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Real Estate - San Francisco Leads Recovery
By Danita Kulp
t’s time for some good news again.
Both sellers and buyers still have concerns regarding the stability of the real estate market here in San Francisco and the Bay Area. As we run contrary to the rest of the nation, our market here has been evening out. In fact, it has been rising in several sectors and areas since the end of February 2009. For those of you who follow the stock market, that too started evening out and rising the end of March 2009.
So, in San Francisco specifically, we were down for approximately eight months. Our slowdown and reduction in property values started at the end of June 2008. Thankfully, our area has international desirability and numerous industries that keep us afloat even while others are down.
On March 16, 2010, The Today Show (NBC-TV) had the nationally known real estate expert, Barbara Corcoran, on sharing her input regarding which national cities, in her opinion, were leading the housing recovery. The following was her criteria used: 1) affordability; 2) low rate of foreclosures; 3) appreciation, per National Association of Realtors statistics; and, 4) strong job market and low unemployment.
Top 5 Cities Making a Recovery:
#5 - Charleston, West Virginia;
#4 - Memphis, TN (prices went up 21 percent due to jobs — Fed-X now headquartered there);
#3 - Phoenix, AZ (was first city to drop in price — median price is presently $144K, so affordable for many);
#2 - Pittsburg, PA (up 5 percent in last year alone — they’ve invited in various industries, much like we have here in San Francisco, and so it sustains them and attracts jobs and workers)
#1 - San Francisco, CA -- The #1 pick in the U.S. (attractive internationally, hit hard early in the downturn, the most popular city to migrate to, per Barbara Corcoran).
The San Francisco market, although improving, is not without problems. Price ranges below $750,000 are extremely active and have multiple offers, especially for homes. However, sellers still need to price competitively or the listing sits. Traditional buyers are still being outmaneuvered by all-cash buyers closing quickly. The lending sector no longer has FHA spot approvals for funding, and the up-to-$8,000 federal tax credit will soon be gone. Due to January 2010 federal lending changes, the loan process is still difficult. Large institutional lenders are finally starting to lend, albeit cautiously. Mortgage bankers are more consistently completing sales. The appraisal sector has been separated into a 3-party entity, paying appraisers almost nothing for their time and bringing them in from areas even four hours away without knowledge of what they are appraising, so multiple appraisals are the norm, which costs buyers more in closing costs and slows down the closing date.
Overall, though, the news is excellent for San Francisco, and we are recovering quickly compared to the rest of the nation.
Danita Kulp is a broker associate with Paragon Real Estate Group. She has sold property since 1981 and has written and published real estate articles, geared towards consumer education, since 1994. She can be reached at 415-738-7081, or visit her at www.successfulhomes.com.
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