Perhaps you’ve heard that the housing market is headed for a possible recession in the coming year. There are several factors in play, but most experts agree that two of the main reasons why this is happening are rampant inflation and rising interest costs. While the state of the market and the economy makes it challenging for many people to think about shopping for San Francisco, CA real estate, this is still a good time to buy a home. Here are a few reasons why it may be wise for you to go ahead and test the market for San Francisco single-family homes for sale.
1. It’s cheaper than renting
The cost of rent in San Francisco was already one of the highest in the entire nation
. As interest rates continue to rise, some people may consider renting as a viable alternative to purchasing their own home. This often doesn’t work out as well as someone might expect. Renting can be more expensive than owning a home in many cases, and most people find that buying a home is still the cheaper alternative - especially now that the average cost of rent has risen as much as it has.
2. Home prices are falling
Most markets across the country are noticing that average home prices are starting to fall. The market has been hot over the past couple of years, and many people express surprise when they learn that home prices aren’t still rising at a rapid rate. Strangely, home prices in the San Francisco area seem to be dropping faster than in other locations. Home prices in San Francisco dropped nearly 9% in the third quarter of 2022. This is the first drop that the housing market in San Francisco has seen since early 2019 and is a more significant change than the 1-2% drop most markets across the nation saw during the third quarter. Between the common slow-down that the housing market often faces in the fall and general uncertainty about where the stock market and the economy could be headed in the short-term future, it’s easy to see why home prices aren’t climbing much - if at all - in recent days and weeks.
This trend shouldn’t become a long-term issue, though. The market survives recessions on a regular basis and often comes out stronger. Over the past 100 years, home values have risen at a rate that outpaces inflation
. This is true despite the fact that the Great Depression and the market crash of 2008 both took place over the last 100 years. While lower home values might be a concern for current homeowners, they represent a unique opportunity for buyers to take advantage of a slower season in the market. Home values should start to climb again in the near future, and you’ll wish you had acted sooner to purchase a home while prices were down.
3. You’ll find a better deal if you act quickly
Home prices often fluctuate throughout the year. Summer tends to be a more profitable time for sellers because many people are especially motivated to buy a home. Perhaps they are looking to move before their children return to school. Maybe they don’t want to have to worry about unloading a moving truck on a cold or snowy day. Whatever the case, homes sell faster and for more money during June, July, and August. The market often cools off in September and slows down substantially in October. Once November and December come around, the average person is too busy preparing for holiday plans or end-of-year work goals to think about buying a home. Homes will still sell during these months, but sellers will often have to experiment with creative marketing strategies or lower asking prices to generate the interest in their home that they want to see. This could be a great time for you to step in and negotiate a better deal as a buyer.
4. You will begin building equity sooner
Let’s say that you wait to purchase a home until interest rates come down. This is a risky approach, as nobody truly knows when interest rates might begin to fall. Even if you’re able to purchase a home at a lower interest rate in several months, you’ll be several months behind where you could be if you went ahead and purchased a home today. When you rent a home, you’re simply paying for the space. Instead, you could be making payments on a mortgage and building up equity for yourself. The sooner you start making payments on your own home, the faster you’ll build up your own equity and net worth.
5. Inventory is on the rise
More homes are on the market across the nation
than you would have seen this time last year. This is great for buyers because it gives them more options to choose from. You can take time to look at available properties and get a feel for what features and amenities are most important to you. You won’t have to make sacrifices on key attributes that you desire from your home because you’re concerned about a lack of available properties or strong competition that dictates that you act quickly when you find a home that you like.
When you decide that this is the right time for you to begin shopping for a home, Bonnie Spindler
would be honored to help you as you search. Bonnie loves San Francisco and is an expert when it comes to buying and selling San Francisco, CA real estate. She has over 30 years of industry experience and uses her industry knowledge to earn the best deals for each client she works with. Reach out to Bonnie when you’re ready to begin the process of shopping for San Francisco single-family homes.