Thursday, July 24, 2008

Weekly Sales Report

It is the time of the cautious buyer. People gear up to go out and look at houses, but are wary of entering a real estate market amidst a suffering economy. Nobody argues with the old "buy low sell high" philosophy, but the question is when to get in. I read an article called Housing Rebound: When to Spot One. They talk about the importance of following local data, and comparing year over year statistics rather than comparing this month to last month, as there are yearly cycles.

It is also very important to look at the numbers for sales volume as well as price. Let's look at June for example. According to DataQuick, there were 633 homes sold in San Francisco last June compared to only 571 homes sold this year. That shows a decrease of 9.8% in number of sales. The median price that San Francisco had been holding on to for so long is also showing a decrease. In June of 2007, the median price in San Francisco was $825,000, compared to a median price of $726,500 this June, a decrease of 11.9%.

To take the advice of looking at local statistics even one step further, when you are looking to buy or sell in San Francisco, or anywhere for that matter, you need to do price comparisons for other homes in that specific neighborhood. City wide statistics won't even necessarily apply. There is a great graph also found on DataQuick's website with the same statistics broken down into zip codes. There are some zip codes whose volume and sales activity go either up or down together, but others show interesting differences between sales and volume changes. One of the largest differences is in 94133, which is located in the very north eastern corner of the city around North Beach. While the sales volume plummeted in that area almost 40% in June year over year, the median price went up almost 60%. If you live in Noe Valley and are thinking of selling, 94114 shows a decrease in sales volume of just over 10%, but an increase in median price of 18.3%.

The moral is to look at not only local data, but the neighborhoods surrounding your house or the neighborhoods you are looking to buy into. Have a Realtor help you compile the data.

We have already looked year over year; now for our weekly report. Number of sales was low, but the number has stayed consistent throughout the month. This week, almost half of the sales were reported coming in under the asking price. The big success story of the week is a purchase at Radiance, one of the new developments in Mission Bay. One of our agents represented the buyer in a purchase there, and was able to negotiate the price down $150,000, as well as an additional $25,000 in concessions. There is a lesson in this as well. Technically, you can walk into any of these developments by yourself and purchase a unit. You do not need representation; actually they prefer that you do not have any as they stand to make a higher profit that way. However, as you can see, we will negotiate for you. We have a strong agent network and we talk to each other about what kind of deals people are getting, and where they can be found. What doesn't cost you a dime to begin with can save you a lot of money in the end.

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