Third Quarter, 2010


We are in the midst of the third quarter of 2010, and the biggest news is today's ultra-low mortgage interest rates. A "jumbo conforming" 30-year fixed loan (up to a loan amount of $729,500) is now priced at under 4.5%! A jumbo 30-year fixed loan (higher loan amounts) is priced approximately one percent higher.

This substantial drop in rates has given buyers at least ten percent more buying power compared to a few months ago - and the rising housing affordability is translating into increased closings. Buyers are benefiting across all price ranges. Luxury property buyers are borrowing regardless of their ability to purchase with cash. Sellers are finding that their properties are moving faster, with more multiple offers and going above asking price in the case of the well-priced properties.

In San Francisco, the evidence continues that we are climbing slowly and steadily off the bottom of the market that was reached in 2009. Even the traditionally bearish Rosen Consulting Group agrees. In their July 2010 Market Focus Report, they led with: "Confident that the housing market is in the early stages of recovery, we expect a sustainable and modest rise in San Francisco home prices from this half-way point in 2010." Rosen Consulting went on to say that the median single family home price rose 4.6% over the last year. The condominium market was even stronger, with an annual price increase of 8.7%; and the number of condos sold rose 20% over a year ago. Inventory is down to as low as 2.3 months of supply for the North side of the City.

Looking ahead, expect September's inventory of new listings to rise dramatically compared to August, as is tradition. With buyers back from their summer holidays, we will be marketing our finest properties. On another note, a number of our clients have recently asked about the process for purchasing a property sold through probate requiring court confirmation. Here's the essence of how it works: the property is listed for sale with an offer date established. A savvy listing agent will price it below market value, allowing buyers to bid up the price. S/he will also generally provide both pest and property inspection reports for prospective buyers. While one can independently inspect the property, it should be done up front given that probate sales are "as is". Offers are submitted on the due date with a cashier's check for the required deposit, generally 10%. The accepted offer's price is then published on the MLS, along with the date for the court confirmation hearing less than 30 days later. Other buyers can attend the hearing to overbid, bringing their cashiers' checks for the required initial overbid amount, along with a personal check to make up the difference if they bid even higher. The judge can determine the overbid increments on the spot, essentially running the auction. Finance contingencies are allowed, but as with all transactions, they can put the buyer at a disadvantage. The winning bidder then speaks afterward with the attorney for the estate to iron out the details. The terms must be the same as in the original offer; the buyer cannot add conditions. It's complicated, but quite manageable with an expert agent's help.

Once again, the current rapidly moving market creates a time where market savvy and experience make all the difference in the world. Experience and knowledge can pay dividends to sellers and lack thereof can put buyers out in the cold. Having the personal advice and dedication of a well-informed Realtor® will make all the difference.


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