Does lack of inventory affect the market?
A: Housing construction has not kept up with new job creation over several decades. The resulting housing shortage and high cost of housing can be a drag on the Bay Area’s economic engine. The lack of inventory is caused by several factors: Geography: The Bay Area’s abundant waterways and hilly topography limit the amount of developable land closest to employment hubs in the city and Silicon Valley. Property tax policy: Since the passage of Proposition 13, property owners are incentivized not to sell, so they can keep their property taxes low. Some city governments prefer to develop commercial property rather than housing because it costs more to provide new residents with schools, parks, fire departments and police support. Local governments: Zoning laws can severely restrict the size and density of new development. City building departments are illequipped to review and approve new projects quickly. Cities within the region do not easily coordinate on regional planning issues. NIMBYs: Certain factions will oppose any change in their neighborhoods and in their cities. Developers are viewed as the bad guys. Since it is unlikely that any of the above will change any time soon, one should accept the lack of inventory as the new normal and plan accordingly.
John Solaegui, Paragon Real Estate Group, (415) 999-0673, jsolaegui@paragon-re.com.
A: Our beautiful open spaces and wetlands and the limits on new development make the Bay Area one of the most desirable places to live in the country — and the most expensive.
The restrictions on new construction in many communities in the Bay Area have contributed to the lack of inventory.
As Realtors we have had to get creative in trying to generate more inventory. We are constantly networking with our peers sharing information, writing letters to homeowners in areas our buyers have identified as neighborhoods that they are interested in, contacting expired listings and walking neighborhoods. Would-be sellers aren’t listing their homes, as many of them who wish to purchase their new home in the Bay Area are also experiencing the frustration of lack of inventory.
Quite often a buyer will include in their purchase offer a rent back to the seller to stay in the home after close of escrow for a specified time. Many times a seller finds this offer very attractive because it allows the seller time to purchase their new home and not make the offer contingent. We are seeing signs that more homes are coming on the market after the Labor Day weekend, which will be good news to many home buyers.
Kathleen Daly, Caldwell Banker, (415) 519-6074, kdaly@cbnorcal.com; Lisa Lange, Coldwell Banker, (415) 464-3318, lisalange@coldwellbanker.com.
A: My main advice is to be proactive, things don’t usually just happen.
I can’t tell you how many times we have found homes by just reaching out and asking if a particular homeowner is thinking about a life change or a move when we see they have something that a client may be looking for.
As far as agents, they often know people thinking about selling, who may not want to do so without a little push or an offer in hand.
I tell my team, you have to be willing to dig under rocks to find opportunity.
In general, I feel San Francisco has a pretty stable market, however we can’t control external factors like politics, stock markets or world happenings. Circumstance can be friend or foe.
Fortunately, this city is one of the most exciting and sought after locations to live in the world, so we are usually minimally impacted and the first one back up on our feet.
Rachel Swann, Vanguard Properties, (415) 225-7743, rachel@theswanngroupsf.com.