Is This a Good Time to Buy a Home on the San Francisco Peninsula?
People often ask me when is a good time to buy a home. Is now a good time? After following the market trends during my 24 year real estate career, I believe the answer is YES!
There is always a transition cycle at this time of year, with vacations winding down and kids going back to school. There is a lull in the market with less competition regarding quantity of offers (but not necessarily a lower price).
When you can obtain a loan at 3% or less, money is almost free. Low mortgage interest rates and pent-up demand will bolster home sales.
Before the pandemic hit, the stock market was at 27,000. It dropped to 18,200 once it hit. The market has recovered and is currently hovering around 34,000, with a high of 35,631.
More reasons now is a good time to buy property in the SF Bay Area:
- 2018 was a peak in SF Bay Area real estate prices. Specifically, the median property price in San Francisco declined by 11.5% from its early 2018 peak, which is significant. That’s a 56% decline in the value of a 20% down payment.
- A rebound in the S&P 500 and tech companies. The S&P 500 returned 31% in 2019, while tech giants like Apple, Facebook, Google, and now Tesla have had GIANT years. The S&P 500 was up 16% in 2020 and the NASDAQ was up a whopping 42% in 2020. 2021 has been another banner year for stocks. Some of those gains will be diversified into real estate.
- A sharp and sudden decline in mortgage rates thanks to the Fed committing to 0% – 0.25% on the Fed Funds to combat the Covid-19 pandemic. Mortgage rates are at all-time lows. As a result, affordability is up.
- The NASDAQ is reaching new highs. NASDAQ is obviously very tech heavy and the SF Bay Area has the most and largest tech companies in the world.
- Rents are rebounding quickly, putting upward pressure on prices.