SF Bay Area housing market show strange rebound

Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes

The rebound came suddenly amid still very high interest rate environment. Sold price above list price over 200k is normal again.

I am considering putting a house in South San Francisco onto market recently. Bought in 2020 for 1.02 m. A few weeks ago, I was estimating around 1.5-1.6m. Now, it looks like 1.7-1.9 m. This house is under some renovation with an ADU addition, after 4 years of rental. Debating whether to keep it as a rental or just unload.

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Wilson Lau
Real Estate Agent · San Jose, CA · Member since 2023 · 182 posts · 104 votes
2y
Competition is definitely high on the buy side, and I see more and more buyers coming in as we approach the summer season. What's your plan with the proceed? Are you planning to do a 1031 exchange or a trust deed to avoid/ minimize the property gain tax?
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Jake AndronicoBusiness Member
Realtor · Reno, NV · Member since 2019 · 1k+ posts · 938 votes
2y
@David Song
What a great position to be in! Congrats!!
Depends on so many factors:
- What it yields
- What you're trying to achieve
- What headache factors you're willing or not willing to have
- What tax implications come from selling (and if you have to replace your debt in a 1031 exchange)

With 1.7-1.9mil that would be a 6-10 unit out here in Reno, NV that with cash could produce probably a 6-7 cap with upsides in rents.
SF is obviously a super strong appreciation market and it will likely continue that way and bounce back (in my opinion).
Best of luck to you no matter what you decide!
415-233-1796
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David Song
OP
Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
2y
I am considering either sell or rent. If sale price is over 1.6, likely t sell. If below 1.5, will likely to keep renting out with main house and ADU separately, around 7 k/mo.

If I sell it, will likely just pay the long term capital gain tax.

Quote from @Wilson Lau:

Competition is definitely high on the buy side, and I see more and more buyers coming in as we approach the summer season. What's your plan with the proceed? Are you planning to do a 1031 exchange or a trust deed to avoid/ minimize the property gain tax?

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David Song
OP
Real Estate Broker · Redwood City, CA · Member since 2014 · 679 posts · 888 votes
2y
Reno is an interesting market, not far from Lake Tahoe.

what kind of property can get around 6-7 cap in Reno?

Quote from @Jake Andronico:

@David Song
What a great position to be in! Congrats!!
Depends on so many factors:
- What it yields
- What you're trying to achieve
- What headache factors you're willing or not willing to have
- What tax implications come from selling (and if you have to replace your debt in a 1031 exchange)

With 1.7-1.9mil that would be a 6-10 unit out here in Reno, NV that with cash could produce probably a 6-7 cap with upsides in rents.
SF is obviously a super strong appreciation market and it will likely continue that way and bounce back (in my opinion).
Best of luck to you no matter what you decide!

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