“how is the market doing?”
The New Year started with hope and momentum. Inventory started to grow and so did sales. Please see the charts above or attached.
When people ask me, “how is the market doing?” It’s hard for me to answer in one sentence. Every neighborhood is “a market”. The market conditions change from area to area according to school districts and even geography. Homes in the hills with a view sell for a lot more then in the valley. Homes that belong to a good elementary school or a certain high school sell much faster and for a higher price. Just a few days ago, a small house in Sunnyvale (about 1500 s.f.), in the Sunnyvale school district but in the Homestead High school area was sold for about $120k more than asking price. It needs a new kitchen and a bathroom, and the floors need refinishing. I think the buyers will have to invest at least another $50k to make it nice. By then the price will reach about a million dollars. Less than one mile north of that house, homes are selling in short sales and foreclosures. Another example in Mountain View – the Google town: Some areas near Los Altos are selling fast at Los Altos prices, while less than a mile north in a neighborhood of Eichler style homes you can find homes that are priced lower than the amount of their loan. When you go inside you see 4 families, mostly single moms with babies sharing the same kitchen, and even in the freezing garage there are a mom and a baby using it as their home. The poor owners bought that home thinking that they would be able to afford it and now they rent the rooms so that they can pay the mortgage. The banks are willing to absorb 15% of the loan amount and cut their losses short. The banks are not in the business of selling homes. They only want to lend money.
San Francisco ’s market is not behaving differently. Homes in the most expensive neighborhoods like Nob Hill, Noe Valley and Pacific Heights sell quickly and strongly. These buyers can easily get good loans or pay cash, whereas other neighborhoods like Portola, Ingleside, Ocean View, Mission Terrace, the Outer Mission, Bayview and Excelsior have been hit by the real estate downturn.
The spring is coming and many new listings will revive the market and add more selection of homes for selective buyers...
