Cooling of the real estate market? Not in the San Francisco Bay Area where opportunities abound, say these Sotheby’s International Realty agents

Pictured: Dev Parikh, Josh Burns, Lauren Fraser, Arthur Sharif

The San Francisco Bay Area has always been considered a land of opportunity and, according to local Sotheby’s International Realty, this opportunity extends to its current real estate market. Although the conditions are ideal for a number of reasons, it can be difficult for many buyers to realize when they scan the headlines.

For example, while Arthur Sharif, agent for Sotheby’s International Realty Silicon Valley, acknowledges that sales in the hot zone surrounding Stanford University have been halted, he is quick to point out that people are not considering the context. “Last year was an anomaly where we were catching up with previous years, and it’s not fair to compare today to that outlier market,” he says.

Dev Parikh, who specializes in the East Bay, which includes cities like Oakland and Berkeley, also assures his buyers that the news doesn’t tell the whole story. He characterizes the data as pointing to a market normalizing, rather than slowing. “We have grown steadily since around 2010. Today we continue to see demand, including from incoming buyers.

Lauren Fraser, agent for Sotheby’s International Realty, agrees. “Headlines don’t always favor San Francisco… They used to report that homes were selling for $1 million over asking price, and now they say people are fleeing San Francisco, but nothing is okay,” she said. “Our goal is to reassure buyers in what they see as an uncertain market.”

The Bay Area Shopper

So who is the typical Bay Area shopper today? The pandemic has revolutionized our world, and the effects are evident in real estate as much as anywhere, notes Sotheby’s International Realty agent Josh Burns.

“We see the concept of working from home as a crucial driver because it allows customers to broaden their searches and look further from San Francisco, where they can get more bang for their buck,” he says.

A common trend spurred by virtual work is that local customers are selling smaller homes and buying larger ones to take advantage of the space so they can work even when the kids are home or have parents. out of town guests. A beautiful outdoor space is another advantage as buyers favor terraces and patios.

As before, single-family homes remain the most desirable option, and customers want to be informed about communities and school districts. “I often work with moving families who are interested in pre-pandemic commute patterns to help assess how they might emerge post-pandemic,” says Burns.

An influx from everywhere

Buyers in the San Francisco area come from all over. As Burns noted, many are locals looking to expand their search to more affordable areas. Sharif sees the young people who used to live in Palo Alto and Menlo Park find themselves priced out as they have families and want bigger properties, which sends them exploring opportunities in the next ring which includes San Carlos, Belmont, Sunnyvale, Cupertino and Mountain View.

Parikh sees a steady influx of buyers up and down the coast, such as San Diego and Los Angeles to the south and Portland and Seattle to the north, as well as many semi-local residents who find the East Bay offers good value proposal compared to Silicon Valley or San Francisco.

While the exodus of Bay Area residents may have been exaggerated at the start of the pandemic, Fraser knows some who moved out but finds they are now considering buying out. However, they are not necessarily looking to move their entire home. “They see it as a second home where they can split their time,” she says, adding that many of them gravitate towards condominiums in luxury buildings.

Burns has also seen some clients leave early in the pandemic, mostly to Rocky Mountain communities or East Coast family homes, and now sees them re-engage because that’s where they want to be long-term.

Sharif frequently works with engineers from Boston or finance professionals from New York, and says even international buyers keep coming back.

Unmissable market opportunities

Parikh mentions the uncertainty created by rising interest rates, but says that so far it hasn’t had a negative impact on real estate in the Bay Area. Instead, the local market is seeing a disproportionate number of buyers compared to sellers, part of the historic shortage of inventory.

“I don’t foresee a drastic increase in inventory or a decrease in the number of buyers,” he says. “We will always see people picking specific neighborhoods because of the value they get and the quality of the schools. Prime properties that are properly listed, presented and appraised sell quickly. When properties persist because they don’t meet these criteria, it’s an opportunity for a potential buyer to negotiate more actively.

Particular pockets of action include investments in and around the University of California, Berkeley, the campus as well as properties anywhere between Oakland and Berkeley, which has strong public transit options. “Anything near a BART transit station or easily accessible is highly desirable,” Parikh says.

And he notes that while these East Bay neighborhoods have risen in price, the underlying reason for the appreciation is due to the good value proposition they offer.

“Some buyers are hesitant because they see the market changing, but we see this as an opportunity to enter a market that has been very competitive.”

Sharif’s clientele moves aren’t as tied to interest rates as the NASDAQ, as stock appreciation is often where they get their down payment. For this reason, he finds that the shopping season starts in January when their bonuses and stock options are revealed. “Our busy time starts around the Super Bowl and ends around Memorial Day as they head elsewhere for the summer,” he says.

Many Sotheby’s International Realty brokers are seeing continued strength, based on the lack of inventory. “Our prices will remain high because there is nowhere to build,” says Sharif. “On one side we have the San Francisco Bay and on the other the Santa Cruz Mountains. The limited amount of land is holding back development as many towns do not want multi-family properties.

Burns views the current trend toward caution as a positive.

“Buyers are more patient. I don’t see them rushing to lock in low interest rates, but rather looking for the perfect home for their needs.

He also sees a return to why people were buying homes in the first place. “At the start of the pandemic, buyers were selling quickly for big gains, but we need to move to a more suitable environment. A home shouldn’t be seen just as a financial gain on a bank statement, but rather as a place where you raise a family and engage with neighbors and the community, and I think we come back to those quality of life issues .

Fraser thinks this is the perfect time to enter the market. “Although interest rates are rising slightly, they remain manageable, especially now. Combined, we are starting to see price reductions and the values ​​that buyers are seeing are offsetting their concerns about interest rate changes. Now is the perfect time to buy a house.

Is it the right time for you to take advantage of this rare and good-sized market? Visit Sotheby’s International Realty.

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