SF Bay Area Real Estate Market Update May 2020.
This is the summary of our 2 past Webinars from Apr 17 and May 4. The next one will be held in English, we keep you posted.
The Bay Area Real Estate Market is specific and different from whole US.
– I see less offers submitted for homes at highly desirable areas, which are at a lower range, due to COVID-19 and open house restrictions.
– Some prices went up (2%-6%) due to inventory shortage with variations from city to city in March, mid April. It’s possible to win an offer at listing price or a bit below as of today.
– Flippers are still actively buying. Houses with good potential can get up to 15 offers as of today.
– Due to COVID-19 influencing the stock market, many buyers do not have disposable cash to submit bids over asking price on homes, as majority of downpayment is usually held in stocks.
– Many listings were withdrawn or cancelled from the market at the beginning of the shelter-in-place order. Meaning there will be a potential jump in inventory after shelter-in-place restrictions are lifted.
– Slight price decrease on luxury homes, priced at 1,5 mil and up.
– New construction was stopped, which created more shortage and delivery delays. Some cities raise prices due to demand, some drop.
– San Jose homes under 1mil with good schools averaging 8 days on the market in March.
– San Fransisco, on contrary, experienced a little price increase in March – April for single-family homes. As of today some areas sell for asking price or below.
– 35% -40% of homes bought for cash in Bay Area and some still are purchased.
– We might see a shift towards the buyers market, if there will be more inventory for buyers.
– We might see purchase price decreases up to 20% in some areas depending on amount of buyers and inventory.
Effects of COVID-19 on Financing:
Debt to income for some borrowers has been reduced to 40% as previously some scenarios allowed for 50% or higher.
Many big banks have limited jumbo loan purchases to 20% down only and some are starting to tighten their guidelines even more.
People with multiple real estate properties may have challenge to buy new one now because of new rental income guidelines, not allowing to use current rental income to help qualify for new loan.
Borrowers with low downpayment and credit score below 680 will have challenge to get loan from any bank now.
Steve Tsvetkov – Loan Broker
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