Category archive - Blog

Weekend: Mar 23 – Mar 24, 2019

This weekend has lots of great things to do for free and on the cheap. Check Out SF’s Brand New Rain Garden in McLaren Park or the Holi Festival: The Biggest Color Party in The Bay Area in Fremont. The events below will help you fill your calendar with fun!

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The San Francisco Real Estate Spring Market Begins

Spring 2018 was one of the hottest markets in SF and the Bay Area in the last 2 decades. Then the market began to cool in summer and autumn – demand, sales and appreciation rates generally dropping, while supply and price reductions increased – before the mid-winter doldrums took hold. The magnitude of these changes varied by county, with SF less affected than many others, but still certainly affected.

Since the recovery began in 2012, spring has typically been the most active season of the year, and usually the period during which appreciation gains have been the largest. The spring 2019 market is just getting started amid a diverse set of economic indicators. Financial markets have, so far, recovered in 2019, interest rates have dropped, and big local IPOs loom. We will know much more soon.

Long-Term, Annual Median Price Trends

Short-Term Median Price Trends
3-Month Rolling Figures

Looking at 3-month rolling median sales prices, the SF median house price was virtually unchanged on a year-over-year basis, while the median condo price (second chart below) ticked up a little – but the critical issue is what will happen in the spring months, when sales volumes are much higher.

Median Sales Price Appreciation
1998 – 2018, by District

Markets appreciate due to a wide variety of local and macro-economic reasons: economic cycles, industry booms, inflation, consumer confidence, interest rates, employment, gentrification, new construction, comparative affordability (to other nearby markets), population growth, buyers’ median age, commuting, fashion, and so forth. The combination of factors affecting any particular neighborhood or district in the city is often specific to that market.

In SF and around the Bay Area, more expensive homes have generally appreciated less than more affordable homes, especially over the last 3-4 years. On the other hand, during the last downturn after 2008, the prices of more expensive homes usually declined significantly less. These appreciation percentages should be considered very approximate.

House Median Sales Price Changes
1998 – 2018

Condo Median Price Changes
1998 – 2018

What’s for Sale in San Francisco
as of March 1, 2019

Active Listings by Price Segment
March 1, 2019

The number of active listings fluctuates daily, and the numbers below are increasing as more new listings come on market. These next 3 charts are snapshots of active listings on March 1st.

Houses for Sale by District
with Median LIST Prices. 3/1/19

The supply of listings available to purchase varies widely between city districts, which can be a simple reflection of market size and/or an indicator of supply and demand dynamics. If median LIST prices (below) are well above 2018 median SALES prices (delineated earlier in this report), it is typically a sign that the balance in listings for sale is disproportionately weighted towards higher priced properties, where demand is softer – and/or a sign of overpricing beyond what buyers consider fair market value.

Condos for Sale by District
with Median LIST Prices, 3/1/19

Market Seasonality
New Listings Coming on Market

New inventory usually starts pouring into the market right now, in early spring, to fuel the biggest selling season of the year.

Active Listings on Market

Sales Volume by Month – General Market

The number of sales in the first 2 months of 2019 was down from the same period of 2018, but these are the 2 lowest sales-volume months of the year. A much more significant indicator will be what occurs over the next 4 months during the classic spring selling season. Sales are a somewhat lagging indicator, as they mostly reflect new listings and accepted-offer activity in the previous month or two.

Luxury Home Sales by Month

Market Statistics by City District

In SF and around the Bay Area, higher-priced areas have generally had somewhat cooler markets than more affordable markets in recent years, which is reflected in the next 4 charts. But home price is certainly not the only factor at play in these different neighborhoods.

Sales Price to Original List Price %

Any percentage over 100% reflects overbidding of asking price. Though these percentages have declined somewhat in the past 6 months, they are still incredibly high compared to most other places in the Bay Area and the U.S..

Unlike the house market, various city districts have seen high volumes of newly constructed condos in the last 3 to 4 years, and the increased supply has affected the condo markets in those areas.

Average Days on Market by District

Comparing Bay Area Markets
Homes for Sale under $1 Million
as of March 1, 2019

Bay Area Luxury Homes for Sale
as of March 1, 2019

Bay Area Median Sales Prices, Q4 2018

On a quarterly basis, the highest median house sales price in the Bay Area has been alternating between San Francisco and San Mateo Counties.

County to County Migration

People move to SF and the Bay Area from all over the country and the world, and people leave to move to a vast number of locations, for differing reasons. This analysis looks at those counties with the greatest number of people moving to and from SF. In many cases, there is a large exchange between 2 counties, with residents going in both directions. Often, but not always, the outward flow is greater to counties with more affordable home prices, but there are many factors – such as schools, employment and quality of life issues – at play. (Cook County is where Chicago is located.)

Demographics Snapshot
Educational Attainment
San Francisco vs. U.S.

San Francisco, as well as the greater metro area, is very highly educated against national norms.

Education & Income
Disparity between the Sexes

An indicator of the income-generating value of education, along with an unhappy indicator of where progress remains to be made in income equality. (As an aside, real estate is certainly one of the first professions that saw income equality established between the sexes: Women have been holding their own and sometimes dominating rankings of top Bay Area agents for many decades.)

The statistics in this report are very general and approximate indicators based upon listing and sales data pertaining to assortments, of varying size, of relatively unique homes across a broad spectrum of locations and qualities. How these statistics apply to the current value, appreciation trend, and prevailing market conditions of any particular property is unknown without a specific comparative market analysis.

Weekend: Mar 9 – Mar 10, 2019

This weekend has plenty of amazing things to do for free and on the cheap. From the Annual International Women’s Day Festival in Oakland to Tech Week’s Mini Maker Faire in Berkeley. The events below will help you fill your calendar with fun!

View even more events here.

Weekend: Mar 2 – Mar 3, 2019

This weekend provides many fun things to do for free and on the cheap. From the Magnolia Plant Sale at the SF Botanical Garden, to the Spring Craft Market in Novato to Millbrae Lunar New Year Festival. The events below will help you fill your calendar with fun!

View even more events here.

Weekend: Feb 23 – Feb 24, 2019

This weekend has tons of exciting things to do for free and on the cheap. From the Chinese New Year Street Fair in the city, to TreasureFest: Outdoor “Mardi Gras” Festival to East Bay Resiliency Fair & Repair Cafe in Berkeley. The events below will help you fill your calendar with fun!

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Weekend: Feb 16 – Feb 17, 2019

This weekend offers many wonderful things to do for free and on the cheap. From Lunar New Year Community Day & Lion Dance at the San Jose Museum of Art, to the Peak of SF’s Gorgeous Annual Magnolia Bloom at the SF Botanical Garden to Lunar New Year Celebration: Martial Arts & Lion Dance Show in Berkeley. The events below will help you fill your calendar with fun!

View even more events here.

San Francisco Real Estate Heading into the 2019 Market

As of early February, the government shutdown is over – at least for a little while – the stock market has recovered dramatically from its late 2018 plunge, and interest rates are well down from November highs. A good number of large, local, high-tech “unicorns” continue to plan IPOs in 2019. All these are positive economic indicators for the Bay Area real estate market – but indicators have proven to be quite volatile over the past 5 months and future movements are not to be taken for granted.

As detailed in our last report, there was considerable cooling in the market in the second half of 2018. The month of January typically has the fewest sales of the year, sales which mostly reflect activity during the December market doldrums: We don’t consider its data to be a reliable indicator of conditions or trends. But activity is picking up, and the beginning of the spring sales season – which in the Bay Area can start as early as February – will soon provide more direction as to where the market is heading.

San Francisco Home Value Trends
Median House Sales Prices by Month
since 1990

Median sales prices often fluctuate by month and by season. It is not unusual for them to spike to new peaks during the spring selling season, and then decline and/or plateau afterward (until the next spring). So, the question is: What’s going to happen in spring 2019?

Median Condo Sales Prices by Month
since 2005

Median condo sales prices, especially on a monthly basis, can be confused by new-project condo sales reported to MLS, which sometimes occur in quantity in a single month. Monthly fluctuations are common, and it is always the longer term trend that is most meaningful.

Home Sales Breakdowns

Since the market recovery began in 2012, home sales at prices under $1 million have dropped by 68%. This chart shows the migration of sales to higher price segments.

Condos sales in San Francisco significantly outnumber house sales, and this trend will continue with the ongoing construction of new-condo projects. The most common property type for sales in the city was the 2-bedroom condo at a 2018 median sales price of $1,375,000. The dominant house sale was of 3 bedrooms at a median sales price of $1,560,000.

Compared to more suburban Bay Area counties, San Francisco is a city of relatively small, older homes occupied by relatively small households: Almost half of SF housing was built before WWII, 61% of homes are of less than 1500 square feet, and, per census data, 38% of SF households consist of a single person. SF also has the lowest percentage – 4.5% – of children under the age of 5 of any major city in the country.

San Francisco Luxury Home Sales

While luxury home sales from $3 million to $4.99 million have steadily increased since 2012, home sales of $5 million and above have, to a large degree, plateaued in recent years. [Sales reported to MLS]

Luxury House Sales by District

Luxury Condo, Co-op & TIC Sales by District

San Francisco Long-Term Rent Trends

Generally speaking, there should be a relatively close correlation between home prices and rents: They constitute the 2 main options for paying for one’s housing. It is not an apples-to-apples comparison, because there are other issues at play, such as building equity, the ability to remodel and improve, certain tax advantages (though greatly diminished under new tax laws) and so on. If home prices continue to appreciate while rents plateau or decline, it can be a warning sign of an imbalance in the market – if it extends beyond the short term.

Did Someone Say Multi-Cultural?
Bay Area Demographic Snapshots

Before looking at the charts below, here is today’s demographics quiz question: What 4 nationalities account for the origin of the highest numbers of Bay Area residents?

Neighborhood Appreciation Trends – Selected Districts

There are 70-odd SF neighborhoods in 10 Realtor districts, so we can’t cover all of them here – but if you would like information on one not included, please let us know. We track prices and trends in all of them.

Realtor District 7 is the most expensive house district in SF – consisting of Pacific & Presidio Heights, Cow Hollow & Marina – but we didn’t include it on the first chart, because its median house sales price is so much higher – over $4.7 million in 2018 – that the trend lines of the other districts would be flattened.

Median House Sales Price Trends

Average House Dollar per Square Foot Trends

Median 2-Bedroom Condo Sale Price Trends

Stock Prices & Interest Rates

As seen in the first chart below, the changes in the S&P 500 Index have been dramatic since the 2016 election, seeing an enormous jump to its most recent peak in September 2018 before entering a period of substantial volatility. Ups and downs and major volatility in financial markets – and their effects on household wealth – can play a large role in local real estate markets, especially in the higher price segments.

As illustrated in this next chart, the movements in the S&P 500 have been distinctly modest compared to the stock price changes of some of our local high-tech giants. It has been has been a wild, queasy ride for investors and stock-owning employees – and for many home buyers.

If the big unicorn IPOs go forward as expected, and the market greets them enthusiastically, that could play a substantial role in demand as thousands of employees suddenly feel considerably more affluent.

Interest rates appeared to be headed relentlessly higher, but instead dropped sharply since the latest November 2018 high point. Substantial declines in interest rates can spark renewed buyer motivation to purchase.

Market Indicators by Property Type & Price Segment

The next 4 charts divide first the house market and then the condo, co-op and TIC market by price segment, for trends in average days on market and months supply of inventory. For both of those indicators, lower readings signify stronger demand as compared to the supply of listings available to purchase. Generally speaking, demand has been stronger for houses than condos, and for lower price segments than for higher. The ultra-luxury condo and co-op market in particular – prices of $3m+ – is seeing high readings in these statistics. Certainly part of the issue is the new luxury condo projects coming on market and swelling supply.

House Market Stats by Price Segment

Condo, Co-op & TIC Market Stats by Price Segment

The ultra-luxury segment here – priced $3 million and above – is seeing distinctly higher months supply of inventory and days on market readings, reflecting appreciably softer supply and demand dynamics.

Weekend: Feb 9 – Feb 10, 2019

This weekend has lots of great things to do for free and on the cheap. From the SF Bay Flyway Festival & Wildlife Expo in Vallejo, to the KNBR Giants FanFest 2019 at Oracle Park to Tulipmania 2019 at Pier 39. The events below will help you fill your calendar with fun!

View even more events here.

Weekend: Feb 2 – Feb 3, 2019

This weekend offers many wonderful things to do for free and on the cheap. From the Chinese New Year Flower Fair in Chinatown, to the Lunar New Year Festival to the Sick Plant Clinic at the UC Berkeley Botanical Garden. The events below will help you fill your calendar with fun!

View even more events here.