San Francisco Real Estate: Why 2016 is a Good Time to Own Your Home?
Experts claim that 2016 is a terrible time to invest in San Francisco real estate. Prices are going up, and we are expecting a bubble burst in San Francisco. However, the bubble doesn’t burst because of high prices. It happens because of unaffordability index, salary growth, and increasing interest rates. In San Francisco, prices have kept with increasing wages. Housing costs have increased because of rising demand and overpaid employees. Look at the statistics and if you can ignore the temporary “ups and downs”, you’ll see a steady increase in SF real estate prices. The success of SF real estate market depends on the tech boom.
A city cannot thrive if unemployment has prevailed the society. Every investor knows this fact. Serious investors do not play the game to make quick profits. They are here to make long-term money, and every investor is ready for failure as well as success. Having said that, I do no think that 2016 is a good time to invest in commercial real estate. San Franciso is majorly a seller’s market. 74% participants of a survey believe that 2016 is the time to sell your home.
This article is aimed at homeowners and not real estate investors. Here are a few things to consider before buying a home in San Francisco.
Questions to Ask Before Buying a Home in San Francisco
(1) Can you afford it? The average price is $1 million dollar. Can you bear the expenses?
(2) Do you plan to live in the home for at least 7-10 years?
(3) Is renting an affordable option here? If you do not live in the house, can you rent it at a reasonable price?
(4) Do you have a secondary income source to cover the mortgage? What if your company goes bankrupt?
If you have answered “yes”, go ahead and become a home owner. You’ll enjoy the luxurious lifestyle of San Francisco.
The SF Housing market has offered ridiculous prices to its customers. It has affected the most valuable asset of any real estate game i.e. the first time home buyers. The real estate market recovered in 2011. Investors saw their opportunity and since then, we saw many residential redevelopment projects in the area.
“Investors have pushed up home prices rapidly in some markets, and all of the sudden those markets are unaffordable for the traditional, first-time buyers,” says Daren Blomquist (Vice President-RealtyTrac).
So, is it the right time for buying a home in San Francisco? Answer:
It is the best of times, and it’s the worst of times. The situation depends on your side of the coin.
Price Decrease in San Francisco
SF housing market has become unaffordable for many families. Prices will cool down in 2016. Home builders are developing a high volume of new homes. Instead of luxury homes, you’ll see small homes that are perfect for your family. You’ll have more options, and because of bubble burst prices will come down by the end of 2016.
Buying is still cheaper than renting
SF real estate has seen a downtime in the winter season. The home prices will come down in 2016, but you won’t notice a decrease in rental rates. According to SF Curbed, rental prices are expected to increase by 7%.
Conclusion:
A home is not a just a building. It contributes to your lifestyle. Real estate prices remain unaffected if the lifestyle cost doesn’t change. The booming market of San Francisco thrives on the job security and salary growth. In a booming market, wage growth pumps all changes. In a failing market, houses become unaffordable resulting in reduced demand and financial problems. Gradually, prices come down to meet buyer requirements. The same will happen here but on one condition. You won’t see a price decline if the tech companies continue to thrive and tech employees receive ridiculous salaries.