The hot real estate market in San Francisco has again brought the price per square foot of property to the forefront of buyers’ minds. I asked a group of clients to share their thoughts on buying a home or condo in San Francisco and how price per square foot affected their purchase.
Last month I reported on the answers to my first question: Did you consider price per square foot when you first started looking for a home or condominium? It turned out that some buyers did and some didn’t. The second question: When you bought your home or condo, was price per square foot a factor? The answer here also was mixed. The answer to my third question concerning where buyers laid their money on the table tells the tale.
Question 3: What was the most important factor in your choice of a home or condo: location, size, number of bedrooms, bathrooms, parking?
- Location has always been key for me in every house I have purchased. The one in San Francisco had room in front for our dog, which was the determining factor for us. Price per square foot gives us a level from which to figure out how much we can put in the house and still have a marketable property.
- Location, suitability for corporate rental, low HOA dues, condition. Parking will be a factor for the next property.
- Location has always been paramount to us. Parking became more important after living at the Francesca.
- Price per square foot is a very important factor to me. I looked at this when I first started looking for a home/condo, and this was also a factor for buying the condo.
- In the end, bang for our buck play-ed the biggest role. After that, location lost out to having a bigger, more comfortable house. The yard, with the dogs, also was ultimately more important than location.
The results of my loosely scientific survey of buyers’ priorities in San Francisco: Location (3 votes), dogs (2 votes), price per square foot (1 vote), and parking in the future (2 votes). This is a very small sampling of buyers. Still, I feel they fairly accurately represent a typical group of buyers; especially knowing there are more dogs than children in San Francisco, the dog vote is to be expected. Woof!
Buyers must also remember that price per square foot can be a moving target. When an agent enters a listing into the MLS, there are eight choices to explain how the price per square foot was determined: Per appraiser, per architect, per builder, condo map, per owner, per tax record, per graphic artist, and not available. I recently received an appraisal where the appraiser noted that public tax records are constantly incorrect in San Francisco. Appraisers may not be the last word, either. I have heard of three appraisers measuring the same property and coming up with three different figures for square footage. By now, you may be running screaming from the room, but I am not done yet.
As I reported last month, a client whose business is real estate development outside of San Francisco summed it up: In San Francisco, price per square foot is a bit of a wild card and difficult to compare. The averages are skewed by so many variables.
Today, considering the low inventory of homes and condos for sale, the challenge is just finding a home. Many other considerations have fallen by the wayside. When price per square foot comes up, I explain to my clients everything I have said here and then ask: Does the home/condo feel big enough? Do you want to live here? Can you afford this home/condo?
It is important to remember buying a home is more than an investment. This is where you will live.