Weekly Sales Report

It is time for a market update! The general consensus at our weekly sales meeting this morning was that San Francisco is now in a balanced market. That is what we have been reporting; it's just good to know that everyone agrees. In a balanced market, it really becomes property specific as to who holds the cards.

Another nice thing to report is that interest rates seemed to have gone down a bit. This morning a thirty year fixed jumbo loan was at 7% and in some places a bit lower at 6.875%. The gap between conforming and jumbo loans is closing, and once the dust settles we will probably see a half percent difference between jumbo and conforming instead of the full percent difference we have had lately. The reason for that difference has been because the jumbo loans are not guaranteed a buyer on the secondary market as conforming loans are with Fannie Mae and Freddy Mac. This makes the jumbo loans riskier for the lenders; thus they have been more expensive since the August credit crisis. As mentioned before, the dust will settle and we will see the pricing fall into place. The Federal Reserve is scheduled to meet again next Wednesday; let's hope for another decrease!

Statistics

There were 12 opened escrows this week. Six were multiple offer situations; that brings the multiple offers back up to 50% of all sales. The largest number of offers was received by the fixer featured in Beautiful Grand Edwardian on Monday, October 8th. They received 12 offers and the price went more than 10% over asking. The runner up was a two bedroom condominium in Potrero Hill listed at $699,000. They received 8 offers. The final price will be posted when it closes.

There were 8 closed escrows reported this week, six of which sold over the asking price. One sold under and the other sold at asking price. Not one of the properties that sold over asking went more than 5% over. It is intersting to note that even in multiple offer situations we are still not seeing a lot of the 20% over asking that we saw in past years. This is a good think to note for the sellers out there who are trying to price their homes. Stay closer to the range you are willing to accept. One of the properties that did sell at 5% over the asking price is this beautiful French Country Forest Hill home. The asking price was $1,295,000 and it sold for $1,361,000. It is a two bedroom two and a half bath home with over 2000 square feet of living space. I'm sure it helped that it had this wonderful garden designed by our very own Anja van Ditmarsch!

Meant To Be

It seems that life generally has its way of working things out. It is not always easy to see in the moment, but sometimes you just have to trudge on through and trust that clarity will find you. A bit too much for a simple thing like buying and selling houses? I don't think so. We talk a lot about the numbers; averages now versus then, when the market will bottom out, and when the best time to buy will be. The truth is, none of that matters in the end. Numbers only matter if you are buying and selling only for investment purposes. If you are looking for a home it is a completely different ballgame.

Buying a home is a very emotional process. There is a lot of money on the line, and you are looking for that unexplainable connection that makes you want to make a house your home. It is tough to find and once you do you can't always have it, especially in a market like San Francisco. You may be outbid, or somebody else gets there first, or you may simply not have a meeting of the minds with the seller.

Anja was hosting an open house earlier this year in Potrero Hill when a wonderful couple walked in and really seemed to fall in love with the house. Well, maybe one of them liked it a bit more than the other, but they spent quite a long time in the house and were so serious about it that they called in an architect to see if they could make a few changes without too much of a problem. They thought that with a few simple changes they could really turn the home into their dream house.

After talking to the architect, it seemed that the simple changes were not so simple, and not so cheap. Making the change would have thrown them way over budget, and buying it without making the changes would have sacrificed their vision for their home. Anja agonized over what to tell them because they did love the home; she was worried to tell them to pass it up for fear they wouldn't find another they liked as much.

In the end, Anja always tells it like she sees it, which is why our clients love her. She told them not to buy it, and she assured them that we would find something even better. She hung up the phone and we crossed our fingers. Timing was on our side. Just weeks later the perfect listing came up. I mean perfect! It was in the right neighborhood, the right size, the right floor plan, the perfect view! Did I mention the right price?! It was only a tiny step above the first one, and they would not have to change a thing. They were ready, and they jumped in head first. They had to compete with one other party, and after a day or two of negotiating they finally got it! We sat with them the other day on their wonderful sun drenched deck that overlooks the bay and had a coffee.Wow! It was really meant to be, and they couldn't be happier. You have to go with your instincts. Even more importantly, you have to trust ours!

Weekend Events

It really is nice to look ahead to the weekend and see all of the wonderful things San Francisco has to offer us. I will be featuring three separate events this weekend and will of course include an open house guide. I hope all you buyers were watching the news last night (doesn't matter which channel; they all seem to feature the same stories). They actually said it was a good time to buy! They even said that the bubble had finally burst, and the time to buy is now. They were talking about the bay area as a whole; I would venture to say that in San Francisco the bubble may have only deflated slightly, but the conclusion is the same; the time to buy is now! So get out there this weekend; have a great time, and look at some houses!

This weekend is the third weekend of San Francisco's Open Studios. They begin the first weekend in October and will end this year on the first weekend in November. Open Studios is a chance for the community to get to know the local artists; it is a chance to meet the artist and see their work in its own environment. This weekend, studios in Bernal Heights, Castro, Duboce, Eureka Valley, Glen Park, Mission, Noe Valley, and Portola will be open. This is a perfect opportunity to see houses and art in one day!

On Sunday, Bernal Heights will be hosting the 19th Annual Fiesta on the Hill! It takes place between 11:00am and 6:00pm on Cortland Ave and benefits the Bernal Heights Neighborhood Center. They expect 15,000 people who will be enjoying live music and dancing in the streets, a petting zoo and pony rides for the children, and lots more fun activities. If you are in the neighborhood, stop by these open homes on your way.

Also on Sunday, Portola will be hosting their fifth annual Portola Festival. It will take place between 11:00pm and 4:00pm on San Bruno Ave. They expect a crowd of 5,000 people who will enjoy live entertainment, bistro style dining, children's activities including bounce houses and petting zoos, and booths of local merchants. Portola is a neighborhood that you may not be quite as familiar with; it neighbors the Excelsior District on the west side and spans to Bayshore on the east side. It's northern border is Bernal Heights and Visitacion Valley lies directly south. It is mainly residential and is known among its residents for being sunny and quiet. Stop by the festival and have a look at these open homes to get a feel for the neighborhood.

Creative Financing

The phrase "creative financing" may scare people these days, but I encourage you to look at different scenarios when shopping around for a loan. Two general loan categories are fixed and adjustable, but within those two categories there are many different options.

A fixed loan is a safer option for the more conservative buyers as the interest rate stays the same throughout the life of the loan which is most commonly thirty years. Some lenders are offering forty year fixed loans as well. Another variation in this category is a fixed loan that offers interest only payments for the first ten years. That would make your monthly payments slightly lower for the first ten years as you would not be paying towards the principle. Fixed loans are the more expensive option meaning they come with a higher interest rate which makes your monthly payments higher.

Adjustable loans are loans that are fixed for a period of time and then adjust according to a preselected index. The most common are those that are fixed for 15 years, 10 years, or five years and then adjust yearly after that. The shorter the fixed period is, the lower the interest rate will be. People will use these loans if they are only planning to be in the home a short time, or if they want to increase their buying power; a lower interest rate will allow you to increase your purchase price.

There are other things to think about even within those two categories. One is a rate buy down, or paying points. Points are prepaid interest and are a percentage point of the loan amount. Let's say you have a loan amount of $800,000. One point would be $8,000. If you have an interest rate on a thirty year fixed loan of 7%, you can pay one point and bring that down to 6.5%. (each point does not reflect one percentage on the interest rate, only the loan amount) If you were to pay two points ($16,000), your interest rate would be 6.250%, and three points ($24,000) will bring you down to an interest rate of 6%.

The difference of paying no points and having an interest rate of 7% and paying three points and having an interest rate of 6% translates to about $500 less in monthly payments. If your savings is stronger than your income, this would be a perfect option for you. Check with your lender and see how this would work with your numbers. Also be sure and ask how long the buy down stays in place; it may be five or ten years; then the loan is re amortized over the remaining term.

With the market being at a balanced point and buyers having more room to negotiate, you can also request that the seller pays for the buy down. Also, if you are a seller and your home is sitting on the market, this could be something you offer to potential buyers.

This is why it is important to talk to a lender before you begin your search. They may have options you hadn't thought of which could affect your purchasing power. Also, you don't want to fall in love with homes you can't afford. Figuring out the financing is definitely the first step, and it is much easier to do with a professional. Let me know if you need referrals.

Weekly Sales Report

The subject of last Thursday's entry was staging, and in our meeting this morning staging seemed to be the theme as well. It is something I have been hearing a lot about lately. The reason is that properties, for the most part, are not selling themselves anymore. As Anja says, "A year or two ago you could have put crates in the house and it would have sold straight away!" That's no longer the case. At the moment, as you will see in the statistics, the majority of the properties that are selling are only receiving one offer, and the average days on the market is longer. True, it only takes one offer, but that one offer does not always come easily, nor does it give the sellers a good position for negotiating. We had gotten used to the sellers having the upper hand, but we are in a very balanced market right now. It is an equal playing field for buyers and sellers. Yes, the market has changed and softened. It has gone from completely out of control to balanced.

In the midst of the craze, you could put a sign up in front of a house and expect 5-10 offers. Now we must work to get it sold. Yes, folks, life is hard. It must be price correctly and marketed aggressively. It also needs to be presented in the best possible way which is where staging comes in. I am only following up on the story because we heard some pretty great success stories in our meeting this morning and I thought I would share one with you.

The best example was a condo on Clayton that had been on the market for seventy eight days. It came out at $1,080,000 and after a month on the market with no activity they lowered the price to $995,000. It sat at that price for another month with no activity, and the sellers realized they needed to make another change. They did not want to lower the price again, so they decided to pull the property off the market temporarily, have the place professionally staged, and put it back on at the same price. Guess what. It sold within five days. What the staging really did for the place was lighten it up and gave it a more spacious feeling. Also, the consensus was that it helped the condo appeal to a younger crowd; the owners had larger pieces of furniture with a more antique feel, and the staging made the place feel young and fresh.

When putting your property on the market in a time like this, you want to leave no stone unturned. Like I said, price it right, make sure everybody knows about it, make sure everybody sees it, and make it look great. Pricing it is something we help you do, making sure everybody knows about it and sees it is our job, and let's leave making it look great to the staging companies.

Statistics

There were 11 open escrows this week. Three of those received multiple offers. The most offers were received by a home on Morningside in the Lakeshore District. I know, you've never heard of it. It was priced at $1,035,000 and received five offers so it seems at least a few others are familiar with the neighborhood.

There were 7 closed escrows. Four of those sold under asking, one sold at asking, and two sold over asking price. The scale has tipped slightly in the buyers direction.

Avoid the Salesperson

When you walk into a retail store, you are often greeted with a smile and a hello from the salesperson. Quite often, the next thing you hear is, "Is there anything I can help you with" or "Let me know if you need anything". If you are like me, you avoid eye contact, head the other way, and flash the "I'm just looking" smile. This is all fine if you don't have a goal and you are in fact simply browsing for fun, but I've learned something lately.

If you are looking for something specific, even if you don't quite know what that is yet, the salespeople are actually there to help you. Maybe you are looking for a gift for somebody; you describe that person and some ideas you have, and they can help narrow down your options. At the very least they can steer you to the section of the store where you can find what you are looking for.

It works for anything: clothes, jewelry, even cheese! Next time you step up to the cheese counter and don't know what you want ask the person standing behind the counter what he/she would recommend. They will blow you away with their knowledge of cheese.

You'd better believe the same thing goes for house hunting. When you walk into an open house, the salesperson standing there is not only an expert on that house; they are an expert in the San Francisco real estate market. They know the neighborhoods and what it costs to live in each one. They are a resource for you and have the ability to help you find what you are looking for; even if you don't quite know what that is yet.

Weekend Events

Each weekend I talk about the open house schedule, because that is generally the way I spend my weekend. Last weekend I threw in a few other events that were going on around the city and I got a positive response. I think I may start a new series; The Weekend Events series. I will, of course, still report on open houses, but having an idea of what is going on in the city may help you in a coule of different ways. First of all it will give you an idea of what each neighborhood has to offer. Secondly, it will tell you what areas to avoid if you just want to look at open houses and don't want to bother with crowds and trouble parking. Thirdly, you could combine activites.

First for the real estate side. I was happy to see more properties hit the market this week; finally our buyers have new things to see. Hopefully that will continue through the next couple of months. The Chronicle lists 149 Open Homes for Saturday the 13th, and 941 Open Homes for Sunday, October 14th. Those are good numbers; they are up from last month. If at any time you want me to narrow that number down to fit your criteria, send me an email and I will get you a personlized open house list that includes only your neighborhoods of interest, price range, etc.

One neighborhood that will be extra busy today, Saturday the 13th, is Noe Valley as they will be hosting their annual harvest festival. This festival features costume contests, live music, activities for children, and a hayride down 24th Street! That's also a warning! If you want to do both, harvest festival and open homes, here is a list of what will be open in Noe Valley.

If you're up for a nice cold beer, you may want to find your way to Oktoberfest By The Bay! Head over to Fort Mason for your fix of German food, music, and dancing. Have a look at these properties that will be open in the Marina. Have a wonderful weekend!