February 2019
In early 2019, the No. 1 question people ask is, “How’s the market?”. Presently, it is good for both Sellers and Buyers, with Sellers getting slightly less on sales price than a year ago and Buyers more cautious on purchase price.
The numerous conditions that caused the 2008 to 2011 financial downturn presently do not exist, as best as can be determined, and would be very difficult to replicate. Many people are still recovering from that event.
Our local Bay Area market has been adjusting since Summer 2016. Instead of non-stop prices rising year-round, adjustments are occurring now every Summer and Winter, with a shortened yet strong Fall market. Spring is, generally, our strongest market.
Some causes for our present market adjustments: 1) A slow-down of fix ‘n’ turn properties, mainly by contractors with an added real estate license, but rarely trained as agents; 2) Lots of newer, unskilled agents (unable to be properly vetted online); however, there are still plenty of well-trained agents, but mainly found by word of mouth; 3) An excess of agents from outside our area (as far away as San Diego); 4) Landlords selling to tenants they’ve befriended; 5) Over-listed properties that don’t reduce pricing in a timely manner (2-3 weeks); 6) Off-MLS listings, which reduce the Seller’s chances of highest/best offer and skew market values; 7) Agents delegating to less-skilled team members; 8) Agents with minimal overview for accurate research and negotiating skills; 9) Inability to create thorough and complete disclosures for interested buyers to review prior to offer date, or soon after; 10) The damaging effect of technology on quality and skill, along with excessive, misunderstood and unfocused data; 11) Liveability in the Bay Area from rapid changes, extreme over-building and density, plus ongoing loss of small businesses.
Buyers are mainly local and are financially strong and motivated, with fewer buying “all cash”. Many still offer 20%-50% down. Interest rates are super low, with the slight adjustments having minimal effect. AND, with just 3.5% down, Buyers can get loans. Plus, lenders and the Feds have eased up requirements, again allowing “bank statement” loans (minimal documentation) as proof of purchasing power. Low credit scores and co-borrowers are acceptable too. And you can buy a home with a reverse mortgage. Basically, the playing field is wide open, with the skill of the agents involved being paramount to success.
It’s always a good time to discuss your goals, even if they are several years out. I’d love to hear from you. And, if you know someone needing my services, please pass this along. Thank you.
Danita Kulp is a broker with Kulp & Company (DRE #00922181) who has been selling real estate since 1981 (www.successfulhomes.com). She works with both Buyers and Sellers, both in and outside the City, and can be reached at (415) 637-5823 or kulpofca@aol.com.