Saturday, March 24, 2012

More signs of a trend ...

The San Francisco Real Estate Market exploded two weeks ago and while most thought it would be another solid year of sales, the shear quickness and intensity of Buyer demand was not anticipated. Inventory has been unusually low and it appears it has not been building as fast as most years. Since March 1 there have been 180 new condos and 170 new single family homes appearing in the San Francisco MLS. 88 of the condos (about 49%) are now under contract with an average DOM of 14, and 87 of the single families (about 51%) are now under contract. Shades of '05 and '06!

With two consecutive year-over-year growth years behind us and the first quarter of 2012 about to show very strong numbers, 2012 should be the third year of year-over-year growth. Most analysts and prognosticators usually consider three in a row to be a TREND. As the Bay Area goes so goes California, and as California goes so goes the Nation, let's hope the old saying holds this year!

Sellers are finding that if you generally list your property consistent with the most recent comparable sales, 1 in 3 are finding a willing and eager group of buyers, pre-qualified and able to close in 30-45 days. These buyers are anxious to WIN even if it means offering a little over asking -- in some cases with a 5 to 10% premium.

It is quite confusing to buyers, especially first-time buyers, to understand this hectic market pace since national news outlets are still talking about a sluggish real estate market. Buyers who are new to the area often remain in denial for their first two or three offers. It's gratifying for SF agents when they begin to listen to educated advice.

Seller's had just about been convinced that premium pricing was not working unless the property truly reflected premium quality. This might just make it more difficult to convince them that over pricing can still leave a property languishing on the market.

In taking a closer look at the data, it appears that this phenomenon is showing up in properties ranging from $400K to $1.5M+ and includes most of the 10 MLS districts in San Francisco. Also, Mill Valley in Marin and some South Bay Communities are experiencing similar demand.