By Eric Castongia, Zephyr Real Estate
The first quarter of 2014 has been a rocket ride. Since February 2012, we have seen activity and prices on the rise. In the fall of last year, we felt a little pause, then toward the end of the year, we had people buying property Christmas week. This year, even less inventory and more buyers, so prices have gone up even further; and we thought the market was already hot.
- At the close of the first quarter of 2014, we had four active, two pending (not yet closed) and 15 sold (closed) properties. Of the 15 sold, 13 received multiple offers and 13 sold over their asking price. They probably all would have except that one sold off market, so the buyers paid what the sellers asked and the other had a tenant, so it sold at asking.
- Five of the 15 (33%) reportedly sold for all cash.
- There were no ‘failed to sell’ listings this quarter; everything sold.
- You may remember that I said I felt a pause in the market last fall. That was completely erased and then some the first part of the year. Here’s where it may be the most visible. The amount of overbids in the first quarter ranged from a low of $105,000 to a whopping $405,000 over asking (which in that case was nearly 40% over the asking price). Compare that to the fourth quarter of 2013 which saw the range of bids from as little as $25,000 to as much as $251,000. Low inventory and tired buyers unite.
- A little notoriety; we had one short sale in the first quarter and it was a former marijuana grow house. Dare I say, it sold over asking.
- As you may know, my scientific method for establishing value is spreading sold properties across my dining room table. In that way, I can compare apples and apples and avoid median price, which I think is not too useful. The scientific method has determined that property values went up quarter to quarter and year over year.
- Last quarter, I noted that from the third quarter to the fourth, it looks like prices went down as much as three percent. This quarter it went up approximately ten percent (or more).
- Since last year at this time, we have gained approximately 20 percent.
- List prices are starting to move up too. Last year, we didn’t see much movement on that front, but it’s a new year and a new mentality, though we are still having to price properties attractively to get buyers to have a look.
- Note buyers are picky too. Even though they are willing to overbid, they won’t, if they feel there isn’t value.
- I have to believe that prices will level or change one of these days. When that will happen will be anyone’s guess. For the near term, we are still likely to see short supply and buyers staying the course trying to buy before interest rates and sales prices go up any further.
Eric Castongia, Residential Sales Specialist (CAL Bre No. 01188380) at Zephyr Real Estate provided the information in this article. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service and Eric’s observations in the marketplace. Eric can be reached by e-mail at Eric@SFHotBuy.com, or via mobile phone at (415)307-1700.