Sales are Off Over the Last Year in Most Regions and Price Gains are Slowing Everywhere.
The Bay Area real estate market changed significantly over the last year. In May 2018 we began to see a significant slow down in home purchases. What followed was a pull back in prices. Year over year 2018 to 2019 ended with very moderate growth although nothing like the prior years double digits growth. Currently we are slightly down to flat year over year depending on your city.
Sellers Need to be Very Aware of This New Buying Process.
When the market cools buyers gain back leverage. Buyers have the time to shop around, wait and see, and not worry about being priced out of the market. They scrutinize and become quite particular about the home they chose to write an offer on, and they have a definite price cap and are ready to move on if a counter offer exceeds their cap.
It is now more important than ever to be sure your home is its absolute best. Work with a Realtor that can guide you in where you should and should not spend money improving your home.
Bay Area Buyers do Not Have a High Threshold for Fixers.
Bay Area residents have the best and worst of worlds at times. While we have a strong job market, terrific weather and healthy economy we also have long commutes and little free time to enjoy the great weather. The transplants to the Bay Area moved here for the benefits, they love their jobs and the great outdoors and are keenly interested in focusing their time on those two items. For every 100 buyers that want to buy a home, a handful of them at best, are OK with a fixer. Not only because they don’t have the time or desire to remodel but also because they don’t have the connections here to feel comfortable doing it.
So What Can a Seller do in a Relatively Short Amount of Time to Improve Their Home Sale?
Hit the high points in the home that catch buyers attention. Focus your money on the spots buyers focus their attention. These are the floors, walls/trim, lighting, kitchen and baths.
Quick updates to make your home move-in ready without a major overhaul can be a relatively painless way to go. Painting the kitchen cabinets, replacing the cabinet hardware, and replacing the countertops can be accomplished in two weeks and will brighten up and modernize the space enough so that a busy tech family that just moved here can settle in and live their ‘California Dream’ comfortably. They will purchase with the plan to remodel to their liking, the key is that they execute the purchase so that you can move on to your new purchase.
Bathrooms can be an easy and quick update. This bathroom was barely updated and ended with a whole new look. It was accomplished with new lighting, new towel bar hardware, a new mirror, and paint. The one on the left screams 90’s, which isn’t old but isn’t new either to the buyers coming through. One young tech buyer told me he won’t look at any homes older than himself.
Make sure your first impression says what you want it to say. Nine out of 10 homes I sell get a new light fixture at the front door. It is so often overlooked once you live in a home and can be replaced and upgraded for under $100 to something that will suit a buyers taste better. Paint color is important, on the left the trim color is not bad however on the right the white with the painted door is a better match to today’s trending looks.
Consider removing old appliances if you are selling after vacating. When the appliances are outdated it causes the buyers mind to think the entire home is outdated, whether it is or not. What you can’t see in the walls matters very little to buyers first impressions. If you have spent the time and money to upgrade heating, electrical, and/or plumbing and you don’t want to buy a new refrigerator for selling put the old one in the garage (just in case the buyer wants it for a garage fridge) and leave the space empty.
Who is Migrating and to Where?
By 2025 California will be a majority renter state, according to the California Association of Realtors. California is losing families to more affordable states, approximately 750,000 people have left since 2010. The main migration states are Oregon, Nevada and Texas. In state, we have seen a very large movement from Bay Area to Sacramento Area.
Final Tips if You Are Selling
It may be well worth it to connect yourself with a Realtor that also manages the improvement process and the contractors for you. The Bay Area is full of contractors that are busy! If you don’t have a connection you may not be able to get the job done in the time you want/need. It will be worth the extra cost to have an expert manage the process so that you do not miss your window of selling opportunity.
Timing in real estate here in the bay area can often mean an extra $20,000 to $200,000 in gains – do not waste time DIY-ing, find the best consultants you can for your home sale process.