In a recent editorial in The Kernel, the author cited signs of the “bubble” heading in the direction of a burst and gave tech nine months. But in the heated real estate market, any such collapse is unlikely to happen, according to agents in the Mission District.
One of the people to see the Kernel piece was Jonathan Dearman, a San Francisco native and a realtor for the past 20 years who says he has has lived through five waves of gentrification.
“Everyone thinks there’s this bubble that’s going to break,” said Dearman on Saturday as he sat on the steps at 2709 Bryant Street hosting his latest open house. “It’s a real fear and concern, but I don’t think that’s going to happen in the housing market, because there is just a lack of space.”
Other realtors agree. They say the home selling market is just too strong for any devastating burst. Unlike companies that disappeared after the last tech bubble, houses stayed on the market longer, and stopped selling for over asking prices, but there was no collapse.
“Everyone loves to talk about a bubble…but the last bubble burst in 2008, and it only took San Francisco five years to come back even stronger than it was before…This market in this city has always been more resilient than any other community,” said Harry Clark, a broker with Zephyr who was spending all weekend showing a house at 25th and Bartlett Streets with his partner Daniel Fernandez.
The two plan to start taking offers on the $1,998,000 house this week after two full weekends of open houses.
“That’s pretty much all it takes in this market,” Clark said.
They said they had at least 200 people view the house on the first weekend it was open.
This, of course, means that being a seller in today’s market is still far more attractive than being a buyer.
“There’s just not a lot of inventory,” said Roxana Melgarejo, who works for Vanguard Properties and has been selling many properties in the Mission in the past few months.
She’s had very few problems selling all but six of the 39 units in the new building at 1875 Mission Street, which offers a rooftop pool and dog run.
“Some of the buyers are tired. But then they become realistic. They have to adjust their price point. Everything is going for over…A fixer can be $1.4 million,” she explained.
In her eyes, today’s market has one big difference compared to how things looked before the last burst in 2008.
“Here’s the difference. In the last burst, the buyers weren’t qualified. Now they are. There’s even a lot of cash buyers now,” Melgarejo said.
This has also meant that neighborhoods beyond the Mission that were largely ignored in previously strong real estate markets are now becoming just as attractive.
“People are looking at neighborhoods they never would have before. Dogpatch, Mission Bay, Ingelside,” Dearman said.
Of the Saturday open houses listed on Redfin, a popular realty website, the cheapest one available in the Mission was a one bedroom Tenancy in Common unit Dearman was showing on Bryant. The asking price is set for $579,000.
If it goes for well over asking, though, it will be out of Linda Chen’s price range. Chen, who owns a home in the Portola district, has been helping her 30-year-old daughter search for a home for less than $600,000 for the past year.
Chen could be heard making disparaging remarks about the size of the Bryant Street TIC.
“The search has been terrible,” she said.
“The hardest part of this market is for entry-level buyers,” Clark said. “They are at a place in their lives where they want to buy. They are committed to this city. They are qualified, but it takes a lot of backbone,” he continued.
This is true of Lyndsay Murrow and Jan Lui, who were also wandering around 2709 Bryant. They are both now doing their postdoctoral work in the medical field and would like to be able to buy a house in a desirable location. They are currently renting in the Upper Haight, but want to move closer to the Mission.
“It’s where all the young people are,” Lui said.
So far, the couple has only been “50 percent looking” for about five months.
“It’s pretty discouraging,” Murrow said, referring to the buyers’ market.
At another open house on San Jose Avenue for a two-bedroom, top-floor unit, a group of well-dressed, 30-something women could be heard poking fun at the limited amount of space being offered for $1,095,000.
“If you put a partition over there, you could rent it out for $2,000,” one of them said to the others.
They explained that they are not bothering to try and buy right now. They will sometimes wander into open houses if they are passing by.
“The market is impossible right now,” one of the women said. Her friend nodded in full agreement.
Dictation typos- “clawing” not “calling” etc. I’m sure you get the point.
“Everyone thinks that there is this bubble that’s about to burst.” Was this the same people that gave you a heads up on the Y2K problem? How about “it’s a very real fear.” Very true, it’s really is a fear. But nothing else (very real fear). Not to mention the demise of the tech industry in nine months is about as likely as the real estate industry going to bust again in the next nine months. This is a much different time, and the deals produce value and are based on real fundamentals not an artificial real estate market that is been blown out of portion either. So many people claim to understand technology, and finance but really don’t. The bubble you referred to is no different than the bubble you are in yourself. Real estate in San Francisco obviously does not have the same appeal that you could find elsewhere in the country for a lot less. That means lower values but people are willing to pay it and the market will bear it. Now you are priced grossly disproportionate to others and corrections are absolutely possible unless you are tempting fate right now. People should advise others on what they do know. Not that it matters but I was a RE broker, an agent, a licensed appraiser, I have lived in the city, and I’m very familiar with the tech community ( or I could be right), and I am part of “everyone.” If it makes you feel any better, there is almost no indication whatsoever (other than Mark Cuban trying to get valuations down to a level where he could afford them). that any of those predictions are really even relevant, because all markets go up and down. You guys literally think you understand venture-capital and technology in this area better than you understand real estate how well do you know your own market ( you apparently think it’s invincible). You are aware that there was just a real estate bubble and the entire country has been calling its way back. You could look at that as resilient or you could look at that as damage you’re recovering from still. Because you’re speculating about both industries, clearly. It may serve your personal interest (the sellers and agents) but drumming up fear about another industry so that they can keep you in mind, and invest in your “safe” investment, that you’re not even sure is absolutely safe is possibly it’s being a little reckless. No one in real estate or anywhere else is going to return a guaranteed investment. That includes you of course. Then consider that investment in technology produces vastly more returns then anything real estate is ever come close to. You can have a few down years if you return that much more than a real estate investment that is still speculative. Who’s to say what will happen to the San Francisco real estate market. I will predict that it’s going to be dead in six months or nine months, because that is merely your wish so that investment would flow to you. But let’s not pretend it’s a plan.