Why You Need To 'Be In A Rush' In SF Market!
I've heard a lot of home buyers say they are not in a rush to buy. While I completely understand buying a home is not something you rush into, I want to point out the fact that you may be leaving more money on the table than you think every time you hesitate to pull the trigger. Not many buyers have to buy things in a hurry, but I noticed smart buyers quickly understand the market dynamics and take a decisive action.
Let me share two specific examples.
1. New Construction: Marlow(1788 Clay) VS Rockwell(1688 Pine)
(Photo: Construction site of Rockwell. The building is keeping its original façade!)
One of the most popular new construction sold in 2014 was Marlow located in Nob Hill(Van Ness & Clay). At the time, the average $/sqft of the units there was $1106 and I remember lots of buyers complained how expensive and crazy this market is. In early 2015, another new construction in the similar area, Rockwell located in Pacific Heights(Van Ness & Pine), started its sales at the average $1250 per sqft. People again complain how this price increase just never seem to stop and how it is so not worth the money but now they regret that looking back, how "cheap" Marlow was at $1106 just a year ago!
2. SOMA Loft: 60 Rausch St
I thought this building will make a good example since there was exceptionally high number of inventories sold earlier this year. The average $/sqft of this dramatic loft building in 2014 was $635. To my surprise however, in 2015, it jumped to the whopping $943! Below is the sold history of <60 Rausch>.
Unit #312: 2BR/2BA, 1133sqft, Listed at 899k Sold at $1.095M in Feb 2015
Unit #305: 2BR/2BA, 1265sqft, Listed at $1.050M, Sold at $1.2M in March 2015
Unit #207: 2BR/1.5BA, 1304sqft, Listed at 998k, Sold at $1.15M in May 2015
Unit #405: 2BR/1.5BA, 1202sqft, Listed at 995k, Sold at $1.18M in June 2015
As you can see, earlier this year, unit 312 was sold over 20% higher than the listing price at just under $1.1M. And in the following month, the value of 2BA 2BA unit went up by 100k as unit 305 was sold at $1.2M. And most recently, unit 405 with 2BR 1.5BA, the smallest of all the units sold this year, was sold at $1.18M, just 20k less than the price of the 2BR 2BA unit sold 3 months ago!
Let's say you were on the market in Feb, but decided to wait for the next best loft comes on the market. You will indeed see a couple more chances to make an offer for this building after losing #312, but the price you will pay for the next unit is almost never lower or even the same as what you would have paid for the currently available one. If you are a buyer for #305 for example, you should feel good by now that other units with 0.5BA less are now selling at the similar price range in just 3 months!!
My point here is not to convince buyers to purchase just for buying sake. What I am trying to share though is being decisive when the right property comes on the market, can indeed save you lots of money in the upward market. You obviously should not buy any property hoping it appreciates in the next few months. But if you see a viable option, don't hesitate and jump in!!