Bidding Wars Erupt in San Francisco
September 1, 2015
Thanks to an influx of high-paying tech jobs and overseas buyers, home prices are booming in the San Francisco Area. Adding to the rise, inventory levels of homes for-sale remain low, which is also sending prices to new highs.
"It's easy to sell," Ken DeLeon, a real estate professional in Palo Alto, told The Wall Street Journal. "The key is getting the extra $100,000."
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The number of new listings in June in San Francisco was down 23 percent year-over-year, according to the San Francisco Association of REALTORS®. On average, listings spent less than a month – 26 days – on the market (compared to 31 days in June 2014). Median sales prices surged to $1.177 million – a 12 percent increase compared to a year ago.
Real estate professionals are reporting that bidding wars are becoming the most common on properties that are below $2.5 million. Buyers are finding themselves having to make offers again and again, sometimes making up to 20 offers before one finally is accepted, real estate agents say.
Roh Habibi, who stars on Bravo's "Million Dollar Listing San Francisco," says one of his recent clients had to make 12 offers on homes before finally winning a bidding war on his 13th offer. He ended up paying $900,000 -- $200,000 above the asking price.
DeLeon was so confident in bidding wars on one of his Palo Alto properties that he asked just a $1 for a small condo he owned. The condo ended up selling for $385,000 –a record price for the complex at the time.
"The challenge now is that sellers aren't even willing to accept asking price these days," says home buyer Nora Dahr, who, so far, with her husband has put in seven unaccepted offers on homes and have increased their budget from $2.5 million to just under $3 million. "You're almost bidding blindly as to what they want, which encourages you to come in way above ask."
Source: "In San Francisco’s Bidding Wars, Home Prices Go Ballistic," The Wall Street Journal (Aug. 27, 2015)
Updated: November 23, 2020