The San Francisco and North Beach real estate market is hot. Thanks to the beach, the weather, the career opportunities, and the overall fun to be had in San Francisco, people continue to flock to the area. There are no signs of this changing anytime soon. Currently, homes are selling at an average of 7% over the listing price and in about half the time as they used to. It is a competitive seller’s market. The rise in interest rates and fees may slow buyers down a bit, but this likely won’t have a dramatic effect. This is because there are not enough homes to go around for everyone who wants or needs one.
As long as inventory is low, we will be in a seller’s market. This means buyers are at a disadvantage. Here is what you need to know to gain a competitive edge.
Key factors to buying in San Francisco’s low-inventory market
Patience is key
Remember what is important to you. Write it down. Keep that vision at the center of your search. You will need to be realistic about what is available in your budget. Knowing what your must-have features are — compared to the features you want to have — will help you a great deal in selecting the best home for your needs.
Have your finances secured
If you’ve already lost a bid on North Beach real estate, then you already know how important it is to have cash ready to put down. When a seller receives multiple bids on their home, they are not going to accept an offer that is contingent on the buyer selling their current home. Your finances need to be secured and ready to put down when you make an offer.
Being pre-qualified for a loan helps, but having the cash on hand is even better. If you currently own a home, talk with your lender about getting a home equity loan or a bridge loan. This will give you cash to put down right away. Then when you purchase the home, you can pay off the other loans. If you are a first-time homebuyer, make sure you have the cash for your deposit. It might also help to talk to your lender about a personal loan to give you some cushion.
Be ready to strike
When the seller accepts your offer, be ready to move. During negotiations to win the bid on the home, the seller may want to move quickly. Maybe they are moving out of state and need to wrap up the closing. If you are ready to close and move fast, you are in a competitive position.
Know what you need
If you look at enough homes, a scenario such as this is bound to happen. There is nothing wrong with wanting this new desirable feature. If you can get it, then you should go for it. However, don’t sacrifice any of your must-have features. If you do, you will be right back in the situation of needing to buy a different home, which is exactly what you need to avoid. Think long-term, so you have the right home to build equity in and grow your wealth.
Short-term rentals are always hot in the Bay Area. Just be sure you understand the rental laws for the city, state, and the area the property is in. Luxury condos are great investments for short-term rentals, but not all condominium developments allow them. If you have the financial capacity, and a team of people with the right skill set, building a new residential development could be very lucrative right now. It will also help solve the inventory shortage.