The real estate market started off like a shot at the beginning of 2019, like it has done for the last several years, and then beginning in June, we feel what seems to be a less frenetic market. Ultimately a perception, I think, as buyers start taking vacations and the number of offers starts to go down. Here’s the third quarter history for West Portal/Inner Parkside:
- At the end of the third quarter, there was one active, seven pending, eight sold and two failed to sell properties (one failed to sell came back on and is now pending); seven of the sold properties received multiple offers and all seven sold over asking. The amount of overbids ranged from as little as $286,000 to as much as $680,000 (not typos). Contrast this with third quarter 2018 with five active, no pending, 14 sold and no failed to sell properties; 12 had multiple offers and 13 sold over their asking price. Overbids ranging from $21,000 to $555,000 (again, no typos).
- There was one reported all cash (no loan) sales this quarter; buyers are getting financing, but they are not putting that in as a contingency in the most aggressive of offers.
- The truly remarkable and notable properties are still in high demand; the ones that aren’t ‘perfect’ are not selling for as much as they once were.
- We are seeing many more ‘off-market’ listings and those listed with ‘transparent pricing.’ Generally, that translates into higher prices than the market will bear, as some sellers won’t sell unless they get their certain price.
- Comparing the number of sold properties at this time for the last several years, this year is definitely on the lower side of expectation for available inventory. Given the reduced inventory and the size of the overbids, offers are getting more aggressive, including no contingencies with buyers taking a chance so that they can be done with the buying process. The majority of buyers who have been at this a while are realizing that this is not a buyers market.
- I am seeing a softening of the market for condominiums in larger buildings, which is not the inventory of West Portal/Inner Parkside. In those instances, we are seeing some price reductions and withdrawl from the market. Seeing those changes could be giving a false impression that the entire market is experiencing similar doldrums.
- Property values stayed basically the same from the second quarter to the third.
- Comparing the third quarter of 2018 and 2019, I saw a few interesting things. Values did appear to be down year to year 10 to 15 percent on both typical two bed one baths, and those with rooms down. Conversely, North of Ulloa saw an increase of 10 to 14 percent in the same quarters. My current explanation is that North of Ulloa is catching up to the rest of West Portal, and soon, we won’t need to distinguish. Numbers are tricky things, so take them with a grain of salt. Value depends on what is in the marketplace at that particular moment: 1) what is the competition and 2) who are the buyers in the marketplace.
- A recession is bound to happen in the next few years. We’ve been on a steep up curve for a while and even tech incomes will have to feel a bit of a strain at some point. Since we don’t know when, for how much and for how long, the best bet is buy something you can afford to carry and be happy when you find something you can call home.
Eric Castongia, Broker Associate at Zephyr Real Estate (BRE Lic. No. 01188380) provided this information. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service, the County Tax Record, the internet 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.
