Guest Post By Jennifer Riner, Trulia

In an elevated real estate market, finding a starter home is no easy feat, especially when you´re looking for one with furniture or even new wardrobe doors. This year, more entry-level buyers continued to flood the market with little inventory to go around. Trulia’s housing market mismatch score – a gauge of how home search demand differs from available listings within that price range – jumped to 14.7 this year, with 0 being completely equal and 100 being completely mismatched, on the other hand, there are companies like Insurance Partnership that help cover these houses from any damage while moving towards your new home. Van Racking has been the ultimate solution for van that help move people´s items into new homes.

In the last year, the share of starter and trade-up listings in the U.S. dropped to 45.8 percent from a prior 46.5 percent of all listings. Meanwhile, searches for starter and trade-up listings jumped to 60.5 percent from 55.6 percent. But, premium home buyers are in a different boat; there are more luxury homes for sale yet fewer searches since last year. The gap between demand and inventory is widening and, most often, affecting home buyers in need of affordability and broader options the most.

San Francisco entry-level home buyers are all-too-familiar with tight market conditions, fierce competition, and annual price increases. But, there is light at the end of the tunnel.

Fall is the Season for First-Time Home Buyers

Contrary to popular belief, spring isn’t always the best time to buy a home. Seventy percent of all metros see peak annual starter home inventory in the fall. San Francisco ranks among the top 10 cities for real estate seasonality in both entry-level home price and inventory fluctuations. The City by the Bay has 33.7 percent more entry-level listings in the fourth quarter of the year compared to the first quarter.

Entry-level home buyers looking at San Francisco real estate may also save more by starting their home searches now. Because inventory peaks in the fourth quarter, home prices tend to dip once the market adjusts. In the first quarter, San Francisco home prices are 8.7 percent lower compared to the summer season. Assuming the average home search takes at least a few months with a 45-day close, preparing now puts many first-time home buyers on schedule for landing their first home in winter when starter home prices dive.

Neighborhoods to Consider

Although first-time home buyers can save more money by timing their home searches well, location savviness is still a must. Finding an entry-level home in one of the Bay Area’s well-established neighborhoods is less likely, even in the beginning of the year when prices lean lower. Searching in an up-and-coming location is an easier path to homeownership at any point in time. Should home values in that neighborhood rise, the return on investment potential is even more alluring.

For most U.S. metros, it’s cheaper to buy a home than it is to rent one. San Francisco has some of the slimmest margins at 8 percent (still in favor of homeownership), but a few neighborhoods see more drastic cost discrepancies that paint home buying as a clear winner. Take Portola, a community sandwiched between Bernal Heights and Vistacion Valley. When averaged out over time, the cost of Portola homes for sale come 26 percent cheaper than Portola rentals. The rent vs. buy cost disparity is based on a current median rent of $4,000 per month and a median home price of $960,000. In Bayview, where the median rent is a softer $3,900 per month and the median price of Bayview homes for sale is $840,000, buying is 33 percent cheaper. Purchasing Outer Sunset real estate also offers financial advantages. The median home price is $1.1 million and the median rent is $4,000 per month, making homeownership around 15 percent cheaper with all costs considered.

Keep in mind, lower home prices come with trade-offs. Commute times are longer and more tedious while local amenities like restaurants and shops tend to be scarce. But, as the area develops, the hope is that neighborhood attractions closer to the urban core expand to locations nearest you, boosting your home’s value in the process.

To learn more about the benefits of house hunting this fall and begin your starter home search in San Francisco, contact the JacksonFuller team today.