The Bay Area is notorious for its ultra-competitive real estate market and sky-high property prices. It is home to more wealthy people than any other metropolitan areas across the country. The median household income in San Francisco exceeds $100,000 – 74% higher than the national average. Its GDP ranks 19th in the world at $535 billion, beating out national economies.
Nevertheless, the real estate market in San Francisco County reached its peak in 2018. Since then, supply and demand have leveled out and property prices have gone down by 5% to 15%.
Now more than ever, purchasing a San Francisco home for sale is a great investment.
Plenty of alternative investment opportunities
The Bay Area provides plenty of opportunities for real estate investors who are keen on providing headquarters for up-and-coming start-ups. With its proximity to Silicon Valley, the Bay Area is a desirable location for emerging technology operations because it attracts the most funding from venture capitalists. Currently, the city is home to several software companies including Salesforce, Adobe, and NVIDIA.
Just like residential opportunities, commercial investments in the Bay Area come with a hefty price tag. However, with a steady stream of tech companies looking to establish their headquarters in the area, it would not be a challenge to recoup your investment in a relatively short period of time.
Plenty of enthusiastic sellers
The inventory of available properties in the Bay Area is now at its highest in the last seven years. The increase in inventory can be attributed to two things: COVID-19 pushing city dwellers into purchasing homes in the suburbs of San Francisco, leaving behind properties up for grabs. And two, sellers postponing listing their homes around March and April because of the shelter-in-place order. Sellers are now just pushing through with their listing.
With more homes in the market today, buyers are likely to get a more competitive price from sellers eager to offload their properties.
Less competition
Most homes in the Bay Area require jumbo loans from lenders like Fannie Mae because property prices exceed the “conforming limit” of $765,500. With that said, the availability of mortgage loans has dropped dramatically since April due rising unemployment rates, the highest since World War II. Therefore, lenders have become risk-averse when it comes to approving loans.
If you have a great credit score (740 and above) and the resources to pony up 25% of the property’s asking price as down payment, you won’t find yourself competing with a lot of buyers. You are likely to close on a property with only two to three competing bids instead of the eight to 10 bids that were typical before the pandemic.
Invest in the San Francisco Real Estate market today!
Let me, Amir Hardy, provide expert advice on how to navigate through the larger-than-life Bay Area real estate market. With years of experience, I can help you make the investment of a lifetime. Call 415.602.0570 or email amir(dotted)hardy(at)compass(dotted)com to get started.