Danielle Lazier is a realtor with Zephyr Real Estate, the author of SFHotlist, and Bernalwood’s unofficial real estate analyst. Here’s her latest update on the residential real estate market in Bernal Heights:
Maybe, just maybe, the worst is behind us for the local San Francisco real estate market. Since January here in Bernal Heights, real estate sales have picked up speed with no sign of a slowdown. On the other hand, the housing market is cyclical so just like other markets, it’ll continue to go “up and down” and “up and down” and “up” again.
Most of my “evidence” of an improvement in the Bernal Heights real estate market is anecdotal. Along with being cyclical, markets are also driven by psychology — what we believe will be, will be. Home buyers are feeling more optimistic with a greater sense of urgency this year than I’ve seen since pre-2008. They tell me they are motivated to buy while interest rates are still low, and they believe that prices are starting to slowly head up. They are frustrated by the lack of inventory, meaning there are not enough homes on the market to satisfy the number of qualified buyers ready to buy.
All this sounds like realtor BS, doesn’t it? Believe me or don’t, but realtors are seeing strong demand for the nice, quality homes. (More on that in a moment.)
Here’s a little bit of analysis: We’ve had 28 single family home sales in Bernal since January, with a median sales price of $761,818.00 and the average listing selling for 2.14% over the asking price. Last year, January through March 2010, there were 32 sales, but the median price was $719,000.00 and sales averaged 0.83% over the list price.
The market remains “Darwinian,” with the nicest (fittest) homes selling super quickly while homes “in need of a make-over” take longer. Plus, buyers remain price-sensitive, so it’s important to price your home based on today’s market and recent, relevant homes sales. The property needs to feel like good value for the money for buyers to go for it. (Crazy! Wouldn’t you want value for your money too?) I, for one, hope this very rational behavior continues through the next “up” cycle.
But I do think the worst is behind us. so it’s a good time to look back and assess. Just how much did the Great Recession affect Bernal home values?
(Quick refresher: Lehman Brothers “fell” in the Fall of 2008. Many use this as the apex of when the bleep hit the fan although the real estate downturn began earlier.)
Using the San Francisco Multiple Listing Service (MLS) for the data, I charted the median sales price of a single family house listing in Bernal Heights from the beginning of 2008 to the beginning of 2011.
Q1 2008 = $785,000
Q1 2011 = $760,000
% Change = -3.2%
Granted, this data is for all single family homes, and we know that there is a huge variation of property in Bernal. Yet this is pretty interesting, isn’t it? I would say that a 3.2% decline over the course of the worst economic slump since the Great Depression is pretty freaking good. (For context, using the same scope of data, our neighbors in the Excelsior had a 25.3% drop in their median home sales price.)
When was the “bottom” of the market, you ask? My opinion is that San Francisco-wide, the bottom of this housing downturn too place during 2009. Here in Bernal, it was the first half of ’09:
Q1 2009 = $730,000
Q2 2009 = $715,000
So where does this leave us? On the one hand, Spring is the air and the mood is dramatically better than last year. On the other hand, the economic recovery is tenuous, and banks remain a bureaucratic mess. Maybe it’s too soon to pop the bubbly, but believe me when I say that what you believe will be. See you next month!