By Eric Castongia, Zephyr Real Estate
If the last year has taught me anything, it’s that you cannot predict what will happen in the future. As for property values in our neighborhood, the good news is that West Portal/Inner Parkside has held its own. We saw a significant drop in the number of sales for the year; down 31 percent from the previous year. That ultimately worked to sellers’ advantage; with supply down, prices stayed up.
Throughout San Francisco, the story is much the same. Desirable, well-priced property in great locations, are highly sought after, with multiple offers and over bids still occurring. Properties that rode the wave of appreciation, being compared to homes that were not comparable, did go down in value; location, condition and vintage being the most important criteria in buyers’ decisions. Lucky for us, we do not have a glut of new housing units on the market in competition with resale properties.
The sub prime mortgage crisis has had its affect on the market, mainly for first time buyers with less than 20 percent down and credit scores below 700. This has left entry-level properties longer on the market, or not selling at all. Buyers with hefty down payments, good credit scores and the ability to get fully documented loans are scrambling for the few good properties on the market and are not shy to pay a premium for them.
The following is an interpolation of data from the San Francisco Multiple Listing Service and my analysis of the real estate market in the West Portal/Inner Parkside area.
- The total number of sales for 2007 in West Portal/Inner Parkside was 37; down significantly from 54 in 2006.
- The number of sales in the fourth quarter of 2007 was eight, very slightly up from the fourth quarter of 2006 at seven.
- Of the eight fourth quarter 2007 sales, 6 sold for over the asking price (75%), two sold under. My opinion is that the listing prices of these six homes were competitively priced in order to get traffic into the property.
- In comparing with sales in the fourth quarter 2006, seven of the five sold for over the asking price (71%), two sold under. Given the statistics of 2007, this suggests to me a level of consistency in our market.
- Listing price, condition, location and desirability of a property being sold, is crucial. These factors determine if a property will sell for over its asking price, or linger on the market. In all cases, the list price needs to reflect property and market conditions.
- The number of withdrawn properties has gone down from 2006 to 2007. This would indicate that sellers are starting to list their properties more in line with market conditions, or not putting their properties on the market at all; concerned that they may not get the price they desire.
- For the year, appreciation was flat to up +/-eight percent in 2007. The properties that saw the most appreciation were typical West Portal Area homes with rooms and baths down, in good locations and remodeled. Families are still driving our marketplace.
- The Federal Reserve has reduced interest rates, but the effect of these reductions have not trickling down to the consumer yet.
- At the beginning of 2007, I anticipated a built up in demand from people who didn’t buy in 2006 buying in 2007. We did see more activity at the beginning of the year up until mid-August; the beginning of the sub-prime mortgage crisis.
- I’ve said it before, and I’ll say it again, I think we’ll look back and see that this was a good time to buy real estate-I expect that there will still be opportunity in 2008.
- If you are going to buy, select well; if you are going to sell, prepare your home for sale to make it desirable and price it correctly.
Eric Castongia, Residential Sales Specialist at Zephyr Real Estate provided the information in this article. Eric can be reached by e-mail at Eric@EricsSFHomes.com, or via mobile phone at (415)307-1700.