The traditional real estate spring market is heating up — but not just in San Francisco proper. Daily Real Estate News recently reported that inventory is increasing just in time for the spring selling season. Winter is over, and sellers are beginning to spruce up their homes to put them on the market.
Increased inventory gives buyers more selection, and increased choice means increased sales. I’ve noticed a distinct increase in inventory over the last few weeks. New listings are appearing in my inbox daily. Sellers are encouraged by today’s higher prices, but these prices will likely level out as inventory increases. Because interest rates remain low, and selection is increasing, this is an excellent time for buyers to make a purchase.
When interest rates in-crease, some buyers will likely pull back from the market place. I have found over the years that buyers make their decisions based upon a particular monthly mortgage payment, and that the actual sale price of the home is almost secondary. As rates increase, however, then one of two things must happen: Either the buyers will need to tolerate a higher monthly payment, or the buyers will need to establish a new lower price point to stay close to the payment they are considering.
According to Realtor.com, 20 nationwide markets are already showing a big upswing in listing views and homes for sale. Several of these markets are in California, including Santa Rosa, Vallejo-Fairfield, Santa Maria-Santa Barbara, San Luis Obispo, San Diego-Carlsbad, and San Francisco-Oakland. I have seen a trend over the last couple of years, where younger buyers are attracted to the marketplace of Oakland and the nearby East Bay neighborhoods. There are many jobs in Emeryville, and Oakland has made a concerted effort to build a strong base of restaurants, entertainment, and transportation. As prices rise in San Francisco proper, many people look at some of the markets outside of the city to find more affordable housing.
At the same time, many San Francisco buyers are becoming more open to lesser-known neighborhoods in the part of town where they are looking to buy. This is an excellent way to stay in San Francisco and yet find a home closer to your price range. For example, if you are interested in Forest Hill, you can broaden your search a bit and consider Forest Hill Extension, Mt. Davidson Manor, Monterey Heights, Sunnyside, Midtown Terrace, or Sherwood Forest, just to name a few more affordable neighborhoods close by. For those who love Noe Valley, look at Glen Park.
Also, if you drive around the city, you will see many construction cranes. These are primarily for new condominium projects. Check with your real estate agent about seeing any in which you are interested; you can often buy new-construction condos with less competition than resale properties.
And finally, if you would like a certain area — for example, the Marina — but can’t afford to buy a single-family home there, consider buying a condominium or even a duplex with a friend. You could also buy that duplex and use the rental income from the other flat to help with your mortgage payment. That’s what my husband and I did when we bought our first San Francisco property. We were in our early 30s and could not afford a single-family home in Pacific Heights, so we bought a four-unit building and the extra rents made it affordable for us.
These are just a few suggestions to keep in mind as you conduct your spring real estate search. Be sure to talk over your options with your real estate agent.
Wishing you a happy spring!
