San Francisco Real Estate: Escrow Out Loud
#38: April Market Update
Prices are up, volume is down, buyers are exhausted and sellers are...? A smaller pie can cause some awful table manners, and all of this is causing some agents to behave very badly indeed. Welcome to this week’s episode of Escrow Out Loud, our San Francisco Real Estate podcast.
[00:20] House prices continue their rise in 2018. The median sale price has doubled since 2013 and now sits at 1.61 million dollars. Doing the math, this means that in order to afford a mid-priced home in SF one needs to have a down-payment of 300k and an annual income of about $300,000. However. Let’s not forget that in the current market a 20% down payment regularly gets beat by much larger down payments or all cash offers. This is a difficult market for buyers. So difficult in fact, that we know at least one agent who currently only works with sellers.
[03:08] So, what is some advice we can share? Most importantly, be realistic, and do not engage in magical thinking! That reminds us of one of our previous episodes: Opportunity or Offal, Off-MLS Sales in San Francisco. Buying a home is a very personal, emotional journey. It is understandable for buyers to want to fall in love with, what will potentially become, their new home. But in this market, the competition is fierce and sometimes there will be disappointment. So, try not get too attached.
[06:26] With properties always selling for figures well above the asking price. What is the right way to price properties? If the advertised price is set artificially low, trying to guess what that real figure will be can be infuriating. We discuss the arguments for pricing realistically vs pricing for an assumed markup on the advertised price.
[10:30] This is one of the great things about being a team, where agents can have an honest conversation about listings and offer an additional perspective when trying to gauge property values. This brings us to our next point and this is one we have dedicated a previous podcast episode to: Agents Behaving Badly. With so many sellers leaving and there being a limited amount of business to go around at the moment, agents are perhaps engaging in behaviors they wouldn’t otherwise. An example of this are pre-emptive offers. Do we have to present all offers if get them? Find the answer to that question in Ep15: Discriminating Sellers: Sell Only to Short People or Offers Anytime? This also ties into the Agency Disclosure episode.
Thank you for joining us for this week’s episode. We hope you enjoyed tuning in and join us again next week for more San Francisco real estate stories!