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Taking the Plunge

Potential buyers' hopes, fears, questions and angst, all addressed here.

by Nina Weiss
posted on July 01, 2007

Credits: Alex Slobodkin

Nationwide, the market is down and foreclosures are up. In SF, they say the market’s only “cooled.” Is now the time to jump in? And are we really bubble-proof? Local real-estate agents maintain that the veritable downturn in many parts of the country is merely a slight slowdown here—and a good buying opportunity. Michael Hirner of McGuire Real Estate (mikehirner.com) says, “Now is a great time to take advantage and buy.” Zephyr Real Estate’s Jackie Cuneo (sf-re.com) puts things in perspective over time. “In San Francisco, values have continued to inch up over the years, including now. We’ve sold fewer homes [this year], but prices have emained stable.” Paul Barbagelata of Barbagelata Real Estate (yoursfagent.com) agrees, saying that “buyers should be prepared for hot and warm seasons, but I do not think the SF market will get really cold unless we experience a major economic dilemma, such as high interest rates.” He does caution that if you buy in this market, you should do it for the long run, and don’t try to speculate. And of course, there’s always the other side of the coin—the disadvantage of not buying. “If you wait for SF prices to drop substantially,” says Cuneo, “you’re probably going to end up buying your landlord a building before you get yourself something.”

How do I know if I’m really ready to buy a house in SF?
There are several tangible steps that tell you whether you’re truly ready to buy, says McGuire’s Rob Levy (roblevy.net). “First, you’ve done your fiscal homework by creating an expense budget and getting pre-approved by a qualified lender. Second, you’re out in the marketplace and are feeling comfortable with properties you’re seeing at or near their asking prices. Third, you have a compelling reason to purchase or move that is fairly time-sensitive. If all three apply, you’re most likely ready.” The first step for serious buyers is getting a mortgage broker to look at your financials, see what kind of loan you qualify for and give you a realistic price range to work with. Finally, if you need just that little last push, the big picture once again proves helpful, says Levy’s colleague Melodie Duke (mcguire.com): “SF is an international city. When compared to cities like London, New York, Tokyo or Hong Kong, it’s a total bargain—a fantastic investment opportunity.”

Are multiple offers still happening? Should I overbid?
Cuneo has a comprehensive answer to this important question, noting she uses three factors to advise clients on bidding. The first are the ever-crucial “comps,” a list of recent sales of comparable properties in the neighborhood, which your agent can get for you. “Focus on what the comps tell you the property is really worth,” says Cuneo. Second is the number of days the house has been on the market. “If the property doesn’t get an offer after the initial marketing push of the first two to three weeks, it may be overpriced. This is an opportunity to present a lower bid.” And the third is what Cuneo calls the “I-want-it” factor. “Certain homes are so charming, they will fetch more than a similarly sized home in the same neighborhood. Historically significant homes, view homes or just-plain-quaint homes generate a flood of interest.” Competition for these properties will be stiffer. Your agent will also talk to the listing agent to find out several important pieces of “insider” information, says Hirner, including the property’s activity levels at open houses, the number of disclosure packages the listing agent has given out (taking a disclosure packet signals serious interest) and the number of confirmed offers—all of which will affect your bid.

What neighborhoods offer the best value for the first-time buyer?
We heard a lot of cheers for the southern and western areas of town. Cuneo says the neighborhoods she considers potential growth areas are the Mission, Central Waterfront, Sunnyside, Excelsior and Portola, which are also some of the city’s most affordable pockets. “I also like lesser-known neighborhoods rich with historically special homes,” she adds. “Westwood Park is full of Spanish-style and Craftsman homes; Ingleside has a few hilly areas dotted with charming storybook cottages and view homes that are convenient to Balboa BART, and Portola is a great spot for the mid-century renovator to find a deal.” Barbagelata recommends Sunset/Parkside, where “the $500-persquare- foot range for homes is still the norm, and you’re close to beaches, parks, golf courses, freeway access and schools.” And while Duke says Potrero Hill has the most bang for your buck right now, she concludes, “A great value can be found in any neighborhood—you just have to be able to recognize it.”

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