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Real Estate Investor

Up or down? Real estate in the age of Trump

Will san francisco real estate continue on its Sonderweg, its “special path” driven by its peculiar local factors? We checked with several local experts to get their views on the year ahead in real estate. Stephanie Saunders Ahlberg is an agent with Hill & Co.; Paul Barbagelata is the broker and owner of Barbagelata Real Estate; and Carole Isaacs is an agent with McGuire Real Estate.

WHAT IMPACT DO YOU THINK THE ELECTION OF DONALD TRUMP WILL HAVE ON LOCAL REAL ESTATE?

CAROLE ISAACS: I don’t expect Trump becoming president will have any effect in San Francisco real estate. Our economy is driven by technology, and this is where young people want to live as well as retiring Baby Boomers moving from the suburbs.

STEPHANIE SAUNDERS AHLBERG: It might be hard to say with regard to local real estate specifically, but in general, Donald Trump is real-estate-friendly. We know he considers himself a developer and, therefore, likes real estate. It was predicted, even before the election, that interest rates were due to start rising somewhat, but I suspect he will do what he can to keep them as low as possible. I also have heard that he is inclined to keep the real estate tax write-offs, including the mortgage interest write-off, so that should have a positive effect on the real estate market overall.

I think we are all waiting to see. One local impact may be how foreign buyers are treated. We have many buyers here from Asia, and if that is discouraged it could have a negative impact locally.

PAUL BARBAGELATA: I could see many buyers apprehensive on jumping into the real estate pool if there is economic uncertainty. Interest rate hikes could also have an effect on the first-time buyer segment as well. The flip side is a productive stock market that rallies with some continuity may boost consumer confidence. A strong stock market goes hand-in-hand with a strong real estate market.

REGARDING HOUSE PRICES IN SAN FRANCISCO, HOW DO YOU THINK 2017 WILL DIFFER FROM 2016?

AHLBERG: I expect housing prices will continue to go up in 2017, but not at the level we have seen for the past couple of years. The higher-end market is seeing more of a slowdown, but entry-level and up to about $5 million remains strong.

ISAACS: At one point I said: “Keep your mouth permanently open as far as the rise in home prices goes.” For single-family homes, this still may be the case as prices keep inching up. Condo prices are looking more stable with all of the new construction inventory. At the same time, developers are not social workers. They are in the business of making money and will do their best to keep new condo prices up.

BARBAGELATA: In 2016 we already experienced a correction of values for certain segments of the market. In my opinion, many neighborhoods known for their luxury price points have plateaued. The west side of the city is still posting record numbers for the first time, therefore there is additional room to grow.

REGARDING HOUSING INVENTORY IN SAN FRANCISCO, HOW DO YOU THINK 2017 WILL DIFFER?

BARBAGELATA: I think inventory will rise in the condominium segment mostly in the newly constructed buildings within the last 10 years. That particular demographic is ripe for transition (socially and economically) into single-family homes in the Bay Area. I do not see a vast change with the single-family homes relating to inventory.

AHLBERG: The prediction is that inventory will remain low in 2017. The catch-22 is that with low inventory, people thinking of selling hold off because they cannot find something they would like to buy.

ISAACS: The single-family market will remain tight. Older people are not retiring and moving elsewhere. In general, homeowners are staying put unless there is a major change in their lives.

WHAT NEIGHBORHOOD DO YOU THINK WILL BE THE MOST POPULAR IN SAN FRANCISCO IN 2017?

AHLBERG: The more traditional buyer still gravitates to the more traditionally established neighborhoods of Pacific Heights, Marina, Cow Hollow, Presidio Heights, and Russian Hill. But younger buyers like the more southern-side neighborhoods because many of them commute to the peninsula. We have seen a real boom from Hayes Valley through Bernal Heights and neighborhoods in between.

ISAACS: The Mission is hot for new arrivals and people under 30. Young families looking for single-family homes are flocking to the Richmond and Sunset. Buyers with more money still want Noe Valley.

BARBAGELATA: The majority of San Francisco neighborhoods are very popular, however, I think the Dogpatch area has so much to offer with the redevelopment of old industrial space, the Warriors arena coming in, great food scene with a mix of restaurants, microbreweries and wine bars, and overall a great merchant community.

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