photo credit: Rev Dan Catt

The real estate market in San Francisco is struggling to recover. Although leading economists seem to think that the worst of the area’s real estate problems may be?over, the current market seems to indicate that there are varying degrees of recovery. Within the San Francisco area, some areas have turned the corner, while others are still struggling to recover. Lower interest rates are given as one reason for the current upturn in the real estate market, along with the beneficial effects of both the national and California tax credits. These factors are working together to make housing more affordable and attractive, which is starting to attract buyers now that the country’s overall economic crisis appears to be stabilizing.

Fortunately, real estate foreclosures are becoming less of a dominant influence. Although there is certainly no shortage of foreclosed properties on the market, there are signs that traditional real estate sellers and resellers are starting to re-enter the field. As the market continues to improve, the real estate situation will continue to strengthen for sellers. Mortgage brokers in the area report that business is picking up, with an increase in purchases and traditional real estate sales. In fact, although many feel that it is still basically a buyer’s market in the San Francisco area, the situation is definitely strengthening for sellers as well.

Of course, the recent improvements in the market are still in the early stages. The unemployment rate in the San Francisco area is still high, and the risk of foreclosure remains for many people. Real estate investments made at this time should be viewed as more of a long term investment, since it is unlikely that the quick escalation in home values that occurred in the early 2000s will return anytime soon. Of course, there is still money to be made for talented investors who have the ability to quickly fix up and flip homes. However, most investors are still proceeding carefully and factoring in their own financial situation, when considering the currently favorable interest rates and tax credits.

The real estate market in the San Francisco area is difficult to state in generalized statistics, due to the many micro-markets that seem to exist. However, overall the prices for single family homes, although still below prior levels, are showing an increase in most areas. The sale of single family homes in March of 2010 was up overall when compared to the same time last year and March sales were up over February sales. Loft and condo sales are also up over last year, with March sales up over February. The median price for homes in San Francisco is a little over $600k and has increased a bit during this first quarter. The average number of days that a property stays on the market before it sells has declined, which is also a good sign overall in regards to the area’s real estate market.