BAY AREA HOME PRICES RISE 18 PERCENT , HOW MUCH HIGHER CAN THEY GO?
“In all recoveries, the market has regained peak values (of the previous cycle) within a year or two,” said Patrick Carlisle of Paragon Real Estate Group. “Once economic recovery begins, the market goes crazy. There’s so much pent up demand.”
When the time comes to sell your home, your first thought is probably, why should I pay an agent to sell my house when I can sell it myself? For a savvy few, it may be possible, but is it worth it to do a For Sale By Owner (FSBO).
This is my top 5 reasons why you should hire an experienced real estate professional to sell your home and you may think twice before doing it yourself.
1. Legal Risk
Selling a home involves not only purchase contracts, but also many disclosures and escrow paperwork. Another thing to consider is correctly filling out those forms and executing it so that it is legal and in your best interest.
When a Realtor lists your home, we do not just put up a for sale sign and call it a day. We list and market your home so that every Buyer and Agent will know your home is for sale.
3. Professional Job
This is a professional task and it needs a professional to get the job done right. When your teeth hurt, you would go to the dentist to get your teeth removed. You can probably pull it out yourself, but wouldn’t that be too risky and painful?
4. Negotiation and knowledge
Realtors know the market and will advise you on the selling price of your home. As a result, you will get a higher sales price for your home through knowledge of the market and negotiating the best price possible for you.
5. Full Service
You will have more time to spend with your family instead of stressing about learning something new. From the signing of a listing contract to signing the final escrow paperwork and everything in between, we will be there to guide you.
Selling a home is probably one of the biggest things you will ever sell. Why sell it yourself and risk making the biggest mistake of your life. If you have any questions or in need of my service, please contact me today.
As housing prices inch toward or past pre-recession levels, we have to ask, how much higher can Bay Area home prices go?
Home prices in San Francisco pushed up 18.2 percent in April compared with the previous year, but have gone up a whopping 47 percent over two years from April 2012 to April 2014, according to the most recent S&P/Case-Shiller Home Price Index. The San Francisco figures include five inner Bay Area counties.
We may be past the crest of the crazy. Home price growth is slowing down in San Francisco — April was the first time in 13 months that the region’s housing market grew by less than 20 percent year-over-year. Still, prices are going up.
During the past two decades, Bay Area home prices have followed a similar pattern during economic cycles: They go up, then they go down and then they go up again, but each time they go up, they go up higher than before. And depending on where you are looking, we may not be at that point yet.
Prices shot up during the tech boom in the late 1990s then dropped after the bust. They peaked even higher in 2006 before hitting a recession low in 2011. They have been on the upswing again, but as of April, the region as a whole is still 14 percent lower than its previous peak in May 2006.
That’s not true everywhere. Several cities in the region have already zoomed past previous peaks such as San Francisco, Fremont, Berkeley, San Mateo, Redwood City, Alameda, Pleasanton, Menlo Park, Foster City, and Lafayette.
Prices will likely continue climbing, but just not at the level they have over the past two years, said Stan Humphries, chief economist at Zillow, a real estate information company. Prices have gone up 15 percent during the last year, according to Zillow’s estimates, and that will slow to about 7 percent in the next year while the historical average is about 3 percent growth per year.
“We predict San Francisco is going to grow at half of its current pace for the next 12 months, but that pace is still incredibly bullish compared to historical averages,” he said.
“We’re seeing more inventory than last year, that’s a good thing,” Humphries explained. “What’s keeping price appreciation so high is that there are not enough homes to choose from on the market, so buyers are bidding up prices.”
Job growth remains the top driver propelling Bay Area home prices, so as long as that continues, home prices are likely to keep rising, Carlisle said.
Most economic cycles last five to seven years, so it’s possible since the recovery started in 2011, we are only a few years or halfway through the current cycle.
Carlisle still sees the market as “crazy,” "Review Hint" with homes selling quickly and buyers bidding up home prices — in May, 29 percent of San Francisco homes sold for 20 percent or more over asking price.
“This has been the most ferocious market I’ve seen in 25 years,” he said.
Factors that would cause home prices to drop would be a decline in job growth or wages and upticks in interest rates. Right now, the average Bay Area homeowner puts 39 percent of their income into their mortgage, but that percentage could up to 51 percent if interest rates go up just two percentage points.
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