The Market is Hot Again

In Blog

The Market is Hot Again – Really!

SFRealEstateBuzz

Hello My Favorite People!

In This Buzz:

When Grocery Games Become Hunger Games

The Hills and Valleys of Rates and Real Estate

The Market’s Sudden U-Turn

Gimme some Love! (And some Likes. . . )

Inflation sucked last year. Groceries were the worst. My last Instacart order included Grape Nuts ($8.50), a bag of Peets ($23) and a $6 can of soup. Fresh vegetables were not as bad, but $1.29 for one red onion is still pretty steep.*

To tamper rising prices, the Fed kicked in a series of interest rate hikes last year. Do not ask my how these things are specifically related. But it seemed to work and now inflation is at about 3%. This delights the pundits, but leaves me with little joy as my can of Amy’s Tomato Bisque will remain a stunning $6.00.

In the meantime as food got more expensive, real estate got cheaper- because of the rising rates. As Buyers dropped out of the market due to affordability, prices slid from their dramatic spring peak before leveling out at the end of the year with a median price roughly the same as it was in January.

SINGLE FAMILY HOME MEDIAN PRICE IN

SAN FRANCISCO

Each point represent three months of activity.

CONDO MEDIAN PRICE IN

SAN FRANCISCO

Each point represents three months of activity.

In the meantime rates crested in late October at around 8.25% then ratcheted down.

30-YEAR JUMBO RATES IN 2023

Today a jumbo 30-year sits below 7% and 10-year fixed adjustables can drop below 6%. Many buyers are opting for the second choice and betting on being able to refinance once rates get down to where they were before (assuming that happens).

The lower rates drew Buyers back into the market beginning in November. Now the problem became finding them something to buy. Inventory always shrinks during the holidays- a problem compounded this year by many Sellers choosing to sit tight through the Summer and Fall because of the softening market.

This left us with few “good homes” to sell. Instead, the best some buyers could hope for was a stale listing with a Seller ready to take a steep discount or maybe buy a home missing some of the essentials, like toilets.

NUMBER OF HOMES FOR SALE EACH MONTH CITYWIDE

Condos and Houses

The Inventory Squeeze

In December there were 591 homes for sale in all of San Francisco. 155 were houses. The rest were condos and TICs. (The 2023 market for 2-4U and Income Properties would be a whole separate discussion, as the Buyer pool radically differs for these kinds of properties.)

But the New Year has brought on new inventory to meet the pent-up demand . There’s only a trickle of new listings right now, but on Tuesday Tour this week I previewed a lovely Victorian condo flat in Buena Vista Heights (listed for $1.5M) that has 20 disclosure packages out, while a two-unit fixer building around the corner on Duboce (listed for $1.75M- both units vacant) took multiple offers this week.

This surge in activity makes it an excellent moment for Sellers. The data is only anecdotal so far, but my crystal ball is telling me that by the end of next month, the media will be blaring reports about the return of a Seller’s market.

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If You Love Me, Will You Like Me?

One of my goals this year is to build my Facebook and Instagram following. I pride my feeds on being engaging and funny with videos and stories topped off with zany design tips. You may also get a sightings of my sidekick “Skelly” (who has a fan base of his own) and my penchant for cow rugs. Please log on and be entertained!

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“Home is not where you have to go but where you want to go; nor is it a place where you are sullenly admitted, but rather where you are welcomed – by the people, the walls, the tiles on the floor, the followers beside the door, the play of life, the very grass.”

― Scott Russell Sanders

A good home is the place where you can breathe a sigh of relief when you walk in the door at the end of the day. If you are looking for your just-right place in the world, please call/text/email me. I’d love to help you find it.

*PS: If my groceries seem expensive, it’s because I shop local and independent.