Second Quarter 2017 Market Update
By Eric Castongia, Zephyr Real Estate
2017 started a little slower than expected. Historically, we start seeing buyers come back into the marketplace after the holidays, around February. This year, we started seeing the first of the year bump around the end of March and it’s been going strong since.
For West Portal/Inner Parkside we saw:
- In the first quarter of 2017, there were 10 sold properties, with eight receiving multiple offers and seven over asking. The other three offers were at and below asking. The amount of overbids ranged from as little as $80,000 to as much as $555,000-tied by two different sales.
- In the second quarter of 2017, there were 19 sold properties, with 16 receiving multiple offers; all 19 offers sold over asking. The amount of over bids ranged from as little as $101,000 to as much as $630,000.
- In most cases, list prices have come down to get these huge overbids, largely to get numbers of people in the door; the more people that see it the better. Warning to sellers though, buyers are savvy to market value and prices; they’ll only play if they can see a bargain; if you start too high on list price, you’ll be all alone on offer day.
- Last year, I noted that less than perfect properties in the marketplace were not getting snapped up for big bucks with multiple offers, that’s changed. Because of limited inventory, some buyers are being more flexible, accepting challenged properties and paying more for them.
- As for sales reported as all cash (no loan); there was one (10%) reported in the first quarter and five in the second (26%), clearly indicating more aggressive bidding in the second quarter.
- Interestingly, despite big overbids in the first quarter, prices actually went down as much as 11 percent from the end of 2016. For the last few years, we have seen a tapering off of the number of bids, and the amount of traffic in open houses about mid year. Summer vacations likely have something to do with that, but I think the bigger issue is buyer fatigue. There are only so many times you can write an offer, get beat and then get up again for more. Buyers, from July through the end of the year may be a good time for you to stay in the game.
- The second quarter was more aggressive; all that was lost in the past six months came back. Comparing year-to-year values, we were back up between seven and 20 percent. The large range correlates to differing property types; the typical Sunset style homes with two bedrooms up and a room and bath down behind the garage saw the greatest appreciation-they are generally the most available and affordable to price sensitive buyers.
- I like to watch for ‘apples’, or properties that have sold recently and are now being resold. When that occurs for a job or relocation change-it is a good barometer for market changes. The most recent ones have all been fixer properties that have been remodeled and then flipped. They are fun to watch, but in this case, it doesn’t give us an idea as to market condition.
- Is a market change coming? Yes, but not yet. There is still a lot of money and interest rates are low. Even when that does happen, the prime hub of West Portal Inner Parkside will continue to be popular with a smaller correction, while areas with less desirable locations, will see larger changes.
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.