It still may be too soon to assess any knock-on effects from Silicon Valley Bank’s demise in San Francisco’s housing market, though several local residential real estate professionals have a few ideas of where the situation may lead.
Coldwell Banker Realty in Northern California President Jennifer Lind said she saw the banking event as something that adds more reticence in the buyer market — though buyer pools continue to remain shallow compared to last spring.
“As a result of the collapse, it creates another level of uncertainty in the market,” Lind said. “Some buyers may decide to hold off from any immediate real estate purchase until they are more comfortable with the market and others may view this as an opportune time to make a purchase with less competition in the market than what existed in prior weeks.”
“While very early, the biggest ripple effect we are seeing among our buyers is a temporary pause in their search,” said Dale Boutiette of Compass’ Dale + Alla Team. “Not because they are clients of SVB, but because of the potential banking fallout. This could well be an extraordinary time to purchase.”
People who have extra liquidity sitting around also may begin to reconsider buying real estate, said Compass broker Gina Blancarte. “We may see an uptick in real estate sales because people may be afraid to keep a lot of liquidity lying around and would rather invest in real estate, which has a proven track record of long term appreciation in cities like San Francisco,” Blancarte said.
Avenue 8 CEO Justin Fichelson told me one silver lining of the banking fallout is that he believes interest rates are going to be going down in the near future, which will enhance the confidence of both buyers and sellers.
“Typically spring is the busiest market anyway, so by the time that comes along, I think interest rates will stabilize, and I actually think it’ll be pretty good in San Francisco and in the Bay Area.”
KW Advisors broker Jennifer Rosdail told me she also expects a change in the Fed’s interest rate policy going forward.
“This week people are talking about them stopping raising interest rates, and I think maybe they’d better because of what everyone was saying last year —they were going to raise interest rates until something breaks,” she said.
“They’re going to raise interest rates until the banking system breaks, until the real estate market breaks. Until something breaks and they broke something.”
Rosdail told me she sees San Francisco as the tale of two markets — single-family homes and condos — and expects sales of the former to pick up sales in the spring but without much of a price increase.
“I think the single family home prices are going to be probably higher than they were in October,” she said. “But I don’t expect them to surge past where they’re at now.”
San Francisco’s median home sales price in February stood at $1.5 million, down 14.5% year-over-year, according to Compass data, but monthly sales volume was up, as was the number of homes selling for more than $3 million.
Some recent sales and new listings have also peppered the the local market. A $5.72 million sale at 33 Mountain Spring Ave. in San Francisco’s Clarendon Heights neighborhood closed on Friday after listing for $5.99 million. The property — now listed by agent Alex Hachiya of Sotheby’s International Realty — had been listed with another brokerage last year with an asking price of $4.5 million and didn’t sell, but this time around it sold quickly for nearly 30% more.
Compass Agent Nina Hatvany also recently helped bring to market a 1923 Presidio Heights mansion with Golden Gate Bridge and Presidio views for
$23.5 million. See inside 3410 Jackson St. in the gallery below.
