June 2015 market report: sellers rejoice, buyers remain challenged
Paragon has just released its June 2015 San Francisco Real Estate Report, which finds that sellers are still happy and buyers are still struggling in a competitive market. Home prices are spiking and overbidding is fierce, so put on your flak jacket and read on.
We’re seeing rapid price increases in the city as well as an increase in high-end home sales, with many notable shifts taking place between older high-prestige ‘hoods such as Pacific Heights and Russian Hill and areas such as Noe Valley and South Beach, the latter of which are seeing surging sales of very expensive homes. This shift is partially being fueled by an explosion of younger, high-tech wealth in addition to the recent construction boom of high-rise, ultra-luxury condo buildings south of Market Street.
Flash back to four years ago and you would find most homes for sale in the $600,000-$750,000 price segment. Nostalgia is nice, isn’t it? These days the sweet spot is closer to $1 million through $1.5 million. And check this out: in May, nearly 93 percent (yes, you read that correctly) of home sales went without any price reductions. That’s pretty darn high, folks.
Two major factors are extremely low interest rates as well as surging well-paid employment. According to San Francisco chief economist Ted Egan, high-tech jobs alone went up by 18 percent in the 12 months through March 2015. As of April, the city’s unemployment rate – at 3.4 percent – was the lowest since the height of the dot-com boom.
In terms of interest rates, we’re seeing figures nearly 40 percent below those in 2006 and 2007. You’re going to want to watch these figures in the coming months and years. With recent inching-up of rates – they just hit 4 percent for the first time this year – things may be a-changing.
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 firstname.lastname@example.org. www.ceceblase.com