By Eric Castongia, Zephyr Real Estate
The real estate market throughout San Francisco is continuing to find itself. We are seeing some properties selling quickly with multiple offers over asking, while others are stagnant with price reduction after price reduction.
Establishing value for a property has become much more dependent on floor plan, condition and buyer perceived flaws than it ever has been before. For instance, a home on a busy street matching a buyers’ criteria may sell more quickly and for more, than a home in a better location that does not fit every buyers’ wishlist, which makes valuing property more an art than a science.
To further complicate the situation, low inventory has been creating an issue in appraising property. That becomes a real challenge when there aren’t three properties comparable to what you are trying to value that have sold in the last 90 days. Such a problem could further lower the value of a property if the appraiser has to use whatever is available to compare.
- For the third quarter of 2011, we had 13 active, five pending (not yet closed), 15 sold (closed) and four ‘failed to sell’ listings. Comparing previous quarters, we had 14 sold properties in the second quarter of this year, and 13 in the third quarter of last year.
- Of the 15 sold properties, nine received multiple offers and seven of them sold over their asking price. The amount of over bids ranged from as little as $1,000 to as much as $66,000. The properties were psychologically priced for the market, which created a call to action on the part of the buyer.
- Three of the 15 sold properties were bank owned (foreclosures). There are currently no short sales-either active or sold.
- Five of the 15 sold properties had price reductions, then received offers. Of those, four sold under asking, 1 sold at the new asking price.
- Time is very important now; getting a listing to sell at or above asking must sell in the first few weeks. Properties that sold below their asking price, saw reductions up to 10 percent. Six of the 15 sold properties took more than 60 days to close from marketing to closing.
- 5 of the 13 properties currently active in the market place have been on the market for over 60 days.
- I took a deeper look at the history of each sold property this quarter. One listing, purchased in 2009 and sold this quarter, actually sold for more in 2011, receiving multiple offers. Considering the flat values we’ve seen over the past few years, this is an anomaly. Three other properties, with most recent closing dates ranging from 2003 to 2008, all sold for less than they did in their previous sale date. One such property, a foreclosure, sold for $850,000, while in 2004, it sold for $1,150,000.
- Property values in the neighborhood have stayed relatively consistent for the last few quarters, fluctuating within five percent of a baseline. Prices on less desirable properties; those with flaws, have come down more in relative value. I see this trend continuing for the foreseeable future.
Eric Castongia, Residential Sales Specialist at Zephyr Real Estate provided the information in this article. The content provided is an interpretation of data from the San Francisco Association of Realtors Multiple Listing Service and Eric’s observations in the marketplace. Eric can be reached by e-mail at Eric@SFHotBuy.com, via web at www.SFHotBuy.com, or via mobile phone at (415)307-1700.