The hot number in San Francisco real estate right now is absorption. Absorption is defined as the percentage of properties that go into contract in the first thirty days of marketing. For the last few recession bound years, a typical absorption number has been about 28-34 percent. Last week of the 41 properties I toured 18 went into contract for a 44 percent absorption rate. For the last four weeks the rate of absorption has remained at a mind-bending 57percent.
Buyers are out in force and they’re writing contracts. This market is screaming for more inventory. If you’re a buyer with $1M to $1.4M to spend on a 3BR condo, TIC, or co-op in District 6/7—Pacific Heights, Lower Pacific Heights, Cow Hollow, Marina, Hayes Valley and NOPA—you have four properties to see right now; one of which has a legal issue and essentially cannot be sold. If your budget is $700K–$999K, you have 11 properties to view. In this price and asset category there’s more in contract than there is available. This is the year of the Black Water Dragon. It’s an auspicious year for finance and bold projects. This is very interesting to me as four of my buyers in the last few weeks have been echo boomers—children of baby boomers who themselves are starting their own family and will likely drive this market—along with the tech industry, for the next several years.
Next Steps of Action:
Buyers! Make sure your lender has all your documents, and in addition to checking out rates, ask a how quickly they can appraise a property to get a loan funded. The speed at which you can transact is beginning to be a factor in your offer dynamics as we return to a multiple-offer environment. Watch the way your loan officer provides service. Do they work weekends? How quickly do they return your call?
Sellers! List your property now, now, now. Make sure it looks great—staging pays off! Go ahead and reach toward an ambitious number. Please call me even if you’re looking to move to Marin, the East Bay or Peninsula; I know great agents there too.