By Eric Castongia, Zephyr Real Estate
We’ve had an aggressive start this year in home sales prices. Since the last several weeks of 2006 and throughout the first quarter of 2007, we’re seeing over asking and multiple purchase offers on desirable and well-located properties. There are three reasons for this: 1) there are many buyers looking at the few properties that are available; 2) there is pent up demand, some buyers didn’t buy last year and are realizing that real estate in San Francisco does not operate the same way as the rest of the country; and 3) agents are using comparable sales data from the fall and winter, causing some low list prices, as they are not accurately representing what buyers are willing to pay. The following analysis combines data from the San Francisco Multiple Listing Service and what I’m seeing in the market. This is my best attempt at making sense of where real estate values are in the West Portal area.
- At the end of last year property values were stable; although they fluctuated throughout the year.
- We saw a flurry of activity in the last several weeks of the year and it is still continuing throughout the first quarter. Desirable and well-located properties are getting this attention-others are selling at or below their asking prices.
- I reported in January, that the number of sales were down from 18 properties in the fourth quarter of 2005 to seven properties in the fourth quarter of 2006.
- Comparing the number of sales between the first quarters of 2006 and 2007 are 16 and six respectively.
- The number of sales between the fourth quarter of 2005 and the first quarter of 2006 were nearly even at 18 and 16 respectively.
- The number of sales between the fourth quarter of 2006 to the first quarter of 2007 were nearly even at seven and six respectively.
- It’s a common presumption that more listings will come on the market in the Spring than in the Winter. The above suggests that activity between contiguous quarters may have a stronger correlation than previously thought.
- Although the number of transactions and available property is down from the first quarter of 2006, the number of sales are more in line with what is expected at this time of year.
- Of the six first quarter 2007 sales, three were sold for over the asking price, one sold at and two sold under.
- Coming up with over all appreciation is a moving target, as each home and location is just a little different; representative properties of each type don’t come up each quarter.
- On the very few properties on the market and my interpolation, I figure an approximate rate of appreciation of two percent between the fourth quarter of 2006 and the first quarter of 2007. From the first quarter of 2006 to 2007, I figure an approximate appreciation rate of five percent.
- I do think the market will continue on its up trend at a respectable level this year.
- It’s still crucial to price a property based on its location and desirability; to incorrectly price is to risk disappointment in your home sale.
- Supply and demand is hard at work maintaining and increasing your property values.
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.