Northside SF
Real Estate Update
Low prices, interest rates make for good values

This marks the debut of my real estate column. As you will see, it comes at a fairly opportune time. I can actually impart some good news, and in my business, it’s been a while since anyone has really been in a position to do that.

Buying and selling anything is largely driven by consumer confidence. It wasn’t only home sales that slowed down for the last couple of years but also luxury cars and goods. People weren’t confident enough to make major purchases. Lately we have been getting some good economic news – unemployment claims are down, job creation is up, the stock market is up, and corporate earnings are up. This adds to the psychological comfort of the buyer. Mindsets are changing.

At the same time, banks are saying that interest rates will rise during 2011. Mortgage rates are still near historic lows, but the general consensus is we should expect them to move up .75 percent to 1.25 percent. It remains to be seen if this will be in three, six, nine, or more months.

Why does all this matter? It affects housing affordability. As rates rise, a buyer will pay more for the same house, even at the same price because of the higher rates. Loan payments rise as rates rise, as does the amount of income needed to qualify for loans. Higher rates will knock some buyers out of the market because a home purchase will simply become unaffordable for them. Right now the consumer affordability ratio is the best it’s been in decades. That’s a signal to buy.

San Francisco values are starting to rebound. January and February 2011 saw brisk home sales, many with multiple offers. I was just in a multi-offer situation for buyers with 11 offers total. Fortunately we prevailed, but it was a 1 in 11 chance.

It all comes down to this: if you’re thinking about buying, now is the time. You can take advantage of still-low prices, low interest rates, and a great affordability factor. Sellers, now is a good time to put your home on the market. Inventory is low (one of the reasons we are seeing multiple offers), so why wait until there is more competition?

I am delighted to be writing this column for Northside San Francisco, and look forward to hearing from you about any real estate topics you would like to see covered in the future.

Stephanie Saunders Ahlberg has been a real estate agent for over 30 years and joined Hill & Co. in 1983, where she has consistently been among the top 10 salespeople. She can be reached at

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