Friday, April 18, 2014

Hypocrisy / Deceptive Advertising

Everyone in the real estate business is always looking for an edge -- something that will differentiate you from the competition.

We've seen brokerages try all sorts of things from commission discounts with reduced service, flashy web sites, focus on high-end properties, free estimates, balloons on for-sale signs, spot advertising on web sites -- it's all out there.

At the end of the day, our business relies mostly on personal relationships.  Successful transactions for both sellers and buyers depend on the trust developed between the principal and their agent.

Key to developing that trust is for each party to do what they say they will do, when they say they will do it.

So how do you trust a brokerage that prominently promises on its web site:
What Makes Us Better? We Will Not Cheat On You.  Could you imagine going to court and having the same lawyer represent you and the other side? How silly would that be? At XXXXXX, our agents will only represent either a buyer or a seller in an agreement, never both.

Yet, in the last six months this brokerage has seven transactions recorded in the MLS, two of which they represented both buyer and seller!

Let's be clear.  In California there's nothing illegal about what's called "dual agency" in which the same brokerage represents both buyer and seller as long as it's disclosed to all parties and agreed to and I have no reason to think this brokerage did not obtain the necessary consent from both buyer and seller in these transaction to act as a dual agent.

But if you're going to promise in your advertising that you will never represent both sides in the same transaction (and by inference suggest that your level of integrity is higher than your competition) and then turn around and do exactly what you promised not to do, what does that say about how you're going to handle your responsibilities in a real estate transaction.

Most buyers and seller don't have the ability to check claims like this since this information isn't readily available to the public. Unfortunately, it's just another due diligence step for buyers and sellers when selecting an agent.

Thursday, April 17, 2014

Is San Francisco real estate a good investment ... ?

... even at today's prices?  One of our colleagues has a client who asked this question after their offer was not the winning bid.  (This was the third property property where they lost out to higher offers).

This graphic will let you know how it has worked out over the past few years:

If you expect to hold on to the property for five years our recent history suggests you should be able to ride out even the worst of downturns.

Wednesday, April 16, 2014

Spring is Finally Here, part 2

Some pictures of our next door neighbor's apple tree in full bloom.

Click here for the short slide show.

Market Competition

Our biweekly report on new listings gives us a look at the current market activity.  It shows a lower number of new listings of single family homes but an increase in condo listings compared to two weeks ago.  But the number of listings is well below where it was last summer (when we first started tracking this particular metric).

Click to enlarge.

The percentage of those new listings that went into contract within that two week period has dropped slightly over the past two weeks but still showed almost 17% of single family homes and almost 20% of condos in contract within two weeks.  

Click to enlarge.

These numbers continue to confirm the competition buyers are running into when making offers and which results in significant overbidding and final selling prices averaging 10% over asking.

Wednesday, March 19, 2014

Annual Median Sales Price Continues to Zoom Up

Most of our reports and statistics focus on specific configurations of single family homes and condos.  For buyers and sellers that tends to provide a more realistic picture of the slide of the market their property or prospective property lies.

On the other hand it's useful to step back occasionally and look at the whole picture.  Here's what the annual median sales price for single family homes and condos/TICs/co-ops looks like since 2000:

(Click to enlarge)

The blue line shows the annual median sales price trend.  The median sales price in 2011 was 6% lower than the previous year.  In 2012 the median sales price was more than 12% above 2011 and that trend continued in 2013 when the median sales price increased almost 16% over the prior year.

So far this year (first two months) the median sales price has been almost 12% over 2013.  Prior to the economic downturn the highest annual median sales price was in 2007 which we have now far surpassed.

At the same time, inventory has struggled to keep pace.

(Keep in mind these numbers are derived from listings/sales reported in the San Francisco Association of Realtors MLS system so they do not include private sales and sales of many/most new construction condos).