The most talked about topic at any backyard BBQ, school event or cocktail party, and the one question I get asked waiting in line at Whole Foods is always “How’s the market?”
The short answer is the market is indeed booming and breaking through record price ceilings. Year-to-date, Southern Marin is experiencing flat to slightly negative growth in overall sales transactions, and residential property prices are up 5 to 15% depending on the location and condition of the property. I tell my clients their best strategy in this kind of high-speed, low-inventory market is to stay up-to-date with the specific market statistics and remain focused. For buyers, be ready to write an offer quickly. When you see “the one” you want to be ready to act. But with any hot trend, some interesting urban myths start seeping their way into the storyline, tainting opinions. Below are a few FACTS vs. FICTION about our current market you need to know.
—It is the hottest market ever in terms of record pricing.
In our weekly sales meetings, some of the Bay Area’s top producers remind us that we have entered the “unknown territory” in regard to pricing. In some markets there is no comparative sale so the sale price will be what the market bears.
—There is serious talk about rising interest rates.
What does this mean? Well, for first-time buyers, just a .25 percentage point rise in the interest rates translates into a higher monthly payment, so they can suddenly find themselves priced out of a property that was affordable at today’s rate.
—This “bubble” is markedly different than “the other one” of recent memory.
This time, all-cash buyers are making an ever-growing presence in the market — and it’s not just Facebook and Twitter money. The Bay Area continues to attract emerging tech companies. Venture Capitalists and the international investor community are packing their bags and moving here in droves, too.
—The market is so hot, and so lacking in inventory, I don’t have to stage, or upkeep my property to sell it.
Not true. In fact, the very few properties we’ve listed that did not attract the desired offer were the ones that weren’t painted and staged. People have a hard time visualizing what they can’t see. Many buyers are unfamiliar with costs to remodel or update, and the unknown element of what it takes to refinish floors, paint or update a bathroom or kitchen is sometimes enough to scare them away. Need even more proof that staging works? I don’t have a single story of a properly staged property that didn’t convert to a sale.
—Properties are selling in less than five days.
Not true. Well, not all of them. In fact, of properties sold this year, only about10% of the properties in Southern Marin and 15% of those in San Francisco closed in less than five days. A fast close can be the thing that puts a buyer in the winning position. However, a 14-day close terrific and a 21-day close acceptable.
—I’ve set up both Trulia and Zillow property searches and auto email alerts, so I won’t miss a thing.
Not true. 1 out of 5 transactions are “off-market” trades. If you weren’t connected with a realtor who is actively searching on your behalf and connected to the realtor listing those off-market finds — you never had a chance.