IS AN OFF-MARKET DEAL RIGHT FOR YOU?
We’ve all heard the stories from recent years about homes selling within days or even hours of going on the market. That might sound like a seller’s dream. But there is another option — selling or buying a property off the market, without it even getting listed on a multiple listing service. It’s an option that could be attractive to some people, but it all has to do with the seller’s appetite for risk, according to Paragon Real Estate’s Alexander Mulder (bridgesf.com).
“Some people will say, ‘I know I will get a good offer,’ and someone makes them a good offer, ‘but I want to put it on the market,’ and that buyer walks away,” said Mulder. “Or sometimes that buyer comes back and sees it didn’t sell on the market and now says it’s not worth that much. It really depends on the risk tolerance of the seller. Some people are risk averse, some people like risk.”
An off-market sale makes the most sense if the sellers have a good idea of the market value of the property, or if they want a more rarified target buyer.
For a recent off-market sale Mulder made on a home on Chestnut Street, the seller had a unit that had not been updated, and he didn’t want to move out so it could be staged, but he had a pretty good idea of what his unit would fetch in a sale, so he chose to go with an off-market sale. His instincts were correct, and Mulder closed the deal for the amount the seller expected.
If you go off-market, your broker could choose to just share it with the top 1 percent of agents. “You reach out and call the brokers in the Marina,” said Mulder. “It doesn’t go out to everyone; there’s a good chance you’re going to get your offer from one of these people.”
Not only that, but if you’re not going to go to the expense and trouble of moving, updating your home, and staging it, do you really want photos of the subpar presentation living forever online? “If you put something on MLS, there’s a record of it,” said Mulder.
Obviously, it’s something sellers should discuss with their agent if they’re contemplating an off-market sale to see if it fits their situation.
97 PERCENT FAILURE RATE
With the Regional Housing Needs Allocation, the state of California sets the number of housing units (of all income levels) for each local community’s housing goals. They are evaluated for both market-rate and below-market-rate housing. On Feb. 1, the California Housing and Community Development issued its report about how cities have done meeting their RHNA targets. The result? Slightly more than 70 percent of cities and counties failed for both market-rate and BMR housing; an additional 27.5 percent met their goals for market-rate housing but not for BMR housing. Only 13 cities (2.4 percent of the total tracked in the state) met their goals for both categories of housing.
State senator and housing warrior Scott Wiener issued a statement saying, “When 97% of cities are failing to meet their housing goals, it’s clear we need to change how we approach housing in California.” He cited the passage of Senate Bill 35 this past year, which will require cities failing their RHNA goals to streamline the approval of any housing project that fits within zoning without any discretionary processes or appeals. “Starting today, we will see more housing approved more quickly all across our state, particularly affordable housing which is so badly needed in our communities.”
The 27.5 percent of the cities that only failed in the BMR category will only have to streamline their affordable housing, making projects that are at least 50 percent low-income units eligible for streamlining but not projects that are market-rate or with lower levels of affordability.
DATA DUMP
Some cities, such as San Francisco, are already known as being renter-majority towns. In the aftermath of the Great Recession, other cities moved from owner-majority to renter-majority cities. Overall, renters have become a bigger portion of the population than in previous years.
Between 2006 and 2016 — an era that included the popping of one of the worst housing bubbles in American history and a resulting foreclosure crisis — RentCafe reports that the U.S. population grew by about 23.7 million people; during that decade, the number of renters increased by 23 million and the number of homeowners grew by fewer than 700,000.
QUOTE UNQUOTE
In light of a Paragon Real Estate report that a household income of $303,000 is necessary to buy a median-priced home in San Francisco, Seattle Times real estate reporter Mike Rosenberg tweeted, “You’d need to avoid eating 33,600 avocado toasts a year to generate $303,000.”
