|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