Tuesday, April 29, 2014

School Scores Affecting Buyer Choices?

There's a tv commercial still making the rounds (it's almost a year old) where the husband suggests to his wife that they not consider a home where the school rating is too low.  There are any number of web sites which carry home listings for sale that also provide information from various school rating sources.

Ironically, in San Francisco, this seems to be less of a consideration since proximity to a school is only one of several criteria that determines how students are assigned to schools.  Ironic, because one of the most often stated reasons for parents with young children leaving (or avoiding) San Francisco is because of the arcane school selection process.  I've seen this countless times both from parents moving to the Bay area for work reasons as well as parents currently living in the city who make plans to move to a nearby county for "better" schools or more certainty in the school assignment process.

There is some suggestion that on-line school ratings somehow undermine fair housing laws.

Inman news has a four-part series exploring this issue.  Here's a link to the third in the series.

As with the wide array of statistics available to prospective buyers including recent sales prices, estimated value, crime rates and even investment potential (yes, there's a web site that attempts generate a single number to compare investment potential), it's important for the consumer (buyer) to have an understanding of the underlying meaning.  There's a great example of this in an article written by Heather Knight who was the San Francisco Chronicle housing writer at the time -- San Carlos has four elementary schools all of which rate well above the state averages yet some buyers shun the area around the lowest scoring school.  In addition, if you delve down into the details of the score you'll find that the high performance in all four schools is coming from a particular racial group with other racial groups well behind their state-wide peers.

Monday, April 28, 2014

New Listing Activity

New listings of single family homes and condos over the past two week held steady compared to previous two-week periods.

However, the percentage of them that went into contract within that same time period has dropped -- and in the case of single family homes, it hasn't been this low since last September.

You can see the full report here.

It's the second report in a row where the percentage of homes going into contract within two week of initial listing has dropped.

Another interesting tidbit in the numbers:  9.4% of the new condo listings also posted a price reduction within two weeks of listing.  That's the highest percentage of two-week price reductions of condos we've seen since since the Christmas holidays.

We're talking about listings in the San Francisco MLS.  As such they do not include private sales that do not involve a broker representing the seller, nor do they include some/most new construction condos since most developers list only a handful of examples of their units.  This allows them to keep close control over the speed at which units are seller and sales prices.

Friday, April 18, 2014

Hypocrisy / Deceptive Advertising

Everyone in the real estate business is always looking for an edge -- something that will differentiate you from the competition.

We've seen brokerages try all sorts of things from commission discounts with reduced service, flashy web sites, focus on high-end properties, free estimates, balloons on for-sale signs, spot advertising on web sites -- it's all out there.

At the end of the day, our business relies mostly on personal relationships.  Successful transactions for both sellers and buyers depend on the trust developed between the principal and their agent.

Key to developing that trust is for each party to do what they say they will do, when they say they will do it.

So how do you trust a brokerage that prominently promises on its web site:
What Makes Us Better? We Will Not Cheat On You.  Could you imagine going to court and having the same lawyer represent you and the other side? How silly would that be? At XXXXXX, our agents will only represent either a buyer or a seller in an agreement, never both.

Yet, in the last six months this brokerage has seven transactions recorded in the MLS, two of which they represented both buyer and seller!

Let's be clear.  In California there's nothing illegal about what's called "dual agency" in which the same brokerage represents both buyer and seller as long as it's disclosed to all parties and agreed to and I have no reason to think this brokerage did not obtain the necessary consent from both buyer and seller in these transaction to act as a dual agent.

But if you're going to promise in your advertising that you will never represent both sides in the same transaction (and by inference suggest that your level of integrity is higher than your competition) and then turn around and do exactly what you promised not to do, what does that say about how you're going to handle your responsibilities in a real estate transaction.

Most buyers and seller don't have the ability to check claims like this since this information isn't readily available to the public. Unfortunately, it's just another due diligence step for buyers and sellers when selecting an agent.

Thursday, April 17, 2014

Is San Francisco real estate a good investment ... ?

... even at today's prices?  One of our colleagues has a client who asked this question after their offer was not the winning bid.  (This was the third property property where they lost out to higher offers).

This graphic will let you know how it has worked out over the past few years:

If you expect to hold on to the property for five years our recent history suggests you should be able to ride out even the worst of downturns.

Wednesday, April 16, 2014

Spring is Finally Here, part 2

Some pictures of our next door neighbor's apple tree in full bloom.

Click here for the short slide show.

Market Competition

Our biweekly report on new listings gives us a look at the current market activity.  It shows a lower number of new listings of single family homes but an increase in condo listings compared to two weeks ago.  But the number of listings is well below where it was last summer (when we first started tracking this particular metric).

Click to enlarge.

The percentage of those new listings that went into contract within that two week period has dropped slightly over the past two weeks but still showed almost 17% of single family homes and almost 20% of condos in contract within two weeks.  

Click to enlarge.

These numbers continue to confirm the competition buyers are running into when making offers and which results in significant overbidding and final selling prices averaging 10% over asking.