South San Francisco, CA November 6, 2019 by Dee Molina, KW Realtor
PREFACE: Everything South City welcomes Dee Molina to our team as our Real Estate reporter, as she offers insights into the local market.
When will the bottom fall out???
According to our Real Estate mentors that study and educate Realtors to react to the current markets are telling us that the Recession of 2020 is coming, most likely in 2021 and it will NOT affect the low to mid-range priced homes in San Francisco, San Mateo and Santa Clara Counties. It appears that homes under $1.3 Million average values will not drop and this will be our new norm in our area. The new low-end prices may rise to $1 Million easy, yep even for a fixer! I know that doesn’t sound very good to Buyers (plan for this number as your minimum). I know those that are looking forward to their retirement dates and looking to sell and move to that retirement community of your dreams are thrilled about this news! But don’t get too cocky! Prices will vary between neighborhoods, condition and schools. And, your agents’ approach to your marketing and strategic pricing. It can backfire if you are not realistic about your homes’ value. If you price too low, you are misleading many buyers and the trust depletes as they compare you to others… and know that buyers today are very savvy. Or if you price too aggressive, you will sit on the market until you find yourself lowering to the fair market value. Choose your agent and your strategy wisely.
But, for those Buyers… make sure you are extra prepared to buy. Here is a good checklist to follow before you take that plunge in a recession economy.
- Pay off all debt
- Do not make any purchases by credit at all.
- Be sure your job is secure and the company you work for is stable and will not be considering layoffs temporary or otherwise. Ask them.
- Save at least 5% of your proposed Purchase Price and then another 20% to add to your down payment to avoid PMI with some Lenders. This will save yourself a few hundred dollars per month. But if you are in a hurry to buy then about 10% will cover your FHA or Conventional Loan and closing costs.
- Don’t settle just to be in the area that you wish you were in but can’t afford it. Sometimes it’s better to go a little further and get that bigger home then get one that you will grow out of in a year. Know what you want and plan your approach.
- Lastly, do not just buy the home without proper inspection. Look beneath the facelift. Many times, these flippers or Sellers are only updating the cosmetic aspect of the home. But the real meat and potatoes of the home are your Roof, Plumbing, Venting, Electrical and your foundation. So after you are paying that Million dollars, is the home in ill repair and do you have the reserves to fix it?
According to the last review, see this link: http://peninsulahomesupdate.com/local-stats/south-san-francisco/ We are maintaining 30-40 homes per month both Listing and Selling as an average. This is the sole reason why prices are still strong. Until the supply is more than the demand, the prices will continue to maintain it’s 3-5% increase in value per year. The higher priced homes over $1.5 million are starting to see longer days on market and showing price decreases. South San Francisco is the median priced home that is still considered affordable in consideration of other San Mateo County cities… just move on South and you will see the prices rise… Sunny, more desirable schools and other attributes. Our median prices are hanging right around that $990K… the only thing affecting this number is the number of affordable condos in the city. The only thing keeping the numbers at the level they are is the average Days on Market has increased from 14 – 30. This number has doubled for only one reason. Sellers are listing too high for the current buyer market therefore the Listing prices tend to reduce and then get purchased.
Here are the 25 current active and 25 current pending & Solds (as of October 1, 2019) single family or Condos on the market for South San Francisco. As you can see from this list, all the overpriced homes of over 20 days to prove the concept that just not anything sells in this market. Educating Sellers is important to a swift and hopefully painless sale. There are no homes offered in South City for under $848 thousand. I can guarantee you that none of the 4 bottom sellers are looking to get asking, they are hoping for $1 Million and it might even be their goal or strategy. The only thing that would bring an asking price is that is needs work or in a very undesirable neighborhood due to school ratings.
The fact that there are homes on the market longer than 20 days is that if the Seller is motivated, they will eventually entertain all offer or reduce their price. This gives great opportunity to those Buyers to put in offers less than asking. If they have no rush to sell, it will eventually be taken off the market until they become more motivated.
The market has changed, and change is good. The foreign money has slowed to a raging halt due to the current climate with China. https://www.nytimes.com/2019/07/21/us/politics/china-investment-trade-war.html and the “Cash is King” market of a few years ago has gone away. Now a Buyer with a loan, can finally compete in the market and getting accepted on the Buyers terms. Homes are being accepted with contingencies. Crazy I know, although all homes are sold “As Is”, even in this climate of low inventory, the Sellers are not seeing the way over asking, unless the home was listed at an extremely low strategic price… although you know that is the benefit of the Agent to list a home and then market that they received $100K more than asking, well yeah… the listed it $100K under value. Don’t get fooled by the hype. You can write an aggressive offer with contingencies, but still the market isn’t budging for out of pocket expenses from the Seller, unless it is mandatory repairs prior to sale. The recession coming is what we will call a market adjustment… cause by the current political climate. I don’t like to see people hurting with recessions because it hits the people that can’t bounce back quickly. But, change is good. With each cycle change, it allows opportunities for all parties to Sell, or Buy at a fair market value with fair market terms.
Sellers are still in a positive market simply because the low inventory. Values are holding, and in some cases increase by a tad, but nothing like last year. We are only seeing 3-5% value changes… with means we are heading to that normal market. If the recession affects Real Estate, it may in a few years, but not while the inventory looks like this. If an impactful recession comes, it will affect low income and renters more than the homeowners. If there are layoffs, the opportunities may be in other states with better homeowner opportunities. The number in people leaving California are growing each year due to the cost of living, price of housing. The one beautiful constant about our beautiful County is that we are a Hub of the future, we still have old money and we have an abundance of new money.
My advice? Pay off those debts, keep your credit and liquid cash at a comfortable level and always pay your future self, right after you pay those present bills. If able, plan your back up for personal items, water, food and energy for any upcoming life challenge. Preparedness for the future is key to comfort.
If you are looking to Sell and would like to get an expert advice on pricing and join me at our Monthly Sellers Workshop. If you are looking to buy and would like to attend my Monthly Buyers workshop where you can learn about the programs out there, credit repair experts and myself to show you the process of a purchase. Text me at 650-544-4854
The new approach to soliciting for many agents is direct dial apps… like Slydial. These send video messages, text messages or voice mails or even auto dial until someone picks up! I personally do business face to face or referral but never to load up someone’s cell phone with unwanted soliciting and only call those who have entered my Open Houses and registered on my Website https://deemolinasellinghomes.kwrealty.com/ .
If you would like report and fine such culprits add your number to the do not call list. https://www.consumer.ftc.gov/articles/0108-national-do-not-call-registry.
Also, there are spam apps to hopefully help avoid these pesky calls here is a site for the best robocall apps. https://mashable.com/roundup/best-robocall-blocking-apps/
Active Listings as of 11/6/2019
A little about me!
A local since birth, having been born in San Francisco, raised in Daly City, and now reside in Brisbane. I am celebrating my 15th year of serving my clients in Real Estate. I have been both, an employer, and an employee, but with any position, my focus continues to be on creating relationships, marketing, educating, negotiation and contracts. And most definitely why I enjoy my career in Real Estate because I can use most of my talents around every corner!
I have sold vacant lots, commercial, investment properties, luxury properties and your unique home from Northern California to Southern California. I hold a Certified Master in Home Value and Marketing. I currently hold my license at Keller Williams – San Mateo Office who excel in technological updates, to market change strategies, and new contractual requirements, which hold all parties accountable for their part in any transaction.
When I am not engaging with people in Real Estate, you can find me spending my time with family, enjoying times with friends, listening to live music, or catching the newest movies at the big screen. Or, doing one of my two favorite activities; walking with my friends or by the water with my toes in the sand… traveling!
Contact me if you would like to learn more!
Phone/text 650-544-4854 Email: firstname.lastname@example.org
Dee Molina BRE# 01422710 Keller Williams – San Mateo Office BRE#01906450