Like many of us, you want to escape confinement and go for a walk… Time to explore your neighborhood, or even explore others… You have probably asked yourself: “and how much does this house cost? Will confinement drive down real estate prices in San Francisco?”.
Let’s chat with Isabelle Grotte, real estate agent of the Compass group, and get a market “snap shot”. What is valid in June 2020 may be obsolete in September, but for now, the housing market for single-family homes remains active, or even very active according to her.
Like everyone, Isabelle Grotte had not seen the shelter-in-place coming. Knowing the local market where she has worked since 2004, Isabelle knows that buyers look at the number of “days on market” as a selection criterion. As of the confinement order, she withdrew her entire portfolio like many other agents. During the first three weeks, it was difficult to know if we could go out, under what conditions, how the visits were going to be set up.
When the containment measure was first extended until June 1, she decided to take the risk and put the goods back on the market. Her assumption: life would go on, houses will continue to sell.
But beware, the days of 50 open house visitors is over.… Physical visits are possible but are strictly supervised according to a specific protocol. In addition, Isabelle proceeds as follows:
- Organization of a virtual meeting to ensure that potential buyers have understood the property specifics,
- Declaration on the honor of future buyers confirming that they are not sick
- And supply of a letter of “pre-approval” from the bank.
In the end, it helps to better target visitors and avoid the curious …
So when we ask Isabelle why people are buying now and why everything has not been put on hold … she simply replies “People buy because they need to buy. Real estate remains an essential good, not a luxury product. And when you work “remote” and you realize that there is a room missing in the house, it is a real trigger.
Therefore, buyers are not first-time buyers but rather people looking to buy a larger, second investment.
The range of best-selling goods is between $ 1 and $ 2.5 million. Beyond 2.5 – 3 million, it is more difficult, the product must be exceptional. Obviously the exceptions exist and I just signed a property over 5 million in Noe Valley.
Remember also that interest rates are very low … around 2.95% over 30 years.
One last detail, buyers want turnkey, no question of engaging in major work; they are afraid that if the pandemic lasts or starts again, they will not be able to do the work easily ”.
Isabelle Grotte explains that she does little rental, however she is aware of trends and confirms that the rental price has dropped by around 10% on the market. And landlords have not seen a larger increase in unpaid rents than usual.
In conclusion, if we believe the trend, the single-family home market remains stable in San Francisco, provided that we still sell a good product … renovated to date.
Again, no one knows what will happen in the Fall, but during confinement, real estate market is doing well.
Merci Isabelle Grotte
