Thursday, July 24, 2008

Weekly Sales Report

It is the time of the cautious buyer. People gear up to go out and look at houses, but are wary of entering a real estate market amidst a suffering economy. Nobody argues with the old "buy low sell high" philosophy, but the question is when to get in. I read an article called Housing Rebound: When to Spot One. They talk about the importance of following local data, and comparing year over year statistics rather than comparing this month to last month, as there are yearly cycles.

It is also very important to look at the numbers for sales volume as well as price. Let's look at June for example. According to DataQuick, there were 633 homes sold in San Francisco last June compared to only 571 homes sold this year. That shows a decrease of 9.8% in number of sales. The median price that San Francisco had been holding on to for so long is also showing a decrease. In June of 2007, the median price in San Francisco was $825,000, compared to a median price of $726,500 this June, a decrease of 11.9%.

To take the advice of looking at local statistics even one step further, when you are looking to buy or sell in San Francisco, or anywhere for that matter, you need to do price comparisons for other homes in that specific neighborhood. City wide statistics won't even necessarily apply. There is a great graph also found on DataQuick's website with the same statistics broken down into zip codes. There are some zip codes whose volume and sales activity go either up or down together, but others show interesting differences between sales and volume changes. One of the largest differences is in 94133, which is located in the very north eastern corner of the city around North Beach. While the sales volume plummeted in that area almost 40% in June year over year, the median price went up almost 60%. If you live in Noe Valley and are thinking of selling, 94114 shows a decrease in sales volume of just over 10%, but an increase in median price of 18.3%.

The moral is to look at not only local data, but the neighborhoods surrounding your house or the neighborhoods you are looking to buy into. Have a Realtor help you compile the data.

We have already looked year over year; now for our weekly report. Number of sales was low, but the number has stayed consistent throughout the month. This week, almost half of the sales were reported coming in under the asking price. The big success story of the week is a purchase at Radiance, one of the new developments in Mission Bay. One of our agents represented the buyer in a purchase there, and was able to negotiate the price down $150,000, as well as an additional $25,000 in concessions. There is a lesson in this as well. Technically, you can walk into any of these developments by yourself and purchase a unit. You do not need representation; actually they prefer that you do not have any as they stand to make a higher profit that way. However, as you can see, we will negotiate for you. We have a strong agent network and we talk to each other about what kind of deals people are getting, and where they can be found. What doesn't cost you a dime to begin with can save you a lot of money in the end.

Thursday, July 10, 2008

Weekly Sales Report

Another week of beautiful summer weather, and another week of properties sold in San Francisco. The number of sales was low again this week, but the surprising part of this week's statistics was how many multiple offer situations there were, and how many homes sold over the asking price.

70% of all homes Zephyr sold last week were both in multiple offer situations and sold over the asking price. This was true of the market back in the frenzy five years ago or so when roughly 75% of all properties sold with multiple offers. Of course we have not arrived back at that type of market, but buyers are still out there and are waiting for the right property.

One type of buyer that is definitely out there in full force are investors. They know that now is the time to buy and possibly walk away with a decent price. That brings me to the winner of the multiple offer wars which was 432-436 Laurel Street at California which is right at the Laurel Village shopping center but technically in the Presidio Heights neighborhood. This is a four unit building with two units in the front, two in the back, and a shared courtyard on an extra large lot. The asking price was $1,200,000, there were 7 offers, and it is a probate sale. It went between 20 and 30 percent over the asking price...again like the good old days.

As we must always provide the other end of the spectrum, we will be taking some new clients out on a tour this afternoon. With a price point going up to $750,000 and needing a minimum of two bedrooms somewhere in the central part of the city, I immediately assumed we would only be looking at condominium for their search. I thought just in case I would take a look at the single family homes in their desired neighborhoods and price point, and I was delighted to see there are a good 30 options for them. Granted, some are fixers, others are tenant occupied, and some have no parking. The worst have a combination of all three.

Many buyers have been complaining that the market doesn't feel as "soft" as the media is reporting, as they are being outbid time and again. I believe a sign of the softness is that properties with a strike against them, such as tenants or no parking, are not selling as quickly, and are often having to be reduced in price before moving at all. Pricing is always the key. If it is priced right it will sell; they all eventually do! Remember that when you go to list your home. We can help you do a careful market analysis, one that takes every detail into consideration.

Thursday, July 3, 2008

Weekly Sales Report

Summer is here, and although many people think of the summer as buying season, there is actually usually a dip in sales during this time of year. People are busy with summer activities with the children, vacations, and celebrating the 4th of July! While numbers were slightly up from last week, they still did not hit the highs of the spring. Things should stay relatively calm in the summer, and we will most likely see a peak again in September and October.

Having said that, of the sales we had last week, almost 40% of them were multiple offer situations, some with four and five offers. Another couple I met this past weekend had put some offers in and had been outbid each time. They looked a bit disillusioned, and their parents who were in town visiting from Chicago simply did not believe that it was true. "We believe them, but we can't believe it!"

The property with the most bids this week was a nice little two bedroom condo on 18th Ave in the Central Richmond District; the cross street is California. One might argue that it was priced on the low side for a two bedroom condominium in that neighborhood at $649,000. The second bedroom, however, is straight off the kitchen and the other bedroom, and it is currently set up as a tatami room, which may not appeal to everyone. We liked it as it was, but also thought it would make a perfect office or nursery. Other than that, the building was only a two unit building, with parking, a nice shared garden with direct access from the kitchen of this unit, and it was well cared for and remodelled. It will close at close to 10% over the asking price.

For those of you looking for a deal because of the soft market, don't fret. Almost 20% of the homes sold last week went for under the asking price. At least one property had multiple offers and still sold under the asking price; you are not the only one looking for a deal.

So let's enjoy our summer; along with our weekly updates and other news, we will bring some of the great summer activites San Francisco has to offer which is always a great way to explore the city. This weekend, don't forget to stop by the Fillmore Jazz Festival which is happening on Fillmore between Jackson and Eddy. Make a point to stop by Zephyr's booth which will be at California; Anja and I will be there Saturday afternoon and we will look for you!

Have a wonderful and safe 4th of July!

Tuesday, July 1, 2008

FHA Loans and Other Financing Options

Although life has many twists, turns, and obstacles, one comfort many of us hold on to is that others have gone through the same thing. Any major step we take, whether it be graduation, marriage, a new career, children, etc, someone we know has already been through it and can give us advice. It is also important to know, that advice should always be taken with a grain of salt. The purchase of a new home, especially a first home, is definitely up there with major milestones in life. Surely you know others who have experienced this before you, and in some cases very recently.

While you should definitely listen to the lessons learned by others, and their advice that follows, you must also do your own research and investigations as every situation is unique.

Because of the current state of the financial world, people are making false assumptions based on stories they have heard. I met a nice young couple this past weekend at an open house whose friend recently purchased a home and had to jump through flaming hoop after flaming hoop in order to secure a loan. They needed 25% down, and in addition to that, their lender was requiring them to show six months of reserves in their checking account. With these guidelines, many people would be forced out of the home buying arena. While the story may be true for those particular people with their particular lender, it may not be true for you.

We have represented buyers in the recent past with anywhere from five to thirty five percent down. There is no steadfast rule when it comes to lending guidelines. Every situation is unique and is based on an equation made up of the lender, the buyer, and the property.

While it is true that the majority of lenders now require a larger down payment than they did a year ago, there are still options out there for those of you who do not have the ability to do ten or twenty percent down. One option is the FHA loan which now has the maximum loan amount of $729,750 and a required down payment of only 3%. Also, if it is a low FICO score that worries you, an FHA loan only requires a 580 or above. While the interest rates may be a bit higher, this may be a good option for you if you don't have a large down payment or a high credit score.

The moral of the story is that you need to talk to a lender yourself. Don't assume that because your friend, neighbor, or relative had trouble with financing that you will have the same experience. It is important to talk with a few different lenders and give them your specific information, as one may offer options that the other does not have.

This all brings us back to the importance of having a team. Your Realtor should have a few good referrals for lenders or mortgage brokers in their database. The connections that we make are not for profit, meaning we do not enjoy any financial gain from referring you to a particular lender. We do, however, work with people we trust and know that they have your best interests in mind.