Seeing A Massive Increase In Single-Family Home Buyers. What's Changed In San Francisco Real Estate?

We're seeing an increase in single-family home buyers. So what's changed?

February in San Francisco is most typically marked by bidding wars and a frenzied market. Generally the spring is the time that we see the majority of home price appreciation for the year. I’ll be honest, I was NOT expecting to see that this year. It is too early to tell if this moment in time is temporary or here to stay. I always promise to give you the insights to what I’m seeing when I see it so you can know what’s going on FIRST. Here’s what I’m seeing:

- There is a massive increase in the number of buyers showing up not only to open houses but also to write offers in multiple offer situations.

- Aggressive buyers are writing primitive offers and taking advantage the uncertainty that sellers and listing agents are feeling

BUT here's the caveat: we are not seeing massive overbids across the board. It’s not clear to me at this time if condos are shifting, but if single-family homes are shifting it makes sense that they will follow.

Not every home is flying off the self. Homes that are priced low, in perfect locations, or check every box are going quickly.

It’s interesting to note that last year buyers in most cases were not going ALL in on underpriced listings. We would see 3-4 buyers show up but they didn’t always bid the property to market value. It appears to me that buyers are more aggressive this year than they have been.

So what changed?

The housing market in SF is VERY closely tied to the stock market. When the stock market is doing well, typically the housing market is doing well. I think it’s possible that we will continue to see a lot of volatility in the stock market which means that we will see that same volatility in the housing market. It really feels like a week-by-week situation.

There is not a lot to buy and I don’t expect this to change dramatically. March, April and May will certainly have more inventory than Jan and Feb, but I do not expect this year's inventory to come close to what we saw last year. Many sellers have been very resistant to put homes on the market unless they are VERY uncomfortable. Their interest rates are low and many of them want to sit this out and wait for better prices. The lack of inventory is putting pressure on prices.

Despite the uncertainty in the job market, consumer confidence feels fairly strong. December was a month where interest rates on loans were declining and we’ve had positive news on the inflation front. Things seem to be moving in the right direction, despite signs of a possible two-step forward one-step back situation.

I’m sure some of you are really confused about why I’m talking about a possible change in the market when the headlines say the exact opposite. If you’ve been following me for a while you’ve probably started to realize the news and the stats are about 3 months behind the facts on the ground.

To get the most accurate information about the market you need to talk to someone who sells a lot of homes. Fortunately, we do! Feel free to reach out to me at ruthkrishnan.com for more specific information about your specific needs and if now is a good time for YOU to sell or buy.

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