| Spring has sprung, and the real estate market in San Francisco is back! We put nine of our listings in to contract in the past three weeks. If properties are priced correctly and well-presented, they are moving fast and with competition: from condos to houses, and at all price points. The combination of the rising stock market, stabilizing rates, and high consumer confidence has pushed buyers from the sidelines and into the real estate market again. To be clear, prices are still down significantly from their peak. But what we saw last fall and winter were not just price drops but also complete stagnation as buyers did not want to commit to listings with the mortgage rates so high. Now, as time has passed and it becomes clear that those rate drops are not coming in the next month or two, buyers are ready to pull the trigger. The market is particularly hot for the sub-$2M range. The March 2024 number of listings going into contract (‘going pending’) was the highest since mid-2022, a great indicator of buyer demand. Absorption rates for both homes and condos are at their highest rates in years. Condo prices are a bit higher than 2016/2017 but not quite at 2018 levels. A lack of inventory is also keeping prices stable for both homes and condominiums. Recent home sales over $3M were up 49% year over year, a huge jump. Days on market are dropping for both homes and condominiums, but single family homes are still selling much more quickly than condos (approx. 25 days vs. 47 days). Homes are flying off the shelves because there just aren’t many available! Single family homes are percentage of homes selling over list price was 69% with 36% for condos. Homes are going for, on average, 9% above list price, and condos at 1% below. This shows the importance of pricing in this market. We are having much more success pricing low and generating competition, at all price points, than pricing at what we think the true value is or pricing above value and leaving room for negotiation. Many sellers are waiting right now to see rates come down or evidence that prices are coming up. Our advice is to sell now. The inventory is low, buyers are active and confident, and we have a few months until the summer fog kicks in. Once election season starts, we are not anticipating a robust Fall 2024 market. On average, prices are 4% lower historically in San Francisco when sellers sell in fall, versus Spring! As a recent case study, we listed 2827 Laguna recently for $1,995,000 and received a preemptive offer before the bid date (at which date we were expecting five offers) for $2,250,000. Had we priced the condominium at $2,250,000, we anticipate it would have ended up selling for $2,200,000 or below. It was the excitement and competition that drove the price up in the end. Other than the hot Spring market, the topic on everyone’s minds right now is the realtor commission lawsuits and recent settlements. As you may have seen or heard, there is a proposed settlement by the National Association of Realtors (NAR). While the settlement will still require final approval, there is so much confusion in the media and among the general public. Here are a few facts:Sellers retain (as they always have) the discretion to offer compensation to buyer’s brokers. The proposed settlement doesn’t prohibit them from doing so. Commissions are not set by law and have always been negotiable. They will continue to be discussed and negotiated through transparent conversations with our clients. Reduced fee alternatives and ‘discount brokers’ will continue to be available for consumers seeking those options.The proposed settlement will require that any buyer represented by NAR-affiliated agent has to sign a buyer representation agreement outlining the relationship between buyer and broker when touring a property or making an offer, something that has been required by 14 states for over a decade.Buyers deserve representation. Our experience has shown that transactions flow more smoothly when there is professional representation on both sides, and buyers receive risk management counseling and negotiation advice. Over 90% of real estate transactions in San Francisco have agents on both sides due to the changing market, complex nature of the properties we sell, high values involved, and delicate negotiations. We believe this will continue for those reasons.As both buyer and seller’s agents, we provide tremendous value to our clients. We will continue to encourage a transparent commission conversation that reflects our time, effort, expertise and support which we invest in each transaction.We see these changes as positive. If approved, the terms of this settlement will provide an opportunity to enhance the professionalism of the industry and elevate other agents to the standards to which we have always held ourselves. |
| Real estate is a relationship-based business, and the trust we’ve earned from our clients is something we value so highly. Together, we will navigate the changes to rules and regulations within our industry while continuing to provide our clients with the exceptional service we always have. Please get in touch with any questions you may have. We look forward to continuing to serve you and we remain dedicated to helping you achieve success in real estate! Here is the link: APRIL 2024 NEWSLETTER |
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