One thing that we know is that inventory is very low in San Francisco right now. There are a number of reasons for this. A recent NYT article discussed the fact that one reason inventory is low is because people are moving less, that it seems to be the new normal.
I see signs of this regularly in San Francisco: For various reasons, my clients are not moving or if they are, they aren’t selling!
A sweet couple I helped buy a small home in the Glen Park neighborhood a number of years ago had one child on the way when they moved in. Now they have two growing children and not enough room. But they love their neighborhood and to “buy up” is a challenge as prices keep rising. This is one of the things I hear often: “I’d love to move but where can I afford to move to in San Francisco?”
Yet another couple who lives in St. Francis Woods, who bought their home four years ago, needs more space for their growing family. They have been casually looking at homes that come on the market in their neighborhood, but with little inventory and nothing that has interested them so far, they recently told me that they will likely remodel their current home to accommodate their growing needs instead of selling their home.
If people are moving, they often are not selling; they are renting their condos or homes instead. Take for example a lovely couple I sold a condo to in Noe Valley. They enjoyed living there but several years into their marriage, the wife became pregnant and they needed more space. They decided to move outside of San Francisco into a home but instead of selling their condo, with rents so high they decided renting it would make more sense. Another couple I helped two years ago were moving out of a one-bedroom condo in the Yerba Buena neighborhood for a larger three-bedroom condo in Eureka Valley. Instead of selling their one bedroom condo, with the high demand for rental property south of market they decided to rent their condo. These are just two examples of clients who kept properties off the market and rented them instead, helping keep housing inventory low.
As this demonstrates, inventory is low in San Francisco for a number of reasons – people staying put because they can’t afford to move up, people remodeling instead of selling and buying another property, and finally, people moving but renting instead of selling since rents are so high. Unless this pattern changes, we can expect to see low inventory and frustrated buyers for some time to come in San Francisco.
Though I hate to lose a potential sale, being a strong advocate for property ownership in San Francisco as a terrific investment, I completely understand why folks would hold onto a property. But if you are a seller considering your options feel free to contact me and I promise to give you objective advice – I always put my clients’ best interests first!
And if you are a buyer don’t get discouraged. I have a good history of finding properties for my buyers. Contact me and I’ll tell you about it!