I forget sometimes that people actually read this blog. Â In fact, I’m often surprised when I run into people that actually know who I am after reading my thoughts about San Francisco real estate.Â Usually, the people that recognize me are other agents that read this blog, but sometimes, I run into strangers at open houses or other place that actually recognize my name – and they say that it’s from here!Â
It’s nice to be reminded that people actually read what I write, and even nicer when someone takes the time to write in and ask a question to get my advice!Â Occasionally, I find the questions (along with my answer)Â worthy enough to publish (with occasional edits to keep some of the person’s information confidential).
So here’s a question I recently received that I thought I’d share with the rest of you out there in blog land.
Q.Â I love reading your blogs! Your advice and expertise is awesome,Â I was wondering if you can give me some advice? I have the opportunity to buy a family home in district 1Â for $650,000.Â It needs approx. $80,000 of work. Is this a good deal in the overall spectrum of the real estate market? Do you forsee the market dropping more, and if so, for how long?Thank you, thank you, thank you for your time.
A. Hi S.M.!
Thanks for the kind words about the blog.Â Itâ€™s always nice to hear positive feedback!Â
First â€“ about the place onÂ (location notÂ beingÂ revealved)Â Avenue.Â On the surface, it sounds like a great deal for district 1.Â (How many bedrooms/bathrooms does the place have?)Â But a lot of other factors can make it a horrible deal â€“ from the neighbors, to the layout of the property, to the fact that the $80K estimate to repair the place can easily double.Â (Who gave you the estimate for repairs?)Â So what looks like a good deal on the surface may very well turn into a bit of a nightmare once you actually buy the home.Â The key is to look for neighborhood comparables, and if the price is good ($650K for District 1 sounds good, but to say for sure, Iâ€™d have to see it and see the repair estimate).Â
As for the market in general â€“ there are certain areas where there really hasnâ€™t been depreciation.Â There hasnâ€™t been any major appreciation to speak of either, but prices in District 1 havenâ€™t gone down (in fact, even with fewer sales, median price has increased slightly).Â So in my crystal ball â€“ I foresee that the market isnâ€™t really going to be dipping down much further except for a few select neighborhoods in parts of Districts 3 and 10 where values during the â€œboomâ€ skyrocketed to levels that were out of control, and in my opinion, the dropping values there are more a sign of a market correction (prices there shouldnâ€™t have grown that rapidly) than a sign of the market falling.
A lot of it is also going to depend on your goals.Â How long do you plan to stay in a place?Â Are you single?Â Married?Â Kids?Â Dogs?Â Do you have plans for marriage, kids or dogs?Â There are going to be more decisions that youâ€™ll need to make to decide whether this home is right for you.Â For that matter â€“ the size of your down payment as well as cash reserves will make a difference as well.Â As will who does the repair work â€“ are you handy?Â Is the work just cosmetic?Â Or is there structural work?Â
So â€“ sorry for the lack clarity in my answer, there just arenâ€™t any black & white or yes & no answers in real estate.Â Every buyer/seller/house/neighborhood/lender etc. is different and that makes it difficult to give a cookie cutter answer to any question.Â
If you want to talk more though, Iâ€™m happy to help you to try to get to the bottom of whether this place is a good deal for you.Â My advice is always free and without any obligation to meet in person or to work with me as your agent.Â However, if you do want to meet in person and do need help â€“ well, Iâ€™m available for that as well.Â Just let me know how I can help and Iâ€™ll be happy to accommodate!Â
Please donâ€™t hesitate to call me or email me if you want to talk further.Â Â Â Hope my answers helped a little â€“ even if they were just food for thought!Â