The San Francisco Bay Area real estate scene is scorching hot for sellers, but according to realtor.com, there is one problem -- deciding on what the actual asking price will be.
A Palo Alto-based real estate agent, Ken DeLeon indicated that it's very easy for owners to sell their properties but their main objective is actually how to charge an extra $100,000. A big factor driving this trend is a bidding war that ensues in an extremely active seller's market. In order to get the best price, owners try to spruce up their properties with minor makeovers. Agents say an investment of $15,000 and up is easy to recover with the price of the property soaring up several fold after renovations.
In the same report on realtor.com, the market boom in San Francisco is said to be influenced by an increase in number of high-salaried jobs in the tech industry. And with more people buying rather than selling, the listings are reaching record prices. According to a report made by the San Francisco Association of Realtors in June, new listings are down by 23.1 percent compared to last year. Sales are also being made quicker with the average days spent on the market down to 26 from 31 last year. Average selling price also went up by 12.1 percent, reaching as high as $1.77 million. But despite this trend, bidding wars are still heated for properties that fall below $2.5 million and property buyers can make up to 20 offers before they can make a purchase.
Meanwhile, according to Home Buying Institute, the skyrocketing prices of homes in San Francisco is adding more problems to the real estate situation in the area. The California Association of Realtors released a "Housing Affordability Index" that showed only 10 percent of households in San Francisco have the money to buy a house in the city in the second quarter of the year. A Case-Shiller data also shows that prices in the city for houses increase by 9.5 percent compared to last year.
So the last thing home buyers in San Francisco want to hear about are additional price hikes. Unfortunately, that's exactly what is happening right now. According to the latest Case-Shiller data, home prices in the city rose 9.5 percent over the last 12-month reporting period.