Since last September, the rapid acceleration of prices and perception of volume in our local San Francisco market has (the remaining) realtors reeling with burned out buyers and multiple offer situations for sellers. Summer has brought with it a welcome pause or slow down in the mayhem. We are all bracing ourselves for a huge fourth quarter. Inventory should be up, people will be back from vacation, and interest rates are remaining relatively low.
I have noticed a few trends in our local market.
My thirty something friends are selling their homes in San Francisco and moving to Marin or the east bay. They need more space for their children to grow and play, and they don’t want to pay for private schools. I have become adept and finding cute homes with highly rated schools. Novato, Petaluma, and Oakland are taking in many San Francisco escapees. Some even cited the need for some warmer weather. This is the coldest summer in memory.
The second trend amongst my friends are the group starting to plan their exit strategy. Its more than just writing a will or setting up a trust. People are trying to image their retirement, and how to pay for it. This might be downsizing their current home. It might be paying off their home and buying a vacation home. It might involve buying something now as a rental that could become a retirement dwelling in ten or fifteen years. Still others are buying rentals to provide their future retirement income. Each person has their own vision of what they will want when they are 65, but the interesting change is that no one is counting on social security or the stock market. All their plans hinge on real estate.
It also nice to see builders starting to build again. San Francisco has an enormous amount of construction happening, which is a great indicator to us that builders think they will have someone to sell or rent to. We all know that there is less than a one percent vacancy rate in the rental market currently.
US homebuilder confidence nears 8-year high.