San Francisco and Marin County have low inventory, just not that many homes for sale and the competition is fierce. Home sales and buyer interest is up in July and we expect this to continue for the year.
There is some hope for the real estate market. According to a report published by the Commerce Department the number of homes purchased in May of 2012 was the highest number in over two years. The number of purchases increased from April to May by 7.6%. That number is the best increase since April of 2010 when the tax credit for purchasing a home was still in effect. That's true nationally and especially true in San Francisco and the Bay Area's strong economy. San Francisco rents are out of sight.
Areas of Highest Growth
The places that saw the largest increases were the South and Northeast. The number of homes purchased in the South grew by 12.7% while the growth in the Northeast was 36.7%
Although the total number of sales across the country seems to be off pace from the 700,000 transactions favored by economists, the market is showing other signs of improvement.
San Francisco and Marin are high end markets and will differ from the national statistics
but the trends are very encouraging.
Strong Signals from the Market
First and foremost, builders have begun to increase production. More construction is always a positive sign, no matter how small the increase. Second, interest rates for mortgages are still at historically low levels making it easy to afford a home. It's important to be qualified for a mortgage and that's more difficult these days. Third, and this is important too, is the stabilization of home values. Most regions around the country have noticed home values finally holding steady. All of these factors have lead to people buying up existing homes, paving the way to build more properties.
As San Francisco and Marin are "built out" we don't see much new home construction but there are some interesting multi-unit projects. Luxury condos might make sense for many homebuyers.
More than Just Statistics
The main reason why economists and financial analysts pay so much attention to construction comes from their overall economic impact. Building a new home or remodeling an existing home normally produces about three new year-long jobs. It also leads to an increase in taxable revenue by an average of $90,000. Although new homes are only 20% of the entire housing market, the numbers above show how constructions helps the economy thrive. San Francisco has a strong economy, especially in the creative and high tech fields. New people filling new businesses will need a home.
Supply is Down
At the end of May it was reported that a total of 145,000 new homes were on the market throughout the entire country. Based on current sales numbers the market should go through the existing inventory of new homes in about 4.5 months nationly and even less in the Bay Area. Economic experts feel that a 6 month supply of new homes keeps the economy healthy, but who wants that commute. With a lower than average supply it is possible that home prices could go up simply because demand will be higher.
Prices Already Higher
Speaking in general averages, the price of a home bought in May of 2012 was down ever so slightly from the average price in April. However, when looking at sales from one year ago shows that average prices have gone up by 5.6%. We are seeing bidding wars again so be prepaired. Be sure to find a good agent with a good company who can greatly improve your chances and respect your time.
Find the agent you will like and trust here:
North Bay Homebuyers
There is some hope for the real estate market. According to a report published by the Commerce Department the number of homes purchased in May of 2012 was the highest number in over two years. The number of purchases increased from April to May by 7.6%. That number is the best increase since April of 2010 when the tax credit for purchasing a home was still in effect. That's true nationally and especially true in San Francisco and the Bay Area's strong economy. San Francisco rents are out of sight.
Areas of Highest GrowthThe places that saw the largest increases were the South and Northeast. The number of homes purchased in the South grew by 12.7% while the growth in the Northeast was 36.7%
Although the total number of sales across the country seems to be off pace from the 700,000 transactions favored by economists, the market is showing other signs of improvement.
San Francisco and Marin are high end markets and will differ from the national statistics
but the trends are very encouraging.
Strong Signals from the Market
First and foremost, builders have begun to increase production. More construction is always a positive sign, no matter how small the increase. Second, interest rates for mortgages are still at historically low levels making it easy to afford a home. It's important to be qualified for a mortgage and that's more difficult these days. Third, and this is important too, is the stabilization of home values. Most regions around the country have noticed home values finally holding steady. All of these factors have lead to people buying up existing homes, paving the way to build more properties.
As San Francisco and Marin are "built out" we don't see much new home construction but there are some interesting multi-unit projects. Luxury condos might make sense for many homebuyers.
More than Just Statistics
The main reason why economists and financial analysts pay so much attention to construction comes from their overall economic impact. Building a new home or remodeling an existing home normally produces about three new year-long jobs. It also leads to an increase in taxable revenue by an average of $90,000. Although new homes are only 20% of the entire housing market, the numbers above show how constructions helps the economy thrive. San Francisco has a strong economy, especially in the creative and high tech fields. New people filling new businesses will need a home.
Supply is Down
At the end of May it was reported that a total of 145,000 new homes were on the market throughout the entire country. Based on current sales numbers the market should go through the existing inventory of new homes in about 4.5 months nationly and even less in the Bay Area. Economic experts feel that a 6 month supply of new homes keeps the economy healthy, but who wants that commute. With a lower than average supply it is possible that home prices could go up simply because demand will be higher.
Prices Already Higher
Speaking in general averages, the price of a home bought in May of 2012 was down ever so slightly from the average price in April. However, when looking at sales from one year ago shows that average prices have gone up by 5.6%. We are seeing bidding wars again so be prepaired. Be sure to find a good agent with a good company who can greatly improve your chances and respect your time.
Find the agent you will like and trust here:
North Bay Homebuyers
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