The McGuire Roundtable Questionnaire – Round #2 –
1. How was the start of the real estate market at the beginning of this year? What is your outlook for the rest of 2007?
TT: The first quarter of 2007 has been relatively slow due to a lack of inventory. However, now there are a lot of buyers out there. I have buyers who were reluctant to get in the market last year due to media reports of a bubble in the San Francisco real estate market; who now have confidence in the economy and the local market, realizing that the media reports regarding “The Bay Area Market” are not specific to the SF market.
MH: Yes, the year started on a slow note with little available inventory which in turn promoted a very brisk moving market place. It looks like buyers who were watching the market from the sidelines last year are now back in the game, actively pursuing properties. I predict inventory levels to increase and activity to be quite strong for the remainder of 2007. 2006 was much more susceptible to the market correction which began at the end of 2005. It marked a relatively new cycle at that juncture. This year, both San Francisco and the Peninsula show activity that is very typical of the pre-correction market of 2005. It’s a very good market.
MK: Right, throughout 2006 SF was supply-constrained, and the start of 2007 is still the same. There are more buyers than available properties now.
RC: Even though the market was a little slow toward the end of last year, I think that because of low interest rates, hi demand and lack of inventory, 2007 has started out strong. I believe that this will be a very good year for both buyers and sellers.
MD: Agree, 2007 started out and continues to be active and balanced between buyers and sellers. San Francisco is blessed to be well represented by the most active segments of the economy, notably the technology and financial fields.
BS: The market in just the last few weeks has been very active, many properties that had been languishing have sold and several have been getting multiple offers; of special interest have been the sales of multi million dollar homes.
2. What SF neighborhoods and Bay Area locations are active with buyers? What do you notice about these locations or properties?
MD: Most all San Francisco neighborhoods are active with buyers, particularly our prime neighborhoods, such as Noe Valley. Even though the number of sales has decreased moderately in most neighborhoods, prices have continued to increase. The properties receiving multiple offers are most often those that have been updated, remodeled and professionally staged.
TT: The demand in Noe Valley and Bernal Heights is quite high with buyers writing aggressive, competitive offers. Also, other prime locations like Pacific Heights and Presidio Heights are selling quickly in the $2-$4MM range. The inventory of these properties are scarce prompting agents to phone sellers and other agents in an attempt to place buyers into properties sold off market.
BS: True, prime locations are very active, but it seems that almost any part of SF is prime real estate. With the increase in gas prices and increased traffic congestion many buyers are giving up the idea of a suburban home for the city.
MK: Yes, it seems that all San Francisco neighborhoods are receiving buyer interest.
RC: Also, any property that is priced right and marketed well will find the right buyer.
MH: Also, the Peninsula, like SF, has been very active lately, especially around the $1MM mark. Historically sought-after neighborhoods such as Burlingame, San Mateo and San Carlos are very active with families wanting that lifestyle as well as the benefits of the excellent & well established school systems for their children. In SF, South Beach, Potrero Hill & the Inner Mission are very active with buyers wanting to enter the market place and enjoy the lifestyles that these neighborhoods offer.
3. What advice would you give to buyers who are still looking at properties this year, but have been reluctant to get into the market?
BS: Don’t wait, act now!
MD: Or, buy something! Interest rates aren’t going to drop significantly and qualifying for loans will only become more difficult due to the fallout in sub prime lending. If you are buying in San Francisco, there is very little, if anything, to be gained by waiting. If you are buying in the prime areas, there is nothing to be gained by waiting.
RC: Walt Whitman said, “Land is a good investment, they are not making anymore.” Unlike other cities, there is no land to build new homes, high demand and lack of inventory. If a buyer is reluctant because they are betting that the prices of homes will go down dramatically over time, I think they are making a mistake. If a buyer is ready financially, now is a good time to buy because just like NY, Paris or London, San Francisco is an international city that attracts buyers from all over the world.
TT: Yes, not only residents want to buy and live here but so do buyers from the international market place, as well as 2nd, 3rd and 4th home collectors vying for properties in our world class city for long term holdings. The key is to find something you love and get into the market and start building equity and taking advantage of the tax benefits. A buyer should purchase a property with the intent to stay at least 3-5 years.
MH: I even think as long as 5-7 years. It is better to enter the market now rather than waiting. While other areas lose value, the Bay Area remains strong. Real estate, no doubt, is a long term investment with many long term opportunities including appreciation. Unless a buyer participates in the market, there is no possibility to take advantage of the benefits the market offers.
MK: To sum it up, get into the market now!
4. What should potential sellers or buyers look for when choosing a real estate broker or agent?
MK: An agent who can maximize their selling price when selling and get the lowest price and the best terms on the buy side.
MD: Someone who can create opportunity, reduce risk and build wealth for their clients.
MH: They should look for someone that they have a good rapport with, who knows the market inside and out and is active in the real estate community. For sellers, someone who knows how to properly market and expose their property; someone with a long term track record, and also someone that comes to them highly recommended.
TT: Perception, sense of timing and the ability to negotiate and close the deal. A good listener who understands client’s needs and desires. Market knowledge is critical for correct pricing suggestions for sellers. Intuitive, sound and constant up to date market information to assist buyers in writing competitive winning offers.
BS: Experience, experience, experience! I have been selling property in San Francisco for over 31 years and as a result I have been rewarded by having my former clients not only return but by having them send their friends and children to me.
RC: A seller needs to find the agent that will go above and beyond everyone else in marketing the property aggressively. A good seller’s agent’s goal is to sell their property for the highest price in the shortest amount of time with the least amount of inconvenience to the seller. On the other hand, a potential buyer needs an agent who knows the current pulse of the market and will advise the client with the information he or she needs to make the most intelligent decisions.
5. Is now a good time to buy a home and why?
MH: It is always a good time to buy in San Francisco and/or the Peninsula. We are confined by water on three sides and there is only so much land available. This area has always been sought after for all the wonderful things it has to offer.
RC: If a buyer is going to buy a home as a primary residence, now is the time to buy. Unfortunately, I have seen people wait too long to buy and literally rent themselves out of ever buying in San Francisco.
MK: My answer is in the same vein as Warren Buffett would answer concerning the best time to invest in the stock market. He doesn’t worry about the ups and downs in the economy or stock market. Home buyers should focus on buying the best home for their needs and budget and not worry about timing.
TT: Now is the time to take advantage of what are still historically low interest rates which will afford a buyer more house now. By waiting you will have missed the opportunity to build equity and to take advantage of the tax benefits and the pleasure of owning of your own home.
BS: I agree, is a great time, this market is starting to rise and my experience has shown me that it will continue to do so. We had a flat market but this has changed in the last few weeks.
MD: Buy now and be one of the people who say “I am so glad I purchased my home when I did…” instead of “I could have purchased this house for $300,000 to $500,000 less it’s worth today…” We are an international city and compared to Tokyo and London, San Francisco is a bargain.