The skyline of San Francisco seems to change daily as new residential buildings near completion. So many new units are coming onto the market that one has to ask the question: Is it time to sell and move my home or investment to greener pastures before the market is overloaded with condos?
Here are my thoughts and observations.
This is certainly the golden age of real estate for sellers. A seller who is putting his condo on the market said to me, “We don’t want to be greedy, but we have seen how high prices have gone and we would like to reap the rewards of our investment, too.”
This is a great time to sell for older people who have lived in their homes for years and have deferred maintenance. In a buyer’s market, it may take some time to sell a less-than move-in-ready home. Today these homes are in great demand and will sell at premium prices that were only in homeowners’ dreams a few years ago.
It has been reported that requests for building permits have slowed a bit. To me this means that investors feel there is a limit to how much and for how long the city will continue to grow and need new housing. At the moment there are more than 40 buildings under construction in San Francisco. Multiple-unit projects take years to plan and develop, and the slowdown in permits will not have an immediate effect on the market in San Francisco.
A year ago I went on a vacation in February. When I left, it was a buyers’ market and when I returned a few weeks later the market had changed to an unbelievably hot sellers’ market that left everyone shaking their heads and asking, “How did this happen so quickly?” Exactly what caused the shift is not important here. The point is that it happened with lightening speed and it is impossible to time the market.
Driving across town around 6 p.m. recently, I felt like the city had been invaded by fleets of corporate shuttle buses. Zigzagging from the Marina to the Mission trying desperately to avoid the gridlocked traffic, I spotted corporate buses traveling in all directions on the main streets as well as many side streets. There is no question in my mind that the number of shuttle buses has gradually increased in the past year. I couldn’t help but wonder where all these people lived and how many more people would be moving to San Francisco in the next few years.
Some new buyers in the market for a condo are beginning to ask if there will be an opportunity to buy a new condo in their price range in the next few months or year. They feel prices have gotten so high and the competition so stiff that it may be a good time to sit back and wait to see what the new construction coming on the market looks like. Given the number of multiple offers that are made on the few condos currently for sale, obviously these people are in the minority, but they do exist.
If you are a property owner today in San Francisco, you are probably receiving mail from both real estate agents and private buyers asking if you are interested in selling your home. You are not alone if when you receive these inquiries you ask yourself, “Why should I sell now and give away the next few years’ profit?”
Sellers are asking themselves this question daily as they weigh their options and think about what they may do with their lives and the profit from the sale of their home. By all accounts, the most modest projections are that the price of real estate will continue to go up about 5 percent a year for the foreseeable future.
Still, one might ask: Is now the time to sell my condo? Idle daydreams are not enough to make a decision.
Since you cannot take your home back once you sell it, here are three steps sellers must take before making a decision on whether to sell their home:
- Ask a real estate agent for a market analysis of your home.
- Talk to an accountant or tax attorney about the tax consequences of selling your home or income property.
- Today it is more important than ever to know where you are going to move. Find a new home or at least have a plan for your move or have a plan for your money.
Tossing everything I hear, read, and experience firsthand around in my head, I feel there are many good reasons to sell now when the market has gone up so much in the past year or so. However, each seller must make a personal decision as to whether this is the best time to sell and not just follow the sheep in one direction or another.