Fall can be the best time to buy a home!
The below is directly quoted from a recent article written by our favorite local real estate economist, Carole Rodoni. She comes from a long, successful background of Bay Area Real Estate and has been through many, many real estate cycles. She is the empress of a major Real Estate empire and knows this market better than ANYONE. We wanted to share her sage advice here.
How is the real estate market doing mid-year?
"The numbers just came out showing prices are down 1.4% month over month but still up 4% from a year ago. Inventory is still scarce at 2.6 months and the average price is around $700,000, just 4% shy of the all time high.
So what does this all really mean? First the numbers bundle the whole market in into one group and what we really have is a fragmented market-entry level, middle tier and high end. Looking at these pieces paints a very different picture.
- The entry level market is still very active with multiple offers and prices that continue to rise.
- The middle tier is steady with prices holding and is a hybrid market, one between competitive and negotiating.
- As for the high-end, this is the market that has adjusted the most. Here, prices are declining slightly and days on the market are getting longer.
By year end, the entry market will be up in value 5-8%, the middle tier will hold steady with last year's prices and the high end will be 3-5% down in value from last year.
Thus we ask-is there a bubble?
The answer is not a bubble the way you define the bubble of 2006. Today buyers need to have cash or qualify for a loan, prices are holding steady and we still have a demand that exceeds supply. In addition, interest rates remain low, which helps buyers afford the high prices here in the San Francisco Bay Area. Also, there are affordable areas-in San Francisco, price per square foot is over $1,000 but if you go into the east Bay like Antioch, Livermore, Vallejo, Alameda, etc., you can find property in the $300 per square foot range.
Is this the right time to buy real estate? What time could be better? Interest rates are low, prices are holding in most markets, there is still appreciation and real estate is an asset that right now is very desired by all age groups. In addition, by 2040, it is projected that there will be 2.1 million more people in the San Francisco Bay Area creating 1.1 million more jobs. Add to that the fact that san Francisco is an international city known around the world, the Bay Area is the gateway to the Pacific Rim, that we have Silicon Valley, Stanford and the University of California plus climate that is the envy of most, economic opportunity, cultural diversity and valuable land--what more could anyone ask for? So of course, the time is right.
So rest easy; the market has rebalanced a bit but here we are not going into another recession or a big dip in the market. Here you have to keep an eye on the various segments of the market-entry versus mid tier versus high end. That is the indicator on when to buy and how to sell.
The specifics matter: the general market is alive, healthy and doing just fine."
Did you know that San Francisco is the nation's first city to require solar panels be installed on all new buildings that are 10 stories high or less? This new requirement was passed with a unanimous vote by the San Francisco Board of Supervisors in recent weeks.
“By increasing our use of solar power, San Francisco is once again leading the nation in the fight against climate change and the reduction of our reliance on fossil fuels,” Supervisor Scott Wiener, who is sponsoring the legislation, said in a statement. “Activating underutilized roof space is a smart and efficient way to promote the use of solar energy and improve our environment."
The law makes it mandatory for all new construction to have a minimum of 15% of rooftops 'solar-ready', which means they aren't shaded and as such can capitalize on the maximum effects of solar panels. Thought the rule doesn't go into effect until January 1, 2017, but buildings still under construction will have to add panels retroactively if their aren't already installed or in the plans.
Smaller California towns like Sabastopol and municipalities in the Central Valley have already enacted solar panel requirements in keeping with the green movement toward achieving zero-energy buildings.