Summer Breeze in a Hot Market - Monthly Newsletter - July 2022

Summer Breeze in a Hot Market – Monthly Newsletter – July 2022

by Anne Laury

Laury Team, Anne Laury, Joel Goodrich, Marybeth LaMotte

The Market Now: Stabilizing Prices, Fewer Transactions, and Potential Profits for TICs

Amid signs of cooling off, home prices in San Francisco pointed towards stabilization in the second quarter. The average price per square foot crept 1% lower than the first quarter. Despite rising interest rates and uncertainty in financial markets our housing market remains strong.

The average price per square foot, $1,141, at the end of the second quarter was up 4% from the same period in 2021 yet slightly lower than the first quarter average of $1,149.

San Francisco real estate is always expensive — our location and shortage of inventory make it so. On top of that, many sellers are willing and able to hold out until they get their price. Sellers know their properties are unique. Buyers know, or learn quickly, that when a good one hits the market at a reasonable price, hesitation is not an option.

Another reason prices remain high is the costs and barriers to building. Affordable housing in California now routinely tops $1 million per apartment to build.

As of June 30, 2022, the median price for a property in San Francisco was $1,540,000; 7% higher than the second quarter of 2021.

Fewer Transactions — some buyers are relaxing for the summer, opting to wait and see what happens in the fall!

The record-breaking quantities of homes sold in 2021 has been replaced with more realistic market activity. The number of properties sold in the second quarter was down by 19% when compared to the second quarter in 2021.

The Moratorium on TIC Condo Conversions Ends in 2023

TIC agreements always include language that says they will condo convert when it becomes available, but that option has not been possible in 10 years! Yes, condo conversions are starting up again. Owners of 2, 3, and 4-unit buildings will qualify. Here are some of the rules the board of supervisors is considering:

Units must be owner occupied for 3 years.
Owner occupancy is required for all but one unit in 2, 3, and 4-unit buildings.
A tenant in the building will get a lifetime lease, established at their current rent plus 2% annual rent increases.

Marybeth LaMotte and Anne Laury, The Laury Team

Please contact me and my team to discuss TICs and other real estate investments, anytime! Our best wishes for a relaxing summer!Sincerely,
Anne Laury and Marybeth LaMotte
The Laury Team