The West Portal Real Estate Market Update-Healthy and Strong
By Eric Castongia, Zephyr Real Estate
Its been an active and interesting year in the West Portal real estate market. No longer consistently everything in the marketplace getting snapped up for piles of money more than the asking price, we have seen values drop, level and continue to appreciate. Location, architecture and amenities are playing a larger part in appreciation and perceived value by buyers. Here is what I have determined in my analysis of data from the San Francisco Multiple Listing Service and my experience in the market:
- We’ve seen an increase in property values of between three and seven percent since the last quarter of 2004 on the majority of the market in West Portal and Inner Parkside. Taking into account, that the first six months of 2005 saw average appreciation of 12 percent, that means some property values went down during the last six months. The higher prices at the peak, which I think was June and July, can be attributed to overbids, multiple offers, and lack of inventory.
- The most typical, vintage homes in the West Portal/Inner Parkside in the million dollar range saw an average appreciation of 12-15 percent for 2005. I expect this rate to slow down in 2006.
- There were 38 transactions in the last quarter of 2005, while there were 21 in the last quarter of 2004. The market in West Portal is quite stable year over year, so this indicates property owners wanting to cash in on the ‘bubble’. This flooded the inventory and gave buyers more opportunities-generally creating smaller overbids and fewer offers.
- We are still seeing overbids and multiple offers in the most popular areas; the majority of homes in West Portal are still getting overbids.
- Its been a challenge to see a drop in the market because overbids are still occurring; they are smaller, so instead of a 20 percent overbid, there might be a five or 10 percent overbid depending on list price.
- Outlying areas are seeing more flatness in appreciation and in some cases, prices coming down. When the whole market is heated and there isn’t much inventory, these areas enjoy a rapid appreciation rate, but with increase in inventory comes more choice for buyers and hence, their ‘bubble’ has popped.
- Under pricing a property to generate activity is not the best approach to selling a home at this time. Some sellers in using this strategy have not received offers acceptable to them; the response has been to raise the prices to seller acceptable listing prices, or withdrawing the property from the market.
- Previous clients are contacting me to explore move-up opportunities. This indicates to me that people who have been in their homes for several years have a nice pile of equity that they can use in their next home; they see this as an opportunity to move up since appreciation has slowed.
- Interest rates have risen which is having some impact on a buyers purchasing power. Our in house mortgage broker feels that the interest rate increases will stop soon until the economy picks up.
- The slowing of our appreciation rate is healthy and I look forward to it. It means buyers can get into the market and if you want to move to another home, you may have that opportunity.
- With the scarcity of housing, improvements in the economy, desirability of San Francisco and the West Portal area in particular, I think we can continue to expect a healthy and reasonable appreciation rate.
Eric Castongia, Residential Sales Specialist at Zephyr Real Estate provided the information in this article. Eric can be reached by e-mail at Eric@EricSellSF.com, or via mobile phone at (415)307-1700.