It looks like San Francisco real estate market is on fire. 

Everybody talks about it, sale pending and sold signs seem to pop up here and there, open houses flourish every week end...


We asked Misha Weidman, specializing in San Francisco real estate, to answer some questions and give us some practical information to help you make your own mind up and eventually start looking for a place to buy.




The real estate market looks like it is on fire in San Francisco.  Is it true?

Yes it is, for better and for worse.  Most neighborhoods in the city are back at the record prices they reached before the Great Recession in 2007/2008. Many of the more luxurious neighborhoods have in fact surpassed their previous highs.  While this is obviously good for people who already own a home, it makes it very tough for people who are trying to buy.  Inventory – the number of homes available for purchase – is at a record low.  Multiple offers and bidding wars on attractive properties are common. Properties can go for 10% or more over the asking price. 


Click on the picture to enlarge it.




If that's what's going on, what do asking prices really mean?

With so many buyers chasing so few properties, the list price is just the starting point. In fact, it is a conscious strategy to price properties under their “market value” in order to encourage a bidding war.



So what would you recommend for people coming from Europe to do?

First, I don’t recommend that anyone even consider buying unless they have at least a five year time horizon.  You are at greater risk of having to sell at a loss, especially when prices are so high.


Secondly, take the time to familiarize yourself with the different neighborhoods in SF before deciding where you want to buy.  Unfortunately, it’s also a very difficult and expensive to find places to rent – especially homes large enough for a family.  But that’s a better alternative than buying in an area that you discover you don't like so much in the end.

For example, one thing many people don’t realize about SF is how many microclimates the city has.  And many people don’t know that the weather is actually the worst in the middle of summer.  Some neighborhoods are almost constantly in fog and wind between June and August. 


Anyhow, price remains one of the main criteria in the decision process. Below is an interesting picture of San Francisco...


Click on the picture to enlarge it. 



And finally, it is essential that you begin by getting your financing in place.  Obviously, if you can make an all-cash offer on a home, you have a huge advantage.  But for everyone else, being pre-qualified for a loan is absolutely essential.  If you are a not a US  resident or citizen with an established “credit score” in the US, the process can be more difficult.  Working with French or international banks that have a presence in the US can make this process easier.




Thanks a lot Misha for these comments and recommendations.



If you want to read more about the real estate market events, development, evolution, trends... we advise you to check, the blog presented by Misha Weidman that offers detailed information, pictures and charts about the San Francisco and its real estate market.





 October 2013.