Truth be told that when a city belongs to a country with an increasing economy, chances are, this city's economy is likely the same as that of its country. But, it seems like San Francisco is the other way around.
Recent reports say that there are a number of buyers who are more hesitant to invest in SF, implying that the city's high-end real estate is no longer what it is, as per Nina Hatvany, real estate agent in SF concentrating on the high end of the real estate market.
According to CNBC, real estate brokers admit that the clamor for high-end homes in SF has slowed down simultaneously with technology as tech suffers and tech stocks slide recently, more so that the City by the Bay's economy relies on the tech sector.
In fact, some realtors even admit seeing the change in the market.
"Somebody who might have pulled the trigger at $5 million last year now might be a bit more cautious. It's not the same environment," said Josh McAdam, a real estate agent in San Francisco.
According to this top producing agent, homes in the $1 million range still have high demands, yet the high end properties in the SF may not enjoy such demand, unless they can really attract buyers.
Reportedly, only one property in the neighborhood of Noe Valley was sold for $5 million above last year but the year before that, there were a lot sold in that range. A few have even purchased $5 million above. According to Hatvany, there were 18 homes sold in SF in the second quarter of last year for $6 million even higher but the number of homes sold has dropped into nine in the fourth quarter.
Moreover, SF has risen to a level unsupportable by area income, moving the city to just drop the home prices, as per Yahoo! Finance.
Meanwhile, Christopher Palmer, associate professor at the Haas School of Business of University of California, said that even if home prices may fall in SF, mortgage default or foreclosures will not be waived. In fact, there is a benefit if home prices are increased.
"To many prospective homebuyers in the Bay Area, this is great news. There is a substantial amount of young families that would appreciate a slowdown in appreciation to be able to get into a home," Palmer added.
