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First Time Buyer in the San Francisco Bay Area
After house hunting for 9 weeks, it’s clear that the San Francisco Bay Area is a difficult market to buy a single family house for a first time homebuyer. House prices are driven upward due to scarcity of the supply and high demand for houses. House sales are completed in an astoundingly fast paced that is head spinning for a novice house buyer. The sheer competitiveness of the market forces the buyer to remove their safety nets in order to compete. Purchasing a house is pretty much a rat race skewed in favor of more wealthy individuals in the current housing market.
The Rat Race
an exhausting, usually competitive routine
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Here are things to know for any first time buyers in the SF Bay Area.
Market Conditions
Listing Prices
Unfortunately, the bay area is a very competitive housing market where the seller has leverage because there are multiple offers to choose from. It’s commonly called a seller’s market. The listing price isn’t a great indicator of how much the house will sell for. In San Francisco, houses may be priced at 1 million but they will sell for 1.4 million. A whopping 40% over listing prices! Toward the East Bay, the competitive areas with good schools and neighborhoods may still go for 15% to 30% over listing price. In less desirable areas, offers may go 5% to 10% over listing prices. It’s rare for a “ready to move in” house to sell at or below listing price. There are too many buyers and too few sellers that a house can have 20+ competing offers that drive up the purchase price through a bidding war.
House listing can be underpriced to attract buyers to view the house and make offers. Sometimes a freshly renovation house pops up that looks amazing with a low listing price. A good way to tell if a listing is underpriced is checking online listing sites where there are estimates of how much the house will go for. A telltale sign is a house listed for 1.1 million but has an estimate of 1.3 million is a good indicator. The estimates are not 100% accurate but it’s within the ballpark.
Average Sale Time
Houses can go into sale pending around 7 days of being listed and popular houses are even shorter with around…
