Wow, 2015 was a hot real estate market on the Peninsula. In 2014 the market started to really take off and in 2015 the market was red hot and spiking. Multiple offers were the norm; overbids of 15% over the listed price, or more, were very common. Now it seems as though the huge overbids have begun to subside.
Today we appear to be headed toward a more balanced market. However highly desirable locations, and homes, are still receiving a lot of attention, multiple offers, and overbids.
Since the start of the year sellers, and Realtors, have been used to getting multiple offers. At this point it appears that sellers may need to be a little more realistic about their asking prices and what they expect to realize from the sale of their homes. Today pricing a home properly from the beginning is extremely important. A seller should listen to a Realtor who has extensive local experience with current pricing.
A home that is listed at a price that is too aggressive for the current market may sit on the market for several weeks with no offers. We are witnessing that phenomenon at this time. At that point a seller who expected multiple offers and overbids will find that they have a “white elephant” on their hands and will only attract offers below the asking price.
The Bay Area real estate forecast for 2016 in general is that there will be a slowing trend in appreciation. The Bay Area’s real estate market has been one of the hottest markets in the entire nation. Most experts agree that prices have peaked and that there will probably be a leveling off period in 2016.
Obviously it takes money to buy real estate, and money comes from good jobs. The Bay Area has had a very strong jobs market; particularly in San Francisco, down the Peninsula, and to San Jose. Silicon Valley is one of the highest income areas in the nation. Incomes are predicted to continue to grow and California developers expect to build more commercial and residential space in 2016.
Developers are feeling very bullish and plan to continue building office buildings, apartments, and homes. There is more building going on up and down the Peninsula than we have seen in decades.
Along with this phenomenon, real estate rental prices that have soared in the past couple of years are expected to moderate in 2016 as new apartment buildings being completed are coming on line.
This article was published in the San Francisco Examiner.
Articles are written by Eric Ruxton and Larry Aikins, owners of Terrace Realty, Inc. and Terrace Associates, Inc. in Redwood City. Terrace has been in business more than 55 years and in addition to being an independent Brokerage Company, also owns and operates rental properties.