Fourth Quarter, 2008
Always committed to discussing the City’s real estate market in unvarnished terms, we now share with you our fourth quarter San Francisco assessment. Clearly macro economic events have had an impact on our wonderful city and its high end properties.
It is finally, after so many years, a buyers’ market. This is, in balance, a good thing. As a result, we are finding that prices in San Francisco’s best neighborhoods are down about 5% to 7% when compared to the first half of the year. Inventory has increased modestly in those same neighborhoods, finally providing buyers with more choice. The softening of prices is creating a buying opportunity for those who are poised and prepared to act.
Today’s market is good for first time buyers, who are faced with rapidly escalating rents. It is good for move-up buyers, who may need to “sell low” but will also be able to “buy low” — and their new, higher end property will appreciate faster when the market improves. Speculative developers are rethinking their appetite for new projects in the short term, finally allowing families to readily purchase properties that need rehabbing with the intent to improve and live in them for many years.
As for the myth that it is extremely difficult to obtain a mortgage today, we are simply not finding that to be the case. Buyers with 20% down and a credit score of at least 720 are having no difficulty getting a mortgage. Our TIC and cooperative apartment buyers, as well as the mainstream home and condo buyers, are readily lining up their financing.Schumacher Properties is continuing to list and successfully sell properties in every category in desirable neighborhoods.
As Sotheby’s International Realty’s CEO, Kathy Korte, wrote recently, “Sellers need to be realistic and strategic in their pricing, and their properties need to be the best priced properties in their class in order to achieve an expedient and successful sale.” This is true now more than ever.
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