optimism, and conservative in our financial decision-making, and, while a lot still hinges on what American and European leaders do/don’t do next, some of the good news is actually most meaningful for– in fact, emanating from — the Bay Area. As usual, I am seeing the positive impact of San Francisco’s diverse and strong economy on our unique real estate market. We’re not close to pre- 2008 levels, but having Facebook, Google, Apple, Twitter, Genentech, and all of the other strong bio tech and high tech companies’ employees here, vying to live in our city is a huge boon to our local market. These people would rather live in San Francisco near Noe Valley’s Apple/Facebook/Google work-shuttle hub, than in the actual towns those companies are located in — just outside of San Francisco. Let’s just say, there’s a lot of cash floating around here.
And, a recent San Francisco Chronicle article reports that despite a scary national unemployment rate, certain cities are in fact hiring, with San Francisco winding up second on a list of top ten metropolitan areas adding jobs. It notes positive trends for the city in management, information technology, architecture, and engineering among other endeavors.
Silicon Valley Express
And, that cash is making its mark: SF’s District 5, home to the Noe Valley neighborhood — where you can catch a shuttle to top Silicon Valley companies, or be on the freeway in just minutes that will also take you to Silicon Valley– has continued to experience healthy sales activity. Since September 2010, the number of homes under contract in the district has risen by 10.3 percent, while the number of homes sold has increased by 35.3 percent. In Noe Valley specifically, comparing Q3 of 2010 to Q3 2011, the average sales price of a home has risen more than 10%. And, Noe appears to be gaining back some of it’s Great Recession losses — in Q3 of this year the average sales price of a home in Noe now is only 4% off off of it’s 2007 high.
Active Buyers, But There’s Nothing to Buy
Also, SF’s inventory of for sale homes is still quite low, creating some leverage for sellers. For properties priced below $700,000, the months of supply inventory dropped by 38.7 percent, compared with last year, to a reading of 2.5 months. For properties priced between $700,000 and $1.2 million, the months of supply inventory fell by 26.9 percent, compared with last year, also to 2.5 months. Supply of less than three months normally indicates a seller’s market where, due to the lack of inventory, sellers have more negotiating leverage. And, the market is bearing that out. Even though the number of single-family homes for sale has decreased since September 2010 by 16.1 percent citywide, the number of single-family homes under contract in September rose by 13.9 percent, while the number of homes sold also increased by 5.7 percent.
Of course people can still opt to rent, but San Francisco was just reported as having the nation’s second-largest increase in apartment rents last quarter, at 4.5 percent. I know of a two-bedroom place that a Facebook engineer snagged over other bidders for close to $4,000/mo. It’s become a landlord’s market for sure.
Money Is Cheap — But Try Getting a Loan
I just refinanced again — down to 4% with no closing costs, no fees whatsover. Obviously if you have the equity and the wherewithal to refinance, now is the time. Don’t be shocked when your appraisal comes in lower than what you know you can sell your home for. Banks are doing all they can to cover their own butts. If they do the math, and find you have some extra cash lying around, they will only give you value on what is absolutely necessary.
This isn’t only the case for refinances. If you are in a purchase, and the bank puts it together that you can put more money down — don’t be surprised if there is suddenly a problem with the appraisal, or some technicality that holds up your loan approval. It’s the bank trying to squeeze more money from you!
Rates are on a roller coaster because of the market uncertainty — but still at an all time low.
On October 1, the conforming loan limit decreased, and the U.S. stopped guaranteeing loans larger than $625,500 (reduced from $729,750 in SF). Since the average price of a home in most neighborhoods here is close to a million, it just got a bit more difficult and expensive for folks to buy. The following information indicates the city/county, percent affected, previous loan limit, and new loan limit.
San Francisco/CA, 11 percent, $729,750, $625,500; San Mateo/CA, 8.5 percent, $729,750, $625,500; Arlington/VA, 8.3 percent, $729,750, $625,500; Santa Clara/CA, 6.2 percent, $729,750, $625,500; Washington/DC, 5.7 percent, $729,750, $625,500; San Diego/CA, 5 percent, $697,500, $546,250; Orange/CA, 4.5 percent, $729,750, $625,500; Fairfax City and County/VA, 4.4 percent, $729,750, $625,500; Suffolk/VA, 4.3 percent, $523,750, $465,750; King/WA, 3.9 percent; $567,500, $506,000; Los Angeles/CA, 3.1 percent; $729,750, $625,500; Queens/NY, 2.1 percent, $729,750, $625,500; Sacramento/CA 0.7 percent, $580,000, $474,950; Baltimore City/MD, 0.7 percent; $560,000, $494,500; Multnomah/OR, 0.1 percent, $418,750, $417,000.
Giving Thanks
I am so thankful for my amazing clients and friends. You are constantly sending people my way and therefore my business is almost 100% based on recommendation and word of mouth– that’s pretty incredible. Thank you for all of your faith in me and know that I will continue to be someone who will go above and beyond for you and the people you send my way.
As always, please don’t hesitate to call with any real estate question, big or small, or just to catch up. If you want to know how much your place is worth in today’s market, recommendations for contractors, painters, gardeners, mortgage brokers, where to get the most bang for your buck in your remodel, and etc. give me a call. I’ll continue to keep you updated.
Happy Fall,
Jessica
