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 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.