This week, there are a pair of items of interest for owners and buyers to consider. The first is the persistent question as to whether recent price increases constitute a bubble. The second is ways to increase your home's value by better use and/or improvement of your yard.
In the first case, we've even added in the factor of a rush of Chinese buyers entering the market locally. Even with this, experts have determined that there is no bubble to be concerned over.
All-cash purchases and international investors are helping drive Bay Area real estate prices to stratospheric levels, but current conditions don’t indicate a looming bubble, Pacific Union CEO Mark A. McLaughlin said in a recently televised interview.
“This is not a bubble,” McLaughlin told San Francisco TV station KPIX in a June 1 interview
. “I think that the dynamics of the San Francisco Bay Area are very, very solid.” McLaughlin pointed to the Bay Area’s “fantastic job market” as a major factor driving price appreciation.
Although liquidity created by the current tech-industry boom — particularly in San Francisco
and Silicon Valley – is certainly pushing Bay Area home prices higher, international buyers and a pronounced lack of inventory are also propelling our local real estate markets.
McLaughlin told KPIX that Chinese buyers have been especially active in the Bay Area of late, citing educational opportunities and lifestyle change as two reasons the demographic targets the region. He estimates that about half of Chinese buyers are currently living in the Bay Area and noted that their investments will likely continue to push prices upward.
“It’s added a demographic of buyers who generally take a long-term view,” McLaughlin said. “They’re not sellers in the next five to seven years. So it is going to drive housing prices up.”
According to the Hurun Global Rich List 2014
, China is home to 358 billionaires, second only to the U.S. In response to demand from Chinese investors, Pacific Union has launched a unique China Concierge program, which offers clients in mainland China a single point of contact to help them buy investment properties in Northern California and parts of Nevada. The initiative includes a Mandarin-language website
hosted in China.
In December, McLaughlin was just one of 10 American executives to receive an exclusive invite to the U.S. Embassy in Beijing
, where he met with some of China’s wealthiest individuals to discuss U.S. real estate investment opportunities.
While Chinese investors are helping to drive up Bay Area real estate appreciation, a slim supply of inventory is also causing prices to rise.
“Demand has just completely outstripped supply of inventory in many of our markets,” McLaughlin said.
So what can hopeful local buyers do to compete in a market increasingly populated with wealthy foreign investors flush with cash? McLaughlin suggests buyers get their financing approved
as early as possible and be ready to act as soon as they see a home that interests them.
Wealthy foreign investors aside, McLaughlin believes that the Bay Area’s natural beauty and inherent attractiveness are perhaps the main reason home prices here are skyrocketing.
“It’s not specifically driven by foreign capital,” he said. “It’s driven by [the fact that this is] a very desirable place to live.”
As regards the second subject on our collective plate this morning, there are a number of ways to step up the value of your property through better use and improvement to your yard. Many are based on the idea of turning the yard into an entertainment center. Follow the link for more info. http://bit.ly/1tOyWjpn
If you have any other questions about your home and its value, or what the market is doing, if you're thinking of buying, give us a call. Peter: (415) 279-6466 ; Jane: (415) 531-4091. We'd be happy to answer all of your questions.