As more and more people swing by this here little real estate blog, I find myself getting more and more emails from readers.

Sometimes the readers are home buyers, sometimes the readers are home sellers, sometimes they’re other Realtors from across the country, sometimes they’re people with random questions about real estate.

The other day, I received a letter that was a little inspiring and reminded me that I don’t just write my blogs and my newsletter for myself.  It reminded me that people actually read what I write, and it made my day so much so that I thought I’d share it with the rest of you readers.

Here it goes:

Hello Luba,
You may or may not remember me, but I emailed you asking for a canvas bag a couple months ago. Firstly, I want to say thank you for that. I use it quite religiously every week I walk to the local produce store and it leaves me with a great sense of pride in enabling me to feel I am doing every small part I can in living green (and also saving myself and the grocer money. After all I am working towards a house here!). This initial contact with your voice leads me to my second statement of gratitude.
I have been reading your newsletters and I want to say good job, not only for informing me the buyer, but also for showing us that you are a true entrepreneur and doing everything within your power to help us and in turn help you thrive in this questionable state of the economy. First it’s the bag promotion and then the newsletters. I am looking forward to continued updates and other projects that will keep us excited about our dreams and futures.
By reading your newsletters I have motivated myself to take night classes in real estate at CCSF. It is only the first week and I am already drowning in the possibilities of the economy and learning so much about how real estate is woven within the fabric of our lives, from trends in loans and interest rates related to population spikes, rising oil prices, inflation of commodoties, and the local and federal politics and laws that shape our societies. I hope that by the end of this semester at the very earliest, I will have become an educated property seeker and have this initial spark of motivation to thank you for almost entirely. I look forward to the day when I or another young buyer can financially patronize your services and you might see a financial gain from your hard work, which I am certain you will reinvest in our futures.
Thanks again!

Grant Inaba

Grant’s letter really made me smile!  As a Realtor, I know that I often have an impact on the lives of my clients.  But what I often forget is that anything that I say might even have an effect on people that aren’t yet my clients – and are (for at least the time being) total strangers!  Writing my blogs and my newsletter gives me a great way to share information and insights with people I haven’t met yet - and it’s great to know that someone, somewhere is able to get something out of it!

Thanks for writing Grant!     Good luck with the real estate classes! 

Here’s the latest Fast Facts update from the SFAR. Updates are provided almost weekly and each week is a different sector of the market (ie. Condos, Single Family Homes, 2-4 unit dwellings, etc.).

Check back next week for more statistics.

Occasionally I get a question from a reader of the blog that’s worthy of sharing with the world – I thought this one was worth sharing. Hope you think so too…

You probably need a little background on this question since it picks up in the middle of a conversation… I was going back and forth with a contact that emailed me through the blog about a property he was very interested in.  He knew that the property was very desirable and realized that there would be competition (and, yes – there is still competition in San Francisco for good homes that are priced well).  So – here’s his question…… 

Q.  …..I have done a bit of analysis on the house sales data you sent me.  Since Oct. 1, 2007, houses that listed above $1.1m and sold above listing, the average sale price was 7% over asking.  There were some outliers that broke 15% and less that broke 20%.  In March the average in this category was 5% over asking.  We are thinking of coming in at 9% over asking ($1,280,750) with about 30% down. We really love the place and want to make sure we are in the range to solicit counters if there is a “round two”, but yet not over pay.  Any thoughts?

T.S.

A. That is an incredible analysis!  I know people love statistics, but that analysis is incredibly thorought.  I think 9% over asking puts you in the right ballpark for getting your offer accepted. But the reality is that there’s no real formula for asking vs. selling price.

What I usually tell my clients is that a second round might not come. Some sellers choose to take the best offer in a multiple offer situation (for fear of losing it if a buyer doesn’t want a counteroffer) or they accept the best offer with some minor changes in terms, so I usually suggest putting your best foot forward the first time so that if they DO take the best offer – you have no regrets about not paying more when you were willing to do so. (Now – when they’re not expecting multiple offers, you have more flexibility and have the luxury of leaving room to go up if need be by starting with a lower offer.)

So how do you get to that magic number?

My suggestion is to decide at what price you are willing to let someone else have it. I call it the “I won’t have any regrets if someone wants to pay more” price. This is just my 2 cents, so please, do take it with a grain of salt.  But I’ve seen a lot of people regret passing up the home of their dreams because they let someone else beat them by a few thousand dollars. 

One other thing to keep in mind is that the sellers want more than money in this case – they also have some terms that are imporant to them. They want a short escrow and a rent back as well.  If there are two similar offers that come in, the one with the most favorable terms is much more likely to be accepted.

Let me know if you have any questions. I know this is a lot to digest! It’s exciting and scary all at the same time! So shoot any questions, concerns, etc. my way!!!

I forget sometimes that people actually read this blog.  In fact, I’m often surprised when I run into people that actually know who I am after reading my thoughts about San Francisco real estate.  Usually, the people that recognize me are other agents that read this blog, but sometimes, I run into strangers at open houses or other place that actually recognize my name – and they say that it’s from here! 

It’s nice to be reminded that people actually read what I write, and even nicer when someone takes the time to write in and ask a question to get my advice!  Occasionally, I find the questions (along with my answer) worthy enough to publish (with occasional edits to keep some of the person’s information confidential).

So here’s a question I recently received that I thought I’d share with the rest of you out there in blog land.

Q. I love reading your blogs! Your advice and expertise is awesome, I was wondering if you can give me some advice? I have the opportunity to buy a family home in district 1 for $650,000.  It needs approx. $80,000 of work. Is this a good deal in the overall spectrum of the real estate market? Do you forsee the market dropping more, and if so, for how long?Thank you, thank you, thank you for your time.

A. Hi S.M.!

Thanks for the kind words about the blog.  It’s always nice to hear positive feedback! 

First – about the place on (location not being revealved) Avenue.  On the surface, it sounds like a great deal for district 1.  (How many bedrooms/bathrooms does the place have?)  But a lot of other factors can make it a horrible deal – from the neighbors, to the layout of the property, to the fact that the $80K estimate to repair the place can easily double.  (Who gave you the estimate for repairs?)  So what looks like a good deal on the surface may very well turn into a bit of a nightmare once you actually buy the home.  The key is to look for neighborhood comparables, and if the price is good ($650K for District 1 sounds good, but to say for sure, I’d have to see it and see the repair estimate). 

As for the market in general – there are certain areas where there really hasn’t been depreciation.  There hasn’t been any major appreciation to speak of either, but prices in District 1 haven’t gone down (in fact, even with fewer sales, median price has increased slightly).  So in my crystal ball – I foresee that the market isn’t really going to be dipping down much further except for a few select neighborhoods in parts of Districts 3 and 10 where values during the “boom” skyrocketed to levels that were out of control, and in my opinion, the dropping values there are more a sign of a market correction (prices there shouldn’t have grown that rapidly) than a sign of the market falling.

A lot of it is also going to depend on your goals.  How long do you plan to stay in a place?  Are you single?  Married?  Kids?  Dogs?  Do you have plans for marriage, kids or dogs?  There are going to be more decisions that you’ll need to make to decide whether this home is right for you.  For that matter – the size of your down payment as well as cash reserves will make a difference as well.  As will who does the repair work – are you handy?  Is the work just cosmetic?  Or is there structural work? 

So – sorry for the lack clarity in my answer, there just aren’t any black & white or yes & no answers in real estate.  Every buyer/seller/house/neighborhood/lender etc. is different and that makes it difficult to give a cookie cutter answer to any question. 

If you want to talk more though, I’m happy to help you to try to get to the bottom of whether this place is a good deal for you.  My advice is always free and without any obligation to meet in person or to work with me as your agent.  However, if you do want to meet in person and do need help – well, I’m available for that as well.  Just let me know how I can help and I’ll be happy to accommodate! 

Please don’t hesitate to call me or email me if you want to talk further.   Hope my answers helped a little – even if they were just food for thought! 

Best regards,

Luba Muzichenko

 

 

 

 

 

A reader commented today and asked:

Do you have MLS data for sales of all types of homes in 2007 vs. 2006? I’m curious to know whether total home sales went up in 2007 vs. 2006.

Why, yes, kind reader! Yes, I do have that data and I’m happy to share.

Across the board, home sales went down in 2007 from the 2006 stats. Here’s the deets.

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Occasionally I get a question from a reader of the blog that’s worthy of sharing with the world – I thought this one was worth sharing. Hope you think so too…

Q. Hi Luba,

E.S.

A. Hi E.S.,

First – thanks for the kind words about the blog. I try to provide useful information (at least most of the time) and am glad to hear some people are enjoying it.

Now – to answer your question….

My answer won’t be as straightforward as I would like to provide, but here it goes.

My gut instinct is to say that condos in more traditional buildings tend to have a higher resale value – but, that’s because they’re in neighborhoods that are already somewhat established where there is little to know inventory. High rises on the other hand seem to be going up at a rate faster than the speed of light – or something like that. Most are going up in neighborhoods that aren’t really established communities as of today, but will likely be in the next 5-10 years as urban planners create more corridors that offer more amenities to residents. That being said – new developments are definitely popular. As the inventory is created, it gets bought up – with some developments getting bought up faster than others. If you plan on reselling quickly though, you’re taking a gamble. In Mission Bay, buildings like the Beacon saw a drop in value from the original purchase price within a year or two of people buying their units. But, 3 years later, prices are slowly creeping up again as the neighborhood begins feeling more, well, established for lack of a better word.

I guess to sort of summarize, over the long term, I think appreciation will somewhat balance out between traditional condos and high rise new developments. Essentially, it’s a rather close call. I think if your question is more related to which one you should look into buying, I think it’s going to depend on a lot of things, from timing of the purchase, to your future plans, to your lifestyle, to your style preferences – and above all else, which place you’ll be happiest in. A home is a huge investment, but it’s also a “home”, so you want to be sure that above all else, you’ll be happy living there!

Let me know if you have any other questions! I’m always happy to be of assistance!