“Be fearful when others are greedy and greedy when others are fearful.”
-Warren Buffett
The Oracle of Omaha could be talking about the San Francisco real estate market. We all know that smart investors love to buy low and sell high, but the best time to identify those opportunities is in times of uncertainty, when the herd is stalled or stampeding in the other direction.
After a record-breaking autumn, the competition remains strong for Single Family Homes in the city overall and it’s especially fierce for properties in move-in condition. A total of 250 homes sold in San Francisco in November, with a median sales price of $1,700,000 and an average 17 days on market. Overbidding and multiple offers are the norm in certain hot neighborhoods, such as the Sunset and Parkside Districts.
It’s a different story for condominiums, with 290 sales in November and 1,184 unsold condos on the last day of the month, with an average 48 Days on Market. That’s only an average, with some condos taking months to sell. The consensus among our fellow agents is that most buyers are on the sidelines and they are bracing for a slow holiday season.
However, my team has been noticing renewed interest from some, not all, of our condo buyers. These optimistic buyers tend to see beyond the bleak news cycle and we especially love lavishing our attention on them. They cite the following reasons for buying now:
- The robust stock market has provided solid gains in wealth, especially in the technology sector.
- With some condos languishing on the market, buyers can negotiate from a position of strength.
- Some sellers are lowering their expectations as the end of the year approaches.
- Other sellers are disappointed and are taking their properties off the market during the holiday season. This helps us identify the truly motivated sellers!
- Interest rates are at historic lows.
- Buyers feel that they have more time to perform their own due diligence on the property. It is not the kiss of death to write an offer with a contingency.
- Proposed COVID-19 vaccines raise our hopes that businesses will open again.
- The likelihood of a new round of government stimulus efforts will bolster the economy.
Some of you may remember the real estate market in 2010. Sales were slow back then, but the confident buyers who purchased have reaped huge returns, sometimes doubling or tripling their investment.
When others are not buying, that may be the very BEST time to buy. Most people do not follow this principle. Many people believe that a better time will be coming in the future and they miss the clues that an astute investor or agent can see now. Timing the markets at their exact peaks or valleys is impossible, but you don’t have to hit those peaks to make impressive positive returns.
Wishing you peace and prosperity this holiday season. We are here in San Francisco and at your service.
Warmly,
John
