Hello friends -
You have probably heard that the market is overheated Everyone has a theory as to what is causing the increase in prices and I am no different. Here is what I believe is going on:
1. Although we are in the middle of a world-wide pandemic and financial crisis, there are those for whom this pandemic has been quite profitable. Many of those people are also buying homes in the Bay Area.
2. The ability to work from home has San Francisco residents buying in the East Bay. These are not the typical buyers (people who want a home, rent, and/or work in SF but cannot afford a home in SF). These are people who CAN afford to buy in San Francisco and have never considered the East Bay because they don't want to commute. Now though, with the ability to work from home looking like a permanent reality, they are taking advantage of the lower (I know, I know) prices in the East Bay relative to SF and bringing their larger budgets here where they can have a relatively larger home, a larger yard and well, let's admit it, it's just better here!
3. Low inventory, for an extended time period, has created a pressure cooker environment. Our entire world has turned upside down. There is no predictable "High Season". There was no "Spring Market" last year and I suspect we won't see one this year. I have my ear to the ground and what I am hearing is that many agents have very little coming on the market this Spring but do have plenty coming this Summer. That is anecdotal of course but suffice it to say, it's all wacky. Here are some of the reasons behind the low inventory:
4. Many of the homes that come on the market are trust sales resulting after the owner passes away. We are seeing fewer of these than usual. An agent I work with has a very astute theory. When the adult children of the deceased owners consider flying from their homes to sort through their parent's belongings, hire a realtor and spend money on prep they likely don't want to! Instead, they are waiting until things calm down a bit or they have received their vaccinations thus delaying the listing of many homes we would normally see on the market now.
5. A large percentage of homes are sold by "Down Sizers", people in retirement who want to cash out their largest investment, move to a home that is more convenient and easier to navigate, or perhaps to a retirement community. These folks are waiting to begin the process of interviewing realtors, having painters and movers in their home, having adult children come home to claim their yearbooks and stuffed animals, etc. Instead, they too are waiting for the vaccine before they open their lives up to a gaggle of people.
So now what? Will things calm down? Will prices drop? Yes and no. Real estate is very predictably a cyclical market. It always goes down and it always comes back up. More than anything the market reflects the psychological makeup of the people it serves. Buying a home is unlike any other large expenditure because more than any other purchase it is profoundly symbolic. When things are in chaos around us we want to quell that by hunkering down in our home.
I have come to believe that we can see so much about the global state of our emotional selves through the state of the housing market.
A house is more than the walls that form it, a house is a home. We need our home to fulfill so many basic human needs and right now, as things feel like they are spinning out of control having a home to nest in, to feel safe in, is vital.
I leave you with a quote out of a recent review I received. This touched me as it so utterly caught why I do what I do. I hope I can be there for someone you love. Your referrals are precious to me.
And with this, I bid you a Happy Valentines Day!
With love,
Sarah
"She understands that buying a home is a momentous experience and a monumental transition. She knows it takes time, and she's willing to be there with you, through the hard work, all the way to the end. She knows that you are the expert on your finances and your desires and that she is the expert on Bay Area real estate. She's willing to get dirty--going into a basement to show you what a shear wall is and why it matters, or to explain when some random moisture buildup isn't a big deal, and when it is. She recognizes that her job is to listen to you, and to help you: to help you find an awesome loan broker; to help you clarify your own goals; to help you understand the market; to help you become knowledgeable about home flaws you can fix, and home flaws you can't; to help you adjust course when, inevitably, the market temporarily crushes your spirit; to help you have the smoothest, easiest, and safest transition; and, ultimately, to help you actually land in your dream home. When you need a cheerleader, she will be there with realistic optimism. When you need a reality check, she's not afraid to tell you the truth. She sees her job as a unique opportunity to really get to know you as a client, and then to help you make this profound transformation actually happen. She cares about what you need, and how you want the process to work. She respects your opinions and your budget, and she understands that her job is simply to help you find the home that best meets your family's personal needs and desires, and then actually make that home your own."
- Dawn
