By Eric Castongia, Zephyr Real Estate
Around the middle of February, buyers came out into the marketplace in full force; combine that with a low inventory and suddenly, the majority of properties on the market started selling quickly with multiple offers-even the ones that had been languishing. Within a matter of a few weeks, a significant change in the market had occurred.
Not surprisingly, we are seeing an overall increase of property values so far in 2012. Buyers are feeling confident that we are at the bottom of the market and they are now being moved to take advantage of low interest rates.
- At the close of the first quarter of 2012, we had no active listings; this is extraordinarily unusual-highlighting the problem we are having with a shortage of inventory.
- For the quarter, we had eight sold listings, keeping in line with the expected sales numbers for this time of year. Even though sales are as expected, the difference is that in a normal quarter, there would be active listings to carry over into the following quarter. There are none, so, for the time being, it seems inventory will remain low.
- Of the eight sold properties, five received multiple offers and four of them sold over their asking price. The amount of over bids ranged from as little as $14,000 to as much as $69,000. I note an increase in the minimum amount of overbids from the previous quarter.
- Only one of the first quarter’s eight sold properties had a price reduction (compared to the fourth quarter’s five).
- None of the eight sold properties were a short sale or foreclosure. In the fourth quarter we had three.
- Interest rates are fluctuating, but still low, generating some movement with buyers who are fearful of rising interest rates.
- This analysis covers both Inner Parkside and West Portal, but I see these two districts as three neighborhoods-Inner Parkside is split into two pieces in terms of property values (South of Ulloa and North of Ulloa).
- Throughout 2011, the neighborhood values remained stable. Since the beginning of the year, I estimate we have seen increases in value between five and 10 percent. To establish this, I used comparable sales from the Northern part of Inner Parkside (north of Ulloa), where the majority of the sales activity occurs. It is also interesting to note, that most of the active inventory is usually in this area and there is none now. If you are in this area, it is a great time to get your house on the market.
- Sellers, if you do bring your property on the market, it is still dot-com era mentality, which means a property needs to be viewed as a value in the mind of the buyer in order to take action (a little underpriced); they will let you know what the property is worth during the bidding process. This is different now, in that before the market accelerated, underpricing could only be on premium properties; in the current market, it will include more of the marketplace.
- The same rules apply now as before; if it doesn’t sell within the first two weeks, sellers need to consider a price reduction to keep the marketing momentum going.
- I do not think we should assume that all is well and we are on the way to recovery. This could still be a temporary bump as a result of a lack of inventory; if and when more comes on the market and buyers have their choice again, I expect values to level out.
Eric Castongia, Residential Sales Specialist (DRE 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, web at www.SFHotBuy.com , or via mobile phone at (415)307-1700.