| Dear Clients, Colleagues and Friends, What a week! The combination of Daylight Savings Time and the drawn-out Election results has left us a bit exhausted, but today we are regaining our normal footing. Looking ahead, much is unknown as we move into 2025, but we are feeling optimistic for San Francisco! With a new mayor who is pro-housing and a few more moderate Board of Supervisors, we are hoping there will be will positive change for San Francisco in the areas we are most focused on (in no order of importance): housing and business development policy, the streamlining of city permit and approval processes, improved public safety and cleaner streets, and the revitalization of the still-struggling downtown area. If the changes promised by the new mayor and Board of Supervisors are put into effect, that can only mean good news for the market, and for housing prices. The portion of homes purchased in California by out of state buyers was down even further this year, to 3.9 percent of purchases, and we would love to see that number rise as our great city becomes a more desirable place to own property. As for the market, even after our decades in the business, having witnessed many boom and bust cycles and seasonal dips, it is surprising to us how busy it has been in the past six weeks! We are used to a busy September and even early October, but as of two days ago we are seeing multiple listings, which had been sitting for weeks or even months, go into contract with strong, non-contingent offers. This is much later in the year than is typical. The inventory levels are so low and there are many buyers ready to go who can’t find anything to buy! Across San Francisco, October sales activity hit its highest point since Spring 2022, as did the absorption rate of listings – properties were really moving! Monthly sales volume was up 19 percent year over year, average days on market decreased, and overbidding percentages increased. Obviously the decline in rates would be a contributing factor, as well as the strong stock market performance of late. We also think that buyers (and sellers, who are strategizing when to list) have come to realize that rates may not be coming down drastically (if at all) next year and so any dip in rates is a reason to move forward. Year to date sales of houses over $5M were up 40 percent and luxury condo and co-op sales over $2.5M were up 48 percent. Median home prices were up 2 percent year over year. The median price of condominiums was up 5 percent year over year, which is a nice bump for the condo market although median price is a somewhat imprecise statistic as it can be heavily influenced by a few high-priced sales. Don’t confuse increased sales activity, however, with overall prices and valuations! We are seeing a lot of activity but still at significantly lower prices than in 2022. But that may change. Now that interest rates don’t seem to be falling anytime soon, and there is so little inventory on the market, prices are generally holding steady and even creeping up in some areas from last year. With the Election behind us, we must refrain from any strong predictions for rates as a lot of what had been predicted seems now to be being revised! As of this moment, it seems that despite the Federal Reserve cutting a quarter point from the borrowing rate, mortgage rates will remain stable through early 2025, and they may even increase next year if tariffs and tax cuts, promised by the incoming administration, are implemented and inflation rears up again. This is not good news for buyers or sellers, but it remains to be seen whether those policies will go into effect, what effects they will have on the economy, the cost of borrowing money, and how quickly. On a different note, the slide on insurance in the Flipbook may come as a surprise to those who haven’t been in a recent real estate transaction, but unfortunately is all-too-familiar to us: obtaining property insurance is a newly significant hurdle for today’s California buyers. 13 percent of agents surveyed had a transaction cancelled due to insurance (either being unable to obtain it, or the price being prohibitively expensive), versus 7 percent just a year ago. Insurance agencies seem particularly focused on the presence of knob and tube wiring in homes, outdated electrical panels (not just Federal Pacific anymore!), older roofs, and a lack of recent seismic upgrades. Our job as buyer’s agents is to help connect buyers with great insurance brokers to assess the feasibility and cost of insurance BEFORE offers are due or within an inspection contingency period, saving our clients time and money to figure out whether the property they are interested in will prove too costly to upgrade or insure. Sellers considering selling in the next year or two would also do well to assess these items BEFORE looking to sell – a qualified electrician can help upgrade wiring, remove outdated and obsolete knob and tube, and replace panels. Our favorite seismic vendor can perform an insurance-approved seismic upgrade to a property with anchor bolting, shear walls, strengthening post-and-pier connections and more, all for around $10k (typically) – while you comfortably live in the home with a week or less for the work to be complete. In today’s insurance environment, this type of work is scheduling further and further out because the vendors are all booked. Please do not hesitate to get in touch if you would like recommendations for vendors or if you are considering a renovation project. We are here to assist and advise you at all stages in your real estate journey! As we move towards Thanksgiving and the holidays, we hope you will be able to take time with your loved ones and get outside to enjoy our beautiful, snow-free winter season in San Francisco! |
| Here is the link to the Flipbook. All the best, Team HatvanyNina, Natalie, Vanessa & Paul |
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