Why Now May Be the Right Time to Buy in San Francisco


Location is the most important thing in real estate, but timing is absolutely key as well.  There are two factors in play right now that may make it the right time to consider buying in San Francisco. First of all, fall is one of the biggest selling seasons in the city. Coming out of the relatively slow summer, inventory kicks into high gear in September, making it typically the single biggest month for new listings. This year seems to be no exception. In the first week alone, 300 new listings came on the market. The increase in inventory may alleviate some of the pressure on demand, possibly making the market more accessible.

The second has to do with interest rates. Currently, they are still at historic low levels. However, the government is on course to end the quantitative easing (QE). Quantitative easing is a multi-billion dollar bond buying program that has been going on since 2008.  Those are some mighty big words, but what it really means is that the government has been trying to keep interest rates low and spur growth in the economy. Though many people disagree with the policy, the current QE should be ending in October.  Consequently, interest rates might start to go up.  Higher interest rates translate into less buying power.

For example, at today's interest rate of 4.325%, with 20% down payment on a $1 million home, your monthly principal, interest payment,  tax and insurance (PITI) payment would be around $5,252. If interest rates go up by 1%, your payments would go up roughly $485 a month. Purchasing a home now, with a long fixed interest rate, is certainly smart investment.