Even the San Francisco Market Softens...

I just wanted to jot my thoughts about the San Francisco market. I'm on the front lines for my buyer clients and I'm seeing a continuing trend of lowered prices and sellers that are beginning to wake up to the fact that you can't always get what you want (a la Rolling Stones) when it comes to sales price.

Case in point: my last 2 buyer clients. In each case, we bid well under the asking price. In last year's market, we would have been ignored by the seller in each case. This year, and specifically now, my clients are getting counter offers, or out-right acceptances.

Why is this? I think a lot has to do with the mortgage market and the fact that it's almost a prerequisite now to have 20% down. In San Francisco, 20% on almost any piece of real estate is a lot of money. Not everybody has that kind of liquidity, so the buyer pool has shruken down. Coupled with the fact that the general sense from my buyers that the market will continue to soften, and you can see the lack of impetus driving buyers to purchase right now. And that feeds the vicious cycle that we're seeing right now. And so the market softens.

Now, for my seller clients, I'm having tough conversations with them that they have to price their property competitively to show value to prospective buyers. It's not a fun conversation, believe me.

In the end, I think that the mortgage market holds the key to how the market shakes out. I'll keep y'all posted...