6 minute read
How to value your home accurately in San Francisco, by Norman Green.
By Norman Green
Assuming that you bought your home in San Francisco some ten years ago, how much would it be valued today?
I have seen a common question on social media threads, and I thought, why not answer it.
And for those of you concerned, your question is legitimate.
I often see people just valuing their homes based on estimates provided by some website.
Well, there is nothing wrong with that, and in some cases, it might work, but what if you may be overpricing your home? Which may cause your home to stay on the market longer than usual? Or what if you are underpricing your home?
Using online calculators is good, but there are limitations. And even before your value your home, it is important always to understand that a home’s value or worth is whatever someone is willing to pay for it.
THAT’S IS IMPORTANT, HOW MUCH WOULD YOU BE WILLING TO BUY THE HOME YOU ARE SELLING?
You need to have this conversation with yourself before even looking to see what others are saying or selling their homes. The long version of that answer would depend on many factors, including the market conditions, the average selling price of other homes in the neighborhood, and such factors. Also, it may depend on what other people or entities have to say about the value of that particular home, for instance, your lender, your agent, or the tax assessor.
ANALYZE YOUR MARKET
This is the first step you have to take to value your home in San Francisco accurately.
Most people want to get a feel of what the market looks like before they can put a price tag on their home. No one wants to go along with their good intuition. Knowing the market is the smart thing to do.
We know that San Francisco is an expensive market, and the median sales prices of homes in this market shot up for 83 consecutive months from April 2012 until March 2019.
That is one fact you have to keep in mind.
Therefore, assuming that you bought your current home in 2011, it means you are likely to bag a reasonable profit for the sale of that home.
Secondly, looking at other metrics, the average median home value in San Francisco rose 90% between 2009 and 2019, from $715000 to $1.36 million, but that’s just for the Metro. Looking deeper into the data, you’ll find that areas such as Oakland shot up 77% in the same period while in some other neighborhoods, home’s value shot up more than 100%, including Bayview (116%), Forest Knoll (112%) Bernal Heights (111%), Mission (109%) and so many others.
I am trying to make sure that the location will also influence the home’s value by a great margin. Have you ever heard of the old saying that real estate is the location? Well, it is a fact that has been stood the test of time.
BUT WHAT IS CAUSING SAN FRANCISCO TO BE SO EXPENSIVE?
Mainly, the past decade has experienced an influx in tech industries.
The tech boom in San Francisco was largely due to the tax incentives that aimed to attract companies to silicon valley.
In return, the city had a high price to pay- the cost of living.
It attracted a large force of skilled workers while neglecting its nonskilled workers, and the result is quite evident - Skid Row. The cheapest neighborhoods in San Francisco were suddenly “flooded with a tremendous amount of new money, and prices have gone up exponentially” as people were craving affordability and convenience.
Anyway, where am I getting with this? First, you must understand the local economy influences so much the valuation of your home.
Were there cheap homes in San Francisco? Yes, a lot of them, but because of the local economy boom, everything became so expensive.
So is your home; depending on where your home is located and the status of the local economy, you might be forced to value your home relatively higher than you would in other places.
These are the two main points I wanted to drive home before showing you how to value your home in San Francisco accurately.
How do you value your home accurately?
COMPARATIVE MARKET ANALYSIS (CMA)
This might sound complicated, but all I mentioned above was part of the market analysis that you should first do before giving your home a price tag. When you are ready to value your home, give me
a call today! Real estate agents are your best resource if you want to understand better how the market looks like and what value to place on your home.
Even though the CMAs may not be as detailed as a professional appraiser would be in most cases, they provide you with an evaluation of the home and market, which will ultimately help you determine an estimate of value for your home.
THE FHFA HOUSE PRICE INDEX CALCULATOR
This is another valuable resource at your disposal.
The FHFA house price index (HPI) calculator applies a scientific approach to help you determine the value of your home. Basically, the FHFA is an aggregator of transactions gathered since the 1970s, and therefore what its HPI Calculator does is that it determines the value of your home using the repeat sales method. This method tracks the change in value from one sale to the next and then uses that information to estimate how the values fluctuate in a given market.
HIRE AN APPRAISER
As a homeowner or a property owner, you can hire an appraiser to estimate the home’s value at any time. This, I think, is the most popular method because about 28% of U.S homeowners determine their home’s value using an appraiser.
One of the things that the appraisers will look at is the overall market condition. They will look at the region, the city, and the neighborhood where the home is located. In addition, they have to assess the house’s condition, including They then combine this information to create a final opinion of what the home could be valued at. Do you need an agent to value your home? If so, it may be a good time to talk to Norman Greene, one of our VIP agents in San Francisco, or you can speak directly to Eric Lawrence Frazier MBA, a mortgage professional with over 30 years of experience. You can reach Eric at 800-261-1634 ext. 703.
ABOUT NORMAN GREEN
DRE#01337466 | San Francisco
Norman Green worked as an entertainment promotor for twenty years, where he learned and honed the art of promotion. During this time, he promoted local events as well as a regional concert. He is one of the few African American brokerage owners in San Francisco. He has been a proud owner of Re/Max Prestigious Properties located in the beautiful west Portal area. Over the years, Norman has gained extensive knowledge in the real estate business. Norman has assisted in all aspects of real estate, including building from spect, purchasing, remodeling, flipping, and other investment-type activities. To read more and to connect with Norman, go to; https://www. thepowerisnow.com/norman-green/
ABOUT THE POWER IS NOW MEDIA
The Power Is Now Media is an online multimedia company founded in 2009 by Eric L. Frazier, MBA, and is headquartered in Riverside, California. We are advocates for homeownership, wealth building, and financial literacy for low to moderate-income and minority communities. The Power Is Now Media corporate office is located at 3739 6th Street Riverside, CA 92501. Ph: 800-401-8994 Website: www.thepowerisnow.com.
Sources
https://www.nerdwallet.com/article/mortgages/how-to-determine-homevalue https://www.cnbc.com/2019/07/01/how-much-a-san-francisco-housebought-10-years-ago-could-be-worth-now.html
