White hot San Francisco real Estate market should make sellers reconsider. . .
The stats aren’t out yet, but Q1 of 2015 may reflect an historic shortage of supply relative to demand. Even off-market deals where only a fraction of the market is even aware of a property’s availability are getting multiple offers. This is of course, driving prices up right now and creating a great deal of frustration among buyers.
If you have deferred selling or had trouble making up your mind. you may be missing the perfect opportunity to make your move depending on your long-term plans.
Here are a potpourri of considerations for those who are trying to make up their mind about selling:
A shortage of inventory creates a rising market that can “cover all flaws” right now. If you have a challenged property (no parking, difficult floor plan, tough block, tenant issues) this may be your moment to overcome a normal market’s objections. Good agents also love problem-solving, so if you know one, don’t hesitate to call them if you want to talk about your real estate “problem child.”
Opportunities are wider for sellers of tenant-occupied properties. Tired of waiting for your tenants to move so you can sell at a higher price? Now may be your moment to take advantage of a white hot market, if you want to trade your equity into another property with better rents.
Your property is worth more vacant than tenant occupied. If on the other hand, you have a vacant property, please think twice (or even three times) before renting it out again, especially if your short game is to sell in the next few years. Buyers appreciate properties where they can move in right away and investors appreciate the flexibility a vacant unit provides. Vacant properties are also far easier to show and can be more easily exposed to a broader market.
If you own a rental that used to be your primary residence, consider your Capital Gains Exclusion deadlines. The IRS Capital Gains Exclusion is probably the greatest tax savings you will ever know. It can literally cost you upwards of $100,000 if you wait too long after you move out to sell. Check with your accountant for details, but if you are running up against your three-year deadline, it is time for a sit-down with your tax professional or financial planner to talk about the next right move.