Home sales activity, representing buyer demand, is one of the most basic market trend indicators. We typically compare the same time period because home sales are seasonal, lower in the winter and summer months and higher in the spring and fall. Over the first four months of 2016, the number of homes sold declined by 13% for single family homes and 10% for condominiums versus the same months in 2015. While this does represent lower demand, reviewing other indicators will provide a better understanding of overall market conditions.
The amount of supply available, how long it takes to sell and at what price, will provide a better indication of market dynamics buyers and sellers can expect. On the supply side, the inventory of available homes for sale remains low, but it has increased compared to last year. Single family home inventory was up slightly in April 2016 versus the prior year to 587 homes. Condominium inventory year-over-year was up by 94 units or 15%. In terms of the time required to sell homes placed on the market, the average in 2016 was 35 days, four days longer than in 2015. A selling time under 60 days is considered short and seller favorable, indicating an active market. Finally, the median home price, which represents market conditions motivating a buyer and seller to agree upon a sale price, surpassed or equaled its twelve month high in April 2016.
Median Sales Price
South of Market
Hip urban loft with large private patio, parking & storage
Listed at $899,000
Open house Monday, May 30th: 1pm-4pm
Sweet single family home, 3 beds 1 bath
Listed at $895,000
Open house Tuesday, May 31st: 1pm-2:30pm
1350 Natoma St #7
Newer townhome-style condo. 2 beds 2.5 baths, parking & storage
Listed at $849,000
Showings begin June 11th
|Over the last four years, the San Francisco real estate market can easily be referred to as frenzied. The result has been a huge surge in home prices. Recent data though seems to indicate that the trend may be shifting.
Prices over the last three years appreciated by a whopping 35.02%, but looking at a year-over-year analysis, we can see that the vast majority of the gain, almost 31%, happened between 2013 and 2015. Over the last twelve months, the rate of appreciation has slowed to just 3.80%.
|Condos & Single Family Homes Median Sale Price
|2013 – 2016 / Year Over Year
|It’s also interesting to note that most of 2013 – 2015 saw a steady smooth upward price trend but the last twelve months was filled with multiple peaks and valleys.
The underlying market dynamics haven’t really changed. Demand is high, inventory remains low, interest rates are stable, and financing is no easier or harder to secure then it was a year ago. Of course many other factors impact the housing market (local employment opportunities, the stock market, politics, consumer confidence, etc). They are each likely impacting the current market adjustment to some degree.
We have all expected that the pace of appreciation of San Francisco real estate would start to cool down a bit. While we may have reached that point, I definitely do not view this as the bursting of a bubble.
If you’ve been thinking of selling or buying a home, give me a call and we can chat about how this market shift could impact your real estate goals.
Broker Associate, CRS, GRI
“How’s the market?” This is one of the most frequent questions that I get from clients and friends. As things cool down for the winter season, I thought it may be time to help shed some light on it. We’ve put together a few graphs to show you exactly what’s happening in the market right now. I have much more data to share, so feel free to let me know if you have questions about your specific property or neighborhood.
Every day without fail, someone asks me how the market is doing. I love this because it tells me that people are interested in our city and engaged with real estate. Everyone is curious about prices and trends and what the future may hold for the local real estate market in SF. I thought it may be helpful to prepare a city-wide 5 year trend of median prices of single family homes, condos, and TICs. So here it is! I have tons more data to share on a neighborhood level too, so just let me know if you have questions about your specific area of SF. Enjoy!