By John M Lee
The spring selling season is upon us. The first quarter of 2014 flew by quickly and gives us an early indication of what the real estate market will be like for the rest of the year!
We entered the year with a small 2.6 percent increase in sales prices year over last year, compared to a 17.6 percent increase in median sales prices from 2012 to 2013. The most important question at the start of the year was whether the increase in prices would encourage more sellers to put their properties on the market.
What happened as we entered into 2014? We were met with an economy that is on the rise: the stock market took a dip earlier in the quarter but has bounced back strong; unemployment numbers are declining, and consumer con- fidence is up. Real estate buyers are responding by snatching up homes more intensely than the last cycle!
In addition, mortgage interest rates have risen but remained at historical lows and rents have moved up, thus buyers are out in force looking to lock-in at today’s rates with a long-term loan to secure their future hous- ing needs. The attitude lately has
Judge Rules: Ex-Sunset
Supervisor to Stay in Jail
Former Sunset District Supervisor Ed Jew’s attempt to avoid county jail time was denied after a San Francisco judge rejected his appeal. He will now serve up to a year for lying about where he lived when he was a city supervisor.
Jew, who has already served nearly five years in federal prison on extortion and bribery charges.
Jew resigned from the SF Board of Supervisors in 2008 and pleaded guilty to extorting $84,000 from the owners of “Quickly,” a tapioca drink store.
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Would Track Vacant Sites
San Francisco Supervisor Katy Tang introduced legislation on March 25 to address the issue of commercial vacancies.
Based on the Department of Building Inspection’s (DBI) cur- rent vacant building registration report, there are 239 vacant buildings in San Francisco, 45
been if we don’t buy it today, prices will be higher tomorrow and might be out of reach a year from now.
Another trend that is notewor- thy is the number of all-cash buyers closing on homes in the market. Historically, we were closer to 5 – 10 percent. Currently, we are seeing maybe 20 – 25 percent. We are also see- ing much more international money flowing into the City than ever before.
As with every year, inventory drops near the end of the year and going into the first quarter there are not many homes for sale. The same pattern occurred this year, but with an increase in demand, properties went into contract rapidly resulting in even lower inventory. The Market Focus Report, published by the San Francisco Association of Realtors, reported the supply of single-family homes would last 1.2 months, meaning that if no other inventory came on the mar- ket it would take 1.2 months to sell all of the listed homes. This is an historic low number and indicates that we are in a strong seller’s market.
The end result was a very competitive real estate market the first quarter of 2014. We have a market that propagates multiple offers and bidding wars with final sales prices much above listed prices.
For example, I have handled several listings this year where I received more than 20 offers on each home and the properties sold for more than 20 percent higher than expected.
Moving forward, I anticipate more inventory coming on the market as prices have risen. Some sellers, who for one reason or another could not sell in the past, might sell now because of the higher prices.
What does this mean for the consumer? The best advice is to work with a top-notch real estate professional who is on top of the market to provide you with the insights necessary to fulfill your goals in this rapidly changing marketplace.
For buyers, the time to act is right now. There were plenty of opportunities to get into the mar- ket the past few years, and we are near the end of that window of opportunity. Prices have increased this year, while interest rates have remained low (but are rumored to go up soon). So, locking in at these interest rates makes a lot of sense.
For sellers, there has not been a better time to sell. With the shortage in inventory and strong buyer demand, if priced correct- ly, sellers should receive multiple offers and get the highest possi- ble price.
For people who are looking to trade up, this market is challenging as selling is easy, but finding a replacement property presents a new set of challenges. For people who have been considering refinancing, it’s time to take action now as interest rates have no where to go but up.
All of the economic signals are positive moving forward for the foreseeable future.
We are poised and positioned
for a strong real estate year in 2014!
John M. Lee graduated with an MBA from UCLA and specializes in the Richmond and Sunset districts. If you have any real estate questions, call him at (415) 447-6231 or e-mail john- firstname.lastname@example.org.
Categories: Sunset Beacon