Here’s why it makes sense to be optimistic:
1.) Google announced that it’s hiring 6,000 new employees. Google may be doing so to stay competitive with other Bay Area tech powerhouses like Yahoo, Salesforce, Apple, Facebook, Twitter and Zynga. Many of which have recently leased space, are looking for new space to lease, or are in the process of building new space.
2.) Jobs. Housing follows jobs and while new jobs aren’t clearly in evidence as much as we would like, first-time unemployment claims are down. Could it be the tides are turning on this front?
3.) Pent up demand. College grads and newly-married couples have been waiting on the sidelines.
4.) If the Fed’s foreclosure moratorium is any indication that the tsunami of foreclosures isn’t coming soon…how about common sense? Why would a bank willfully destroy the value of its assets by flooding the market with foreclosures? The bears of this market should ask themselves if this makes sense. Have you actually compared the price of a foreclosure to a standard sale? A three to seven percent differential is about the same as a property that gets lowballed after 100+ days on the market. To increase your selection when shopping for homes, include properties with sellers who’ve mispriced and check the public tax records to see how much is still owed.
5.) Inflation. In most cases inflation reduces supply as people jump into the market because they believe it’s heading upward—and rising inflation will typically pull it forward. Historically, real estate has been an excellent hedge against inflation.
6.) Increasing rental demand has led to higher rents and lower vacancy rates. Landlords currently have an edge. As rental inventories decrease and interest rates remain low, “would-be” renters are taking a second look at buying.
7.) The sale of 3147 Sacramento. Listed at $1.4M, this multi-unit, apartment building received 16 offers. Bottom line: investors are offering, not shopping.
8.) Baby boomers turn 65 this year. The possibility of downsizing rather than spending their savings on cruises and rounds of golf gives them more control over a turbulent economy. There is great comfort in reduced monthly expenses.
9.) The Dow Jones peaked 12,000 and the S&P topped 1,300 for the first time since 2008. Some may find value in cashing in the gain and using it for a down payment.
10.) Confidence appears to be rebounding after all.
Now that you have 10 reasons to remain hopeful about Bay Area real estate–tell me–do you feel better or worse about the economy? To subscribe to SF Real Estate Digest please visit: http://www.sfhomeforsale.com/Blog.