We are finally feeling the crunch in San Francisco. Both the number of home sales and the median sales prices are down. What does that mean for you if you want to buy or sell real estate in the near future? There are many great opportunities for both buyers and sellers in this type of market.
If you are a seller who wants to move up to a more expensive home, believe it or not this is a great time for you. Consider that if the market has dropped 10 percent since you bought your $800,000 home you have “lost” $80,000. But if you are planning on moving up to a $1.2 million home then that 10 percent depreciation is a $120,000 “gain.” In the big picture you are still ahead. If you wait for prices to go up so that your current home is worth more you will pay more for the move-up house, unless you are moving to a different real estate market.
If you are a first time home buyer there are real opportunities in this environment. Sellers that have received no other offers are more than likely willing to negotiate with you on price, terms or both. Interest rates on mortgages are still very low. Many sensible buyers are concerned about paying too much in a declining market. Why not wait to see if prices go lower? The problem with that strategy is that you won’t know that the market has hit bottom until prices start to rise again.
Instead of trying to predict the bottom, consider your plans for the property you buy. If you can afford the payments comfortably and will own the home for five years or more why not get a place you love? Most economists believe that this recession will be over in the next couple of years. It is reasonable to expect housing values to rebound after the economy recovers.
The most important consideration when purchasing a property – in this environment more than ever – is that you buy well. An established residential neighborhood with a walkable village area and convenient transportation is more likely to remain desirable in the future. Buying a property with a great location and amenities, is your best cushion against falling values in the future. These types of homes hold their value better in a bad market and appreciate faster in a better one.
This is why you would want to contact me as your trusted advisor and real estate agent to assist you in finding the diamonds in the rough and the best values in today's real estate market.
San Francisco resident and investment property owner Kevin Dunn is a Realtor at Herth Real Estate. He can be reached at 415-621-6604 or email at kevin@sfyourhome.com
