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San Francisco Home Prices Fell for the First Time in Four Years in March

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Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#61

Post by gedy »

tortilla wrote: post #52
ryanSrich wrote: post #43

It's always hard to believe the numbers, but I trust Redfin since I used them to purchase my home. I think the problem is comparing what's turn key and not. For example they say: > Portland, OR had the nation’s highest price growth, rising 16.1% since last year to $325,000... The problem is you're fighting 100's of people for that one house in Portland that is livable at $325,000. Most houses that cheap need a ton of…

A bit off topic, but how was your experience with Redfin? I'm thinking of using them.

I used them and it was excellent - exactly what I'd want as a tech-comfortable person. It's not the best for people who want a person to meet with in person or talk to frequently on the phone. Also note that Real Estate agents on the other end of the transition can be a bit annoyed by you using RedFin.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#62

Post by aetherson »

tortilla wrote: post #52
ryanSrich wrote: post #43

It's always hard to believe the numbers, but I trust Redfin since I used them to purchase my home. I think the problem is comparing what's turn key and not. For example they say: > Portland, OR had the nation’s highest price growth, rising 16.1% since last year to $325,000... The problem is you're fighting 100's of people for that one house in Portland that is livable at $325,000. Most houses that cheap need a ton of…

A bit off topic, but how was your experience with Redfin? I'm thinking of using them.

I'm not the previous author, but I bought my home (in SF) with Redfin about 2.5 years ago, and our experience was very good. It felt to us like all the good parts of having a real estate agent and none of the bad parts.

We wanted to just browse a webpage for homes ourselves, though (and then have someone help us evaluate and make an offer on them). If you want someone to go out and find houses and offer them to you, it's not the service for you.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#63

Post by pascal1usa »

ryanSrich wrote: post #43

It's always hard to believe the numbers, but I trust Redfin since I used them to purchase my home. I think the problem is comparing what's turn key and not. For example they say: > Portland, OR had the nation’s highest price growth, rising 16.1% since last year to $325,000... The problem is you're fighting 100's of people for that one house in Portland that is livable at $325,000. Most houses that cheap need a ton of…

Yup. And, as vc dollars start drying up and companies get pressure to become profitable again, employers will figure out where to go: out of San Francisco.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#64

Post by Domenic_S »

smitherfield wrote: post #60
avn2109 wrote: post #15

Earlier quoted context omitted.

From the article: >> "...historically low inventory" >> "...many sellers are sitting this year out." >> "...The median sale price ... fell by 1.8 percent..." The article's authors are confused. Their explanation for falling prices consists entirely of "Supply is down." That's exactly the opposite of how supply, demand, and prices are related. If they wanted to claim that low prices are scaring sellers out of the mark…

With very illiquid assets, like San Francisco real estate, it's often not so much how high or low prices are but whether the market even exists.

Indeed, but supply & demand says that less inventory in an otherwise normally-operating market should see prices increase. Yet, price-to-list is It's hard to know what that means. Are sellers pricing the low-inventory situation into their list price and then only getting a fraction of that markup? Does the inventory suck, meaning lenders won't even finance it, thus reducing the price? Are all-cash offers at the $1mm+ price point so tempting that sellers are giving up 8%? Are buyers just giving up?

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#65

Post by jonnathanson »

ryanSrich wrote: post #43

It's always hard to believe the numbers, but I trust Redfin since I used them to purchase my home. I think the problem is comparing what's turn key and not. For example they say: > Portland, OR had the nation’s highest price growth, rising 16.1% since last year to $325,000... The problem is you're fighting 100's of people for that one house in Portland that is livable at $325,000. Most houses that cheap need a ton of…

"SF on the other hand is just seeing their ceiling come into play. Only so many people can justify raising a family and purchasing a home in The Bay. Why not change jobs to Seattle or Portland and make around the same money, but spend half on a house? I think that's what we're seeing."

It's more than just tech workers. SF real estate prices have been influenced significantly by foreign speculation (especially from China). As the Chinese market slows down, so too does speculative offshore real estate investment. And these were buyers with virtually unlimited purses, ready to drop all-cash well north of asking prices.

(Full disclosure: I own a modest condo in SF, and when Chinese speculation was at its frothiest, I would get hand-delivered letters from real estate agents on more or less a quarterly basis. They would state that XYZ buyer in China is willing to purchase my property, sight unseen, and they would ask me to get in touch if interested.)

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#66

Post by Domenic_S »

deegles wrote: post #54
epimetheus wrote: post #14

A bit of an anecdote because the article mentions my town specifically - Tacoma: We put our house on the market Friday, April 8th, a bit below the "redfin estimate" - I saw it had gone live by 11am and we already had an interested party set up a viewing by 12pm. We showed the house 11 times by Monday morning and had 5 offers, some 12k above asking price. We accepted an offer by Tuesday (April 12). My head is still sp…

Out of curiosity, do you know how many of your offers were from foreign nationals? I've seen some articles talking about how overseas investors are driving up property prices and was wondering if it was true in your case.

A different market, but I think the Chinese Money thing is a bit overblown.

The San Francisco and San Jose metro areas ranked ninth and sixth from the bottom, with all-cash deals representing only 28 and 24 percent of purchases, respectively. All-cash sales in San Francisco peaked at 36 percent in the first quarter of 2010, Zillow said.

http://www.sfchronicle.com/business/networth/article/All-cas...

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#67

Post by ASinclair »

avn2109 wrote: post #15
mdorazio wrote: post #2

The article seems to imply some meltdown in housing is around the corner, but it seems more like the housing market is just leveling off as a result of market forces. You can only drive home prices so high before there aren't enough people who can afford them anymore. Hopefully that means that rent prices will also level off in the area in the near future.

From the article: >> "...historically low inventory" >> "...many sellers are sitting this year out." >> "...The median sale price ... fell by 1.8 percent..." The article's authors are confused. Their explanation for falling prices consists entirely of "Supply is down." That's exactly the opposite of how supply, demand, and prices are related. If they wanted to claim that low prices are scaring sellers out of the mark…

> That's exactly the opposite of how supply, demand, and prices are related.

Just add in a dash of human behavioral economics.

There's a pretty strong narrative that the process of buying in the Bay Area is intense and demoralizing. There's only one winner in each of these bidding wars and many losers. At some point the losers may get fed up and stop looking. They'll also tell their friends and family how awful it was to look for a place.

Note, this is all speculation on my part. I am nowhere near an Economist just someone living in this depressing home/rental market.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#69

Post by wyldfire »

gedy wrote: post #61
tortilla wrote: post #52

Earlier quoted context omitted.

A bit off topic, but how was your experience with Redfin? I'm thinking of using them.

I used them and it was excellent - exactly what I'd want as a tech-comfortable person. It's not the best for people who want a person to meet with in person or talk to frequently on the phone. Also note that Real Estate agents on the other end of the transition can be a bit annoyed by you using RedFin.

What is it? Some kind of real estate brokerage service? It's not merely a research site like zillow or trulia?

EDIT: ok, it looks like it's a real estate agency that's salaried instead of commission -- err, scratch that, they take a less-than-industry average commission. Sounds a little disruptive.

Re: San Francisco Home Prices Fell for the First Time in Four Years in March

#70

Post by twoodfin »

djb_hackernews wrote: post #16
epimetheus wrote: post #14

A bit of an anecdote because the article mentions my town specifically - Tacoma: We put our house on the market Friday, April 8th, a bit below the "redfin estimate" - I saw it had gone live by 11am and we already had an interested party set up a viewing by 12pm. We showed the house 11 times by Monday morning and had 5 offers, some 12k above asking price. We accepted an offer by Tuesday (April 12). My head is still sp…

This plays out daily in hot real estate markets. I've been casually observing the Boston/Cambridge market and I have to scratch my head when I see properties on the market for only a few days and agents demanding offers by 2 days after the open house. Typically, I see listed on Thursday, OH Sat/Sun, offers due Tuesday evening. If I were a seller I'd think that we priced the property too low, then again I can imagine…

As mountineer22 points out, this is a strategy to concentrate serious offers and play them against one another. The lower you set the price, the more initial interest you get, the greater chance two or more potential buyers get excited. With competitive bids, you can find the true 'market' price pretty quickly.

In a hot market this apparently works well.

Anecdotally, when my wife and I were looking for our eventual home in Cambridge a few years ago, we went to more than a couple of "open houses" which were pro forma: Despite being listed on Wednesday, by Saturday the sellers already had an offer they were prepared to accept without even waiting for competitive bids!

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