Just when I thought I was going to write about how to take advantage of the late-summer real estate market in San Francisco, the United Kingdom voted to leave the European Union. There is never a dull moment in our international real estate market. Recently, we were concerned about layoffs in China, but now that is trumped by the U.K. voting to leave the E.U. This is an event with worldwide consequences, but in San Francisco, it is of particular interest to home buyers and sellers. San Francisco real estate sales often involve people who live outside of this country. In fact San Francisco — along with New York and London — is one of the most popular locations for foreigners to buy a home.
I happened to have a bird’s-eye view of the vote, because I was visiting my daughter, her new baby, and her Dutch husband in Liverpool at the time of the vote. My daughter, who grew up in San Francisco, is very much an example of the new normal, in which young people move across the world for the best job and adventure.
The consensus there is that it may be several years and many political moves and counter moves before England actually leaves the EU. There have been immediate repercussions with currencies and stock markets fluctuating wildly. The question here is: Will England leaving the EU make any real difference in your life and your plan to buy a home?
In my life, real estate never sleeps, and I found while I was on vacation it seems to be the same for many people. A few days before the Brexit vote, I had a buyer have his offer countered by the seller, who was in the Philippines. At the time my buyer, who lives in San Francisco, was in New York City; the seller’s agent was in the East Bay; and I was in Liverpool. My client, who works in finance, became anxious about accepting a counteroffer the day after the UK’s Brexit vote, because NASDAQ had dropped that day. What if it continued to go down in the next week?
He had been looking for a home for more than a year and had found an almost perfect condo within walking distance to his office at a price he felt was fair. He decided to accept the seller’s counteroffer, because his offer included a contractor’s inspection as a contingency. He felt this would give him the psychological cushion he needed for the next week plus the potential for further negotiations if the stock market continued to go down.
August is one of the slowest months in San Francisco real estate, and last month inventory continued to be extremely low. The good news is interest rates are low, too. Unless you are facing the possibility of a job loss or job relocation or all of your savings are tied up in the stock market, this actually might be an excellent time to buy a home. Some buyers will be in “wait and see” mode, letting their anxiety get the upper hand. While these buyers are waiting, there might be an opportunity to make an offer that does not become part of a multiple offer situation. This is especially true if you are looking for a condominium, because the condo market has softened a bit.
When you set out to buy a home, there are so many choices and things to be afraid of. There is no perfect solution and no sure way to time the market. It is always important to keep in mind that “almost perfect” has many benefits. The uncertainty in the real estate market could be short-lived because international buyers will rethink their investments in the U.K. and Europe. New York and San Francisco could be logical cities to move their money.
Once you become a homeowner, there will be no more Sunday open houses to plan your weekend around. You will be free to go on a bike ride, a picnic, or a hike on the weekend, or just lounge around your home with friends having an afternoon barbecue. You can adopt that dog or cat you always wanted but couldn’t have in an apartment. You can stop worrying if now is a good time to buy a home.
I hope you will allow yourself the pleasure of being a homeowner and not spend time worrying if the value of your home will go down if there is volatility in the housing market. Remind yourself that no matter what political changes are taking place around the world, you still need a place to live.