Archive for the ‘Home Buying’ Category
January 6, 2009
Last night I met up with a client who I am going to refer to an East Bay agent. We got to talking about how to find the right agent and the advice I gave was motivating enough to write a post about it. So here we go.
There are two types of real estate agents out there. There are salespeople, and there are consultants. Lets go through the characteristics of each, and end it with a discussion on how you can choose the right one appropriately.
A salesperson:
- Usually a smooth talker.
- Puts their interests ahead of their clients’.
- Only works with people who have to buy or sell NOW.
- Can manipulate Read the rest of this entry ?
Posted in Home Buying, Home Selling, Tips | Tagged advice, agent, buyer's agent, characteristics, expertise, how to choose an agent, qualities, real estate agent, realtor, san francisco, san francisco real estate, seller's agent, Tips | Leave a Comment »
December 21, 2008
We’re aware that the title of the post makes us sound like market cheerleaders, but we assure you, we’re not. We value the truth over everything, and we’re not afraid to tell it how it is. There is no reason to cheerlead when opportunities abound in any market condition. Besides, it’s just plain old corny.
However, it is great to know that one of our theories about the market seems to be holding up, and that theory is:
San Francisco’s desirable homes continue to sell near or above their asking prices, and values are continuing to drop for the homes that nobody wants.
Case in point, a sale that just closed yesterday (December 20th) at 4036 26th Street in Noe Valley. This single family home hit the market during the extremely turbulent month of October and was on the market for just over a month before it went into contract and closed escrow within 41 days. The 4 bedroom, 2 bath Victorian measuring ~2,021 square feet was originally offered at $1,398,000 and ended up selling for $1,365,000, which is 97.64% of asking. Check out the pics:
4036 26th Street
4036 26th Street
For more pictures and info, continue reading –>
Read the rest of this entry ?
Posted in Home Buying, Neighborhood Info, Noe Valley, Snatched Up, Tips | Tagged 2008, 4036 26th street, asking price, december, Noe Valley, sales, san francisco, san francisco real estate, single family homes, trends | Leave a Comment »
December 17, 2008
It seems the question on everyone’s mind is how the stock market crash of October 2008 has affected activity in the local real estate market, ie: numbers of home sales. We set out to find the answer, and here’s how we did it.
Are buyers and sellers in a stalemate?
First, we limited our search from November 1 through December 16. The reason we chose November 1st is because there is a lag of activity in the market. Many people were in escrow during the crash of early October and ended up closing in late October despite conditions. What we wanted to find out is how many people were willing to move forward with a purchase after the crash rocked everyone’s boat, hence the November 1 start date. The reason we capped the search at December 16 is because today is the 17th and the 16th was our last full business day.
Next, we constrained our numbers to the City of San Francisco only. No outlying areas are included. Property types in these numbers include single family homes, condominiums, tics, lofts, and stock cooperatives.
Lastly, to get a point of comparison, we ran this query for each year during the exact same time-frame, going all the way back to 1995. How did it stack up?
Sales Activity is at a LOW (click to enlarge)
What does this data tell us? Read the rest of this entry ?
Posted in Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis, Tips | Tagged 2008, advice, market activity, october 2008, sales volume, san francisco, san francisco real estate, stock market crash, Tips, trends | Leave a Comment »
December 11, 2008
Have you ever been curious about how many properties sell within a certain price range around San Francisco? Well wonder no more. We have built the charts and are ready to show you the numbers.
Time to run those numbers...
But first, a little background on data gathering. We searched for all sales in the city of San Francisco ranging from January 1 through December 10 of this year (2008, if you haven’t caught on by now). We tallied up the number of sales in 13 different segments. The segments go from $0 through $249,999, $250,000 through $499,999, and onwards in quarter million dollar increments from there. We stop at $3 million and include all sales above $3 million in one category.
MLS currently shows a total of 4,210 sales of single family homes, condos, lofts, TIC’s, and stock cooperatives within the city of San Francisco for 2008 (thru December 10). Here is the distribution, and keep in mind, this is for all of San Francisco – from Bayview to Pacific Heights:
Distribution of 2008 Sales (click to enlarge)
For the pie chart and commentary, continue reading –>
Read the rest of this entry ?
Posted in Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis | Tagged buyers, market, market segments, number of sales 2008, sales distribution, san francisco, san francisco real estate, sellers | 2 Comments »
November 24, 2008
“Comp” is industry shorthand for the word “comparable”. What is a comparable, and what makes a good one? That’s what this article is all about.
“Comps… huh?!?”
Real estate agents and appraisers use comparables to determine the value of a home. Actually, there are three different methods used in determining the value of a home, but the approach that utilizes comparables is the one that holds the most weight. The whole idea behind figuring out the value of a home (we’ll call it the “subject property”) is to compare it to other homes that have sold nearby.
A “comparable” is a sale that is A) competitive with the subject property, B) took place on the open market, and C) Read the rest of this entry ?
Posted in Appraisal 101, Home Buying, Tips | Tagged advice, Appraisal 101, case shiller, comparable, comps, dataquick, puppeteer, sales, san francisco, san francisco real estate, Tips | Leave a Comment »
November 21, 2008
Welcome to “The Scale”. We’ll be taking a look at inventory absorption in different micro-markets around the City, and from the data, determine whether each neighborhood is a buyer’s market, a seller’s market, or in balance.
What type of market is it? It's time to judge.
How do we do this? The first thing we do is find out how many active listings there are in a particular neighborhood. Then we find out how many homes are selling on a monthly basis in that same neighborhood. We divide the active listings by how many homes sell in a typical month, and this tells us how many months of inventory exist in that neighborhood.
What does “months of inventory” mean? This means that if new listings were to cease coming on the market immediately, it would take this many months for all of the existing inventory (or active listings) to sell off. For example, if we find out that Nob Hill has 47 active listings, and an average of 10 sales take place during a typical month, this would mean that there are 4.7 months of Nob Hill inventory sitting out there. Thus, if no new listings hit the market in Nob Hill, it would take 4.7 months for that inventory to absorb (sell).
How many months of inventory are in your neighborhood?
“So what”, you’re thinking – why does this matter? Read the rest of this entry ?
Posted in Downtown, Financial District, Home Buying, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis, Nob Hill, North Beach, North Waterfront, Russian Hill, Telegraph Hill, Tenderloin, The Scale, Tips, Van Ness / Civic Center | Tagged absorption rates, buyers market, civic center, district 8, downtown, financial district, in balance, nob hill, north beach, north waterfront, russian hill, san francisco, san francisco real estate, sellers market, telegraph hill, tenderloin, The Scale, van ness | Leave a Comment »
November 16, 2008
Some of you may have thought I was crazy when I wrote about listing prices and how they mean nothing. I know… it’s an extreme stance to take. But I’m all about seeing what the market is doing (ie: looking at SOLD prices), and not so concerned with what the market is hoping it can do (ie: looking at LISTING prices). That’s why I stand where I do on the issue.
- I’ve been known to take an extreme stance on certain topics
My background in real estate appraisal is probably to blame. In appraisal, we look back at the market, viewing what happened — not forward, looking at what could happen. Appraisers are taught that the only way to reliably see what is going on is to study market action, and market action is determined by closed sales. Not listing prices, contingents, or pendings. Closed sales.
Let’s illustrate the danger of depending on the validity of a listing price by looking at a real life example in Haight Ashbury. 513 Clayton came on the market on May 25th for $1,195,000. This charming 3/1 condo has an excellent Read the rest of this entry ?
Posted in Appraisal 101, Haight Ashbury, Home Buying, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis, Tips | Tagged Appraisal 101, buyer tips, condos, extreme stance, Haight Ashbury, home buying advice, listing prices, sales prices, san francisco, san francisco real estate | Leave a Comment »
November 12, 2008
This post is to anyone out there who was counting on the $729,750 loan limit lasting until December 31, 2008. While it’s true that the official cut-off date is the end of the year, many lenders are already making the transition to the new $625,500 limit now. They are requiring folks to go ahead and lock in. How do you lock in? The short answer is: you have to be in contract on a place. If you are one of the people that could be affected by this, you may want to call your lender as soon as possible to see if you’re going to be able to squeeze under the $729,750 cap before it expires. We’ve heard some lenders are sunsetting $729,750 as early as this Friday, and most by next Friday! Ouch baby, very ouch.
Bye bye $729,750... till next time!
To share this post, continue reading –> Read the rest of this entry ?
Posted in Home Buying, News, Tips | Tagged 625500, 729750, lending, loan limits, money, mortgage, san francisco, san francisco real estate, sunset | Leave a Comment »
November 7, 2008
When you’re out looking at properties, be on the lookout for curable versus incurable characteristics. What are these?
Jaw-dropping views from the back yard!
Both refer to types of depreciation homes can go through. However, there is a big difference. Curable refers to conditions that are financially feasible to fix. This means that if you were to spend $1 on curing this type of depreciation, you would get back $1 or more of your investment. Some examples include repainting, putting in a new kitchen, or updating an old bathroom.
By contrast, incurable depreciation is where one would invest that same $1 and get back less than the full $1 in return. Examples range from Read the rest of this entry ?
Posted in Appraisal 101, Home Buying, Tips | Tagged 747, advice, Appraisal 101, curable, depreciation, home values, incurable, obsolescence, san francisco, san francisco real estate, Tips | 1 Comment »
November 4, 2008
I’ve been hearing a lot lately about price reductions, price drops, prices bottoming out, yada yada. Well here’s some news for ya. Listing prices mean absolutely nothing. Here’s why:
1) Listing prices are determined by the seller and the seller’s agent, putting their heads together and arriving at a figure which is amenable to both… but more often than not, a figure that is amenable to just the seller. Realtors will oftentimes take an overpriced listing just for the opportunity to sell the home, knowing that future price drops are part of the deal. Don’t get mad at ‘em. It’s their job to get top dollar for their seller.
2) By law, the seller’s agent owes a fiduciary responsibility to the seller. So, I ask you, could the listing price be a more biased number?
3) There are many strategies to pricing. Price low and let the market bid it up. Price right and hope for the best. Price high and see if there’s a sucker out there. Pricing strategies further cloud the “validity” of a listing price.
4) Most importantly, listing prices do not show us anything about what the market is doing. Sold prices are the only thing that show us that. Solds speak of action, and action defines the market. Everything else is just noise. Listing prices, price reductions, you name it.
- Here is a graph of the meaningfulness of listing prices. Yup, it’s displaying correctly.
Because list prices are biased, fail to speak of action, and mean nothing, so does all the hype surrounding price drops. Every time Read the rest of this entry ?
Posted in Appraisal 101, Home Buying, Tips | Tagged advice, Appraisal 101, comps, listing prices, sales prices, salt, san francisco, san francisco real estate, Tips | 2 Comments »
November 2, 2008
Gone are the days where you could buy any old piece of property and do okay. The feeding frenzy is long over. Nowadays, buyers must be smarter in deciding what to buy. The old wisdom was “location, location, location.” While we agree that location is still the single most important factor in real estate, a new reality is here and we want to share some tips with you on how to make a smart investment in real estate.
- A new reality in real estate requires buyers to be smarter than ever.
So what’s our new mantra? Read the rest of this entry ?
Posted in Appraisal 101, Home Buying, Tips | Tagged advice, appraisal, desirability, Home Buying, location, miami, monkey, san francisco, san francisco real estate, scarcity, smart buyer, Tips | Leave a Comment »
October 27, 2008
This weekend I ran an open house and bumped into a young woman who had been to a few properties before visiting mine. She said that a few other Realtors she had spoken with were all touting “now’s a great time to buy!”.
I quickly congratulated her for having rubbed elbows with some fine real estate salespeople… but hardly real estate experts.
How can one possibly know if it’s a good time to buy if they haven’t asked you one very simple question first? The truth is, the only way it’s a good time to buy is if
- What’s it going to take to get you into this house today??
Read the rest of this entry ?
Posted in Home Buying, Tips | Tagged advice, good time to buy, is now a good time to buy, october 2008, sales, san francisco, san francisco real estate, sleazy salesman, Tips | 2 Comments »
