In 2013 San Francisco real estate continued to make significant gains in value. The median price of a single family home increased by 19.8%, while condos were up 14.4%. At the same time, inventory was at its lowest ebb in two years with condos, on average, selling for 6.5% over asking, and single family at 8% over asking. Additionally, though rates were at historic lows for most of the year, uncertain regulatory guidelines caused lenders' qualifying practices to remain unreliable, giving cash buyers a significant advantage. We were coming from a long way down, so certainly it is good to see a recovery. The question is will those factors continue into 2014?
A balanced market has qualified buyers, reliable mortgage practices, and sufficient inventory. These elements may come together in 2014. New, and reasonable financing regulations are finally in place and interest rates are expected to remain under 5%. Some of the "missing" inventory resides with "move-up buyers": property owners selling a house to buy another. Right now, these sellers should be able to get top dollar for their current property, while the more reliable lending practices and consistent interest rates make them more competitive as buyers. This cycle actually increases inventory and could ease the pressure on prices.
It is impossible to predict if the influx of cash heavy buyers will continue, and to what extent prices will rise. Such trend lines always flatten out; we just don't know when. A lot of "ifs", but the 2014 real estate market looks like it may provide more flexibility and opportunities for buyers and sellers.
Potential Regulation for Commuter Shuttles on the Horizon
San Francisco home buyers are struck with a plethora of amenities most Realtors outside of the Bay Area wouldn't think to mention: WalkScores, LEED Ratings, and all manner of gadgets to play our music, cook our food, and keep our homes set to just the right temperature. This is a city where tech meets activism, and the fruits of that convergence have made homelife more easy, efficient and friendly to the environment.
But there is one innovation where tech and activism have recently clashed; and it is also rapidly becoming a highly marketable amenity for home sellers in many San Francisco neighborhoods: Commuter shuttles, a.k.a. "the Google bus."
Fortunately, Mayor Ed Lee and several members of the board of supes saw this conflict coming a year ago. Along with the heads of several high-profile firms, they recently announced a pilot program that will allow commuter shuttles to operate with less disruption to our existing public transit -- a top priority for those who oppose the private shuttles. It's estimated that 35,000 people board the shuttles daily, putting an impressive dent in the Bay Area's legendary traffic and eliminating 761,000 metric tons of carbon every year from the region's roads and air. We'll see if this proposal gets the approval of the SFMTA Board later this month.