There are a ton of things going on this weekend, and the weather should be beautiful! SF Beer Week and the SFIndiFest film festival continue, the San Fransisco Giants host the team’s annual admission free FanFest at AT&T Park, Tulipmania inundates Pier39 beginning on Saturday, and Chinatown hosts a number of events in anticipation of the larger celebration later this month — this weekend for example you can take in the Chinese Flower Fair and the Chinese New Year Mini-Parade.
On the “Homes for Sale in San Francisco” front, here’s our report for this week, 2/4/18 – 2/10/18
Three Different Cities with Three Different Sets of Challenges
The fundamental real estate challenge we are facing in San Francisco can be expressed in fairly simple terms — on the one hand you have a very low inventory of homes for sale, and on the other there is enormous buyer demand. Consequently, home prices continue to rise and some people hoping to buy homes in the City are unable to do so.
Other markets face other challenges, and they’re worth looking at in part to provide some perspective about what we are seeing here. Let’s look briefly at two markets that are the polar opposites of one another, yet both face real challenges that are very different from ours. We’re going to look at Manhattan and a community in Alabama, as described by articles on Bloomberg.com and in the Wall Street Journal respectively.
Mansions in Manhattan
In Manhattan, the demand for many of its most beautiful mansions has sagged over the past two years as new condominium buildings aimed at the world’s richest people have flooded the market. For the uninitiated, this may come as a surprise because the stately mansions that line Manhattan’s side streets represent a level of privilege that few glassy condominiums can confer. The trend, however, is clear: Mansions in Manhattan have gone out of style. With high list prices, inventory sitting on the market, a niche, high-maintenance product, and a thin sliver of possible buyers, Manhattan’s mansions have entered, over the past two years, a buyer’s market.
Starter Homes in Alabama
Foley, a town on Alabama’s Gulf Coast, is at the opposite end of the spectrum. A recent essay in the Wall Street Journal by Ryan Dezember traced his personal experience — his 10-year odyssey through America’s housing crisis — to shed light on what so many across America experienced. We never really fully felt this in San Francisco, as the City is typically the last in and the first out of any real estate downturn.
The writer bought his house in 2005, just prior to the housing market collapse. This year, he was finally able to sell his home at a tolerable loss, but the road to that sale was unbelievably arduous. The collapse was particularly brutal on Alabama’s Gulf Coast, which was in the midst of an anything-goes building boom when prices crashed. The region fell into a deep funk prolonged by the Deepwater Horizon oil spill and the opioid epidemic. In Audubon Place, his subdivision of starter homes, close to a third of its 109 houses were foreclosed. One of them twice.
San Francisco’s Singularity
Millions of Americans experienced the same thing in communities across the country. In contrast, the housing crisis seemed very distant for most San Franciscans. There weren’t many foreclosures in the City, and the dip in the market was very short-lived. We have our own set of real estate challenges to be sure, but our location, economy, and yes, scarcity of land and unwavering buyer demand, are enormous blessings!