Buffett's Wisdom: Seizing San Francisco Real Estate Opportunities

Famous quote by Warren Buffett about fear and greed

Buffett's Wisdom: Seizing San Francisco Real Estate Opportunities

Warren Buffett, known for his sage advice, once said, "Be fearful when there is greed, and be greedy when there is fear." This philosophy is particularly relevant in today's unpredictable real estate market.

The 1980s:  Lessons from High Interest Rates

     Reflecting on my early real estate days in Oregon, I recall the challenges of exorbitantly high interest rates. Despite these obstacles, we found creative solutions, like arranging for clients to board their future horse at the sellers' farm, enabling the sale. This era taught us resilience and ingenuity in the face of economic adversity.

     Regardless of mortgage interest rates that peaked at 18.63% in October 1981 (according to Freddie Mac data), their highest point in modern history, people still bought and sold homes. As long as babies are born, people get married, and lives change, people will continue to buy and sell homes.

Homeownership:  Still Part of the American Dream

     Despite generational shifts, a recent Lending Tree survey shows 94% of Americans still see homeownership as a crucial aspect of the American Dream. Even Gen Z, skeptical about their prospects, shows a higher rate of homeownership than Millennials and Gen X.

What about now?

Should you buy a home? Should you sell your home?

     It depends...your situation is unique. What are some reasons for doing either–or both–and wherein lie the opportunities to save or make money?

Today's Market:  Navigating High Interest Rates

     With high interest rates expected to persist until late 2024, we're seeing downward pressure on prices. This economic landscape presents unique challenges and opportunities in the San Francisco real estate market.

San Francisco's Real Estate Dynamics

     San Francisco's housing market is witnessing a paradoxical trend: while most parameters are declining, median prices have risen by 4.9% over the past year. New listings are down 10%. Active listings are down 12.6%. Pending sales are down 6.8% and sold listings are down a whopping 13.2%! Then it becomes a matter of supply and demand. Decrease in supply typically means higher prices.

     However, an increase in sellers incurring losses indicates a potential advantage for buyers. It's a complex time to buy, with reduced inventory, yet overall prices are lower than their peak in spring 2022.

Their loss could be your gain.

  The good news:  prices are not going up by much and are down overall from the Covid frenzy. 
--> This could be a good time to buy.
The bad news:  prices are down and not likely to increase by much soon.
--> This may not be a good time to sell.

(These are two sides of the same coin.)

Opportunities in San Francisco Real Estate

   Let's explore three options that enable you to enhance your property without any immediate financial outlay, retain your existing home, and/or buy a new home before selling your current one.

1. Renovate and Sell:  Intero's Pinnacle Program

     My mother used to say that you only have one chance to make a goo  d first impression. This applies to your home as well. Buyers do not want to buy problems. They want to walk into your home and imagine themselves living there. Preparing to make a good first impression takes planning, time and money. 

     Our Pinnacle Program offers renovation, cosmetic updates, and elite services to enhance your home's appeal. This program allows you to invest in your property without immediate out-of-pocket expenses, increasing its market value and attractiveness to buyers.

  • Renovation Projects such as new flooring, kitchen and bathroom inprovements, and roofing repairs
  • Cosmetic Updates such as painting and professional staging as well as decluttering and landscaping
  • Elite Services such as moving and packing assistance, trash removal, and deep cleaning.

--> Reach out to me for more details.

     The nicer your home appears, the more buyers it will appeal to and the likelihood of multiple offers and/or a higher price increases. More importantly, ALL of these services do NOT come out of your pocket upfront. 

graphic about Intero's Pinnacle program

2: Innovative Financing Solutions

Photo of Golden Gate Bridge with words Types of Bridge Loans

     Navigating the right financing options is essential for a seamless experience when buying a new home without selling your current home first. I recommend exploring your options with a few lenders who offer a range of innovative financing solutions, including several bridge loan alternatives. These options include:

  • Conventional Lenders--Offering a variety of loan structures tailored to your unique financial situation, ensuring a smooth process in your real estate transactions.
  • Home Equity Line of Credit (HELOC)--Utilize the equity in your current home to secure funding, providing flexibility and accessibility to funds for your next purchase.
  • Loans on Departing Residence--This option allows you to leverage the value of your current residence, offering financial leverage for your next home purchase.
  • Private Money Lenders--For more personalized and potentially quicker financing solutions, private lenders can offer unique terms that might better suit your specific needs.

     Each of these options has its own benefits and can be tailored to fit your individual circumstances, ensuring that you find the best financial solution for your real estate goals. I am happy to refer you to one or two of my lender colleagues who can guide you as to the best option for you.

3. Strategic Buying and Selling Using Prop 19

Key points about California's Prop 19

     Leveraging California's Prop 19, we can explore long-term strategies for buying low and selling high, maximizing your investment over a two-year period.

Conclusion:  Timing is Everything

     Deciding whether to buy or sell in San Francisco's fluctuating housing market depends on individual circumstances. While waiting might yield a higher selling price, it could also mean higher buying costs. As interest rates eventually decline, we anticipate a surge in prices. For personalized advice on navigating these options, I invite you to contact me for a private consultation.

--> If any of these options sounds interesting to you and you would like to discuss in more detail, please reach out to me.

P.S. I regularly put on Home Seller Seminars to educate homeowners about the best practices to sell their home for the most money. 

                           -->Go here to learn more and/or to register 
for the next one on January 20, 2024.

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