Some More Good News For Real Estate Sales in the San Francisco Bay Area and Beyond
A few very encouraging reports broke last week that our buyers and sellers should be aware of, as the markets are certainly showing signs of heating up well before the spring season:
Ø The New York Times reports that San Francisco is one of three markets in the USA where rents are rising sharply. San Francisco Bay Area average rents rose over 5% in 2011. Rising rents in an environment of historically low interest rates will convert renters to buyers before rates rise! We expect our markets to feel this impact before Q4 ‘12.
Ø The U.S. Department of Labor reported that 60% of the new job growth in the past two years went to people under the age of 35. This will create further shifts in the geographic (neighborhood) and demographic mix of first-time buyers and then naturally move up buyers.
Ø Warren Buffett commented on CNBC that single-family homes bought on a distressed basis now, and financed over a long term at these historically low interest rates, are a “very attractive asset class.” He added that he’d buy “a couple hundred thousand” single family homes if it were practical to do so and noted, “It’s a leveraged way of owning a very cheap asset … I think that’s probably as an attractive an investment as you can make now.” We clearly see investor activity peaking in most all of our markets.