San Francisco Real Estate Is Rough, Now for Rich Folks, Too

Three weeks ago some clients wrote a $1.25m offer on a 1400 square foot 3-bed, 1-bath house with original kitchen and bath near San Francisco’s Delores Park. They weren’t even close. There were 51 offers. It sold for $1.4m and closed 8 days after offers were due. That’s the most offers I’ve seen in 10 years. And a different property at that week got 23 offers.

Two weeks ago, another client offered $245k over list price on a 3-bed, 2-bath Pacific Heights condo. One of the other 9 offers was the winning bid in this $1.6m to $1.9m market segment. That was my client’s fourth rejected offer. He’s looking at two properties in this price range this week, and the listing agents are reporting similar demand: about 10 serious buyers circling.

That’s the norm. It’s what some are calling The Facebook Effect on San Francisco real estate.

— Mortgage banker Julian Hebron blogs explains why the upper tier San Francisco real estate market is going craaaaazzzyyyyyyy right now, and doesn’t look to be slowing. Basically: Social media companies keep being given valuations in the billions (Pinterest! $1.5 billion! Twitter! $8 billion!), creating slews of “liquid millionaires” all eager to buy up housing stock. But: For homes above $1.5 million, Hebron reports that “there are only 550–600 sales per year.” There are more rich people than fancy apartments and houses in San Francisco. Which means some of them are going to have to move to the East Bay. Like PLEBES.

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