The Market Takes A Break While Conditions Remain Favorable for Real Estate
There was a slow start in real estate at the beginning of 2019. Sales were slow citywide – sellers held off putting their homes on the market and hesitant buyers waited to pay top dollar for what was one the market. The economy at the beginning of the year was unsettling with the shifty stock market. Prices soared to new peaks in summer-early autumn 2018, plunged drastically in Q4 2018, and then saw the biggest Q1 jump in 20 years. This insightful article on the impact of stock investment and real estate got people thinking.
In addition to the positive news of the rebounding stock market, home loan interest rates dropped, re-motivating San Francisco’s buyer pool who now have more purchasing power despite rising home values. Even with the average sales price of a condo up slightly from last year, a lower interest rate decreases the monthly mortgage payment. The rains also contributed to a slow 1st quarter – it wasn’t until the the end of March that we saw increased foot traffic through open houses and more pre-approved buyers. Still, inventory was uncharacteristically low which meant less sales. 651 condos have sold, in comparison to the 701 condo sales last year at this time.
Despite a sleepy first quarter, the condo market is expected to strengthen throughout the year – interest rates and economic conditions currently remain favorable for real estate. Buyers are circling to buy now, especially before the next wave of tech money from IPOS starts rolling in. Perhaps this is why sellers are waiting to put their properties on the market. Additionally, the federal reserve always looks to the stock market for gauging mortgage rate changes. As of now, rates will remain low semi-permanently unless inflation increases. With that said, the general feeling from sellers is that there is no need to rush to sell. If you’re considering putting your home on the market, continue to follow the market closely from now until the end of the second quarter. The last two years, summer was unseasonably peak selling time and it could happen again this year with the looming IPOs. It’s always best to sell on the way up and we are watching closely for the indicators to tell us that it’s on.
Condo Pricing Remains Strong Into Spring
Buyer competition for condos remain strong in April, with 57% of condos selling over asking price, only 2 percent points lower than last year. Pricing your property at a fair market value can lead to more buyer interest and ultimately multiple offers. Call me for a analysis of your property’s valuation today.