UrbanInsight Newsletter: Spring 2004

THE FIRST QUARTER OF EACH YEAR IS HISTORICALLY THE SLOWEST PERIOD FOR REAL ESTATE SALES. HOWEVER, 2004 HAS BROKEN THIS TREND BY PROVING TO BE ONE OF THE HOTTEST REAL ESTATE MARKETS IN RECENT HISTORY.

Following are Bay Area averages for the condominium and loft markets. (VIew first quarter 2004 comps.)

• The average sales price for San Francisco and East Bay condominiums and lofts has increased between 4 and 15 percent in just one year.
• San Francisco condos, which witnessed a substantial growth of 15 percent in one year, are the most expensive property types in our analysis, averaging $670,221.
• San Francisco lofts remain a strong option for investors and first time homebuyers, averaging a sales price of $550,728, a 4 percent increase over a one year period.
• East Bay lofts, which average a sales price of $410,730, are considered a higher end living option than East Bay condominiums. They hold an average sales price $88,440 higher than condos. We are finding that many San Francisco buyers who want to get more for their money are looking to the East Bay for a more affordable living solution.
• The number of properties sold in San Francisco has increased by 21 percent for condos and 41 percent for lofts. Despite the greater quantities, days on market (DOM) have decreased to 41 and 48 days respectively. Increases in sales price and quantity, and a decrease in marketing time reflect a strong buyers’ market.
• In the East Bay, the number of properties sold has decreased 30 percent for condos and 44 percent for lofts. However, buyers are still anxious to take advantage of low interest rates, and the market remains strong. As a result, sales prices have increased 4 and 7 percent respectively and days on market have decreased 1 and 35 percent respectively.
• Across the board, properties are selling more over asking than a year ago. On average, condos on both sides of the bay are selling about 3 percent over asking; lofts are selling about 1 percent over asking. But on an individual basis, many desirable properties are receiving multiple offers and are selling far over asking.

In some ways we are in the midst of a mini dot-com boom. The stock market and technology sectors are gaining momentum, and as a result, the San Francisco and East Bay real estate markets are witnessing a sharp increase in prices and quantity sold, with many properties receiving multiple offers. Combined with historically low interest rates (and the threat that they tend to rise after a presidential election), many buyers feel an urgent need to take advantage of this unique buying environment. If you are looking to buy property at this time, we expect the market to remain strong, at least in the long term, but recommend that you do not sacrifice important elements of the purchase process as a means to an end. Follow through on your inspections and work with your lender to find the best rates with the terms that suit your needs. Buying a home can often be one of the largest financial decisions of your life, so judge carefully.

VIew first quarter 2004 comps.

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Spring 2004 Table of Contents