Spring is in the air and the numbers for March are now in! The birds are chirping, everything is covered in pollen, and the real estate market is about as active as we’ve ever seen it. So active in fact, if you have a single-family home that is nicely renovated, underpriced, and in a decent location, we will take 10 to 1 odds that you’re getting multiple offers and the price is going far above expectations. The frenzied environment also comes with a nice side order of buyer fatigue, a dynamic we are starting to see rear its head.
What exactly is buyer fatigue? In a frenzied market where houses are getting 10, 20, sometimes 50 offers, buyers who get defeated time and time again eventually bow out of the market or sit on the sidelines until the frenzy calms down. The question on everyone’s mind is... how long will the frenzy continue? See below for prediction.
Until then - a few tales from the trenches are in order! 71 Rico Way, in the Marina District, was listed for $3,800,000 a few weeks ago and just closed escrow for $4,810,000 after receiving 10 offers, 7 of which were all-cash. That's $1,829/square foot. Our listing at 533 Wildwood Way in Mt. Davidson Manor was listed for $1,495,000 a week and a half ago. We reviewed offers this past Wednesday, 14 to be exact. We are closing next week to an all-cash buyer for $2,000,000, a 34% overbid. Fun fact: our lovely clients are a doctor and one of Obama's speechwriters! We wrote an offer on behalf of one of our buyer clients at 2336 Bay Street in the Marina District last week. We were one of 18 offers, all of which were contingency-free. The home, which had been listed for $2,300,000, will be closing just shy of $3M. Arthur McLaughlin, talented local stager and designer, listed his high-rise home on Nob Hill at 1242 Sacramento Street #1 for $1,800,000. Word on the street is that it will be closing near $2,500,000. 83 Laverne in Mill Valley sold a whopping 28% above asking, and San Anselmo has had 3 homes go for 33% or more over asking-- just this past month!
Of course, not all properties are this hot -- but it is very interesting to note which ones are and why. Single-family homes are enjoying their day in the sun -- even ones in the foggy Avenues. The west side of San Francisco is reaping a lot of benefits from the single-family home boom. But for every stratospheric sale, there are even more disappointed buyers, who either re-enter the marketplace to compete on the next one or gradually bow out one by one. It's an interesting time, to say the least.
This is where we'll attempt to make a prediction about the future based on all the inputs we receive each month - whether it be boots-on-the-ground experience, roundtable discussions we're participating in, or the countless articles, podcasts, industry reports, and other media consumed. Read at your own risk!
How long does the frenzy continue? In an age when volatility is the new normal, market conditions can turn on a dime. Despite that, we predict the remainder of 2021 to resemble a "frenzied" market favoring sellers, with a little steam coming out of the pressure cooker with each passing day. As buyers get absorbed and new inventory becomes available, the frenzy can only cool off. Upward pressure on interest rates could also take some heat out. We're "white hot" right now, and we suspect by the end of 2021 we'll have cooled to "red hot". That means 2022 could also be interesting, and if things cool enough, those who were forced to the sidelines may reawaken from dormancy, ready to jump back in and try again-- adding heat to the market, reinvigorating it for a second go-round. Time will tell, so make sure to stay tuned to our monthly newsletter to keep in the know!
Click here to read the San Francisco market report.
Click here to read the North Bay market report.
We hope you enjoyed this edition of the Artemis Real Estate newsletter. Please contact the team if you or any of your connections need help navigating this crazy market, and until next time, stay safe, healthy, and hopeful!
Arrian, Payton, Sejal, Jennifer, Lorelei, and Colin