After a hot spring and blazing summer real estate rush, we have gone through our usual August doldrums. Now into the second week of September, we are waiting on our usual back-to-school flurry of deals, but they have not happened yet. Quite frankly, it looks like they might not happen at all. Buyers are rocked with indecision when faced with more than yesterday prices and zany financial news. Listing agents have the worry beads out. The big question in the real estate community is “What does it all mean?” My read? Time to buy.
You can go ahead and file my opinion in the real estate propaganda file if you want, but what I know is very different from what I read. What I read is that Greece is going to take us all down and the Euro issues haven’t even hit us yet. Congress is going to tank us all in order to assure the other party can’t claim success and the economy is heading into the dreaded double dip.
What I know, however, is that Facebook, Google and other significant local companies are in the throes of the largest hiring expansion (you can almost say binge) in their history. We at Dreyfus Properties are seeing these hired people relocating with our own eyes, as they show up at our open houses and call us to find them a home. Local rents are through the roof. I also know that inventory in our little micro-market is on the low side.
So I apply what I know to the classic residential real estate fundamentals. Those being:
- Real estate trends and values, like politics, are local
- Residential real estate values are strongly correlated with jobs.
- The Will Rogers rule (“Buy land, they ain’t making any more of it”) should be appended to read “and especially on the San Francisco Peninsula.”
If I didn’t read the newspaper, I would think we were locked and loaded for a big jump in local housing prices. Oh, did I mention that interest rates are at an historic low? National gasoline on a coming local fire.
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