Continuing our analysis of Paragon’s March market report
When last we met, we were looking at the findings of Paragon’s March 2015 market report: “San Francisco Real Estate: Here We Go Again?” Let’s continue this breakdown of what we’ve found to be current market conditions.
Right now we’re looking at deep seller’s-market territory in San Francisco. This is bolstered by the fact that the national average days-on-market is more than twice that of the city’s (about 69 days versus 30) with the national months’ supply of inventory nearly three times higher than the city’s (about 4.7 MSI versus 1.6). We’re seeing many new listings in the city in contract within one to two weeks of coming on market, often with competitive bidding wars.
So what to do if you’re moving to or near San Francisco? We find that you essentially have a pair of choices: either rent at market rate or buy at market rate. Keep in mind that rents have increased so drastically on a local basis that after you factor in multiple tax benefits, low interest rates, principal loan-balance paydown leading to home equity and estimated long-term appreciation, buying can seem a little more attractive. Of course, this is an extremely personal decision. Do your own calculations here.
Remember that the market is not a single monolith with no variance. Take into account the Case-Shiller index, which splits markets into three different tiers. Market fluctuations affect each in different ways – for example, the current “high-price” tier starts at $872,000. Back in February 2012, that amount was $537,000. Most Bay Area counties find themselves dominated by homes in two price tiers, either low and mid or mid and high. That said, there are pockets of homes in all tiers within most counties.
Want more personalized advice? Give me a call.
Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com