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San Francisco Real Estate – Complicated Market Conditions August 2020

As illustrated below, the San Francisco market currently reflects a variety of both positive and negative indicators. Among Bay Area markets, the city is seeing the softest recovery from the initial shelter-in-place plunge in activity in early spring, while some other counties – less expensive, more suburban or rural – are experiencing extremely high demand. (See table near the end of this report.)

Within San Francisco itself, supply and demand conditions have diverged dramatically between house and condo markets, with the latter being far weaker and rapidly climbing into “buyer’s market” territory.

Median Home Sales Prices

On a 3-month rolling basis, SF median house sales prices are as high as they’ve ever been. The median condo sales price, while not particularly low, has been running lower than the highs of last year.

Supply & Demand Indicators

The number of listings going into contract has been increasing, but at a much lower rate than inventory is growing (chart 1). Sales volume is climbing, but is still far below the high points of recent years (chart 2). Price reductions have been soaring in recent months (chart 3).

Diverging House and Condo Market Conditions

The next 5 charts illustrate the increasingly stark divide in the levels of inventory and buyer demand between these 2 major market segments. However, it should be noted that within the condo market, certain segments and locations are performing better than others. The largest condo market in San Francisco – the greater South Beach, SoMa, Mission Bay, Civic Center area, dominated by large complexes and high-rise buildings, including continuing new construction projects – is seeing the weakest conditions.

As illustrated in the following 2 graphs, the supply of listings on the market is at its highest point in 8 years, with the inventory of condos spiking way, way up. As a market softens, correct pricing becomes increasingly critical for sellers. In a hot market, buyers compete for listings; in a cooler market, sellers compete for buyers.

Though climbing in recent months, the days-on-market figures are not high. It appears those listings selling are going into contract relatively quickly.

The amount and magnitude of buyers overbidding asking prices is considerably diminished from levels seen in the past 6 years. Part of this is due to the change in showing conditions brought about by strict shelter-in-place rules. But in an environment of increased inventory, buyers see a reduced necessity to compete with each other.

Luxury Homes Going into Contract

Comparative Conditions around the Bay Area

This table ranks each county by the percentage of active listings going into contract in June/July 2020 – a standard statistic of market heat – compares it to the same period of last year, and then rates the year-over-year change. Many counties are seeing hugely increased demand over last year. The SF house market is about the same as last year, and the SF condo market is substantially cooler.

San Francisco Era of Construction

This chart looks at the number of house sales over 2 years in different periods of construction. SF is a city of older houses with relatively little new house construction in the past 30 -40 years.

The condo market had similar divisions up until about 1980, when new condo construction blasted off to add tens of thousands of new units to the market, sometimes creating huge new residential neighborhoods.

The post San Francisco Real Estate – Complicated Market Conditions August 2020 first appeared on Paragon Specific.

San Francisco Market Rebounds – July 2020 Report

Despite the ongoing health and economic crisis precipitated by COVID-19, the SF real estate market made a large recovery from the steep declines in March and April. The SF median house price hit a new monthly high in June ($1,800,000), and high-end houses, in particular, have seen very strong demand – this applies to virtually every market in the Bay Area. More affluent buyers – the demographic least affected by COVID-19, unemployment, and also having the greatest financial resources – have been jumping back into the market to a greater degree than other segments.

The condo market has been weaker than the house market, as measured by both supply and demand metrics and median sales price. It may be that prospective condo buyers – often younger and less affluent than house owners – have been more affected by the huge jump in unemployment.

The first chart below illustrates the big rebound in buyer demand, as the number of listings accepting offers in June 2020 rose slightly higher on a year-over-year basis. Of course, closed-sales volume – a lagging indicator – was hammered in Q2 by shelter in place.

High-end sales staged a particularly strong recovery, reaching a new high as a percentage of total sales. This is one of the factors behind median house sales prices hitting a new peak in June.

As illustrated below, the house market (blue line) has performed much better than the condo market (purple line).

Three angles on median home sales price movements – annual, monthly and quarterly. While the median house price has hit a new peak, the median condo price has declined from its 2019 high.

Average days on market remained relatively low in Q2, though higher than Q2 in 2018 and 2019.

The average overbidding percentage declined to zero in Q2 as showing procedures and the offer-making process have been severely affected by shelter in place.

The Bay Area markets with the largest year-over-year increases in the number of listings accepting offers in June 2020 were the 4 outer Bay Area counties of Monterey (up 61%), Santa Cruz (58%), Sonoma (47%) and Napa (37%). They also have among the lowest population densities in the Bay Area. The more urban counties saw more modest y-o-y increases: San Francisco (6%) and Alameda (7%). Other factors may play a role in this: length/strictness of shelter-in-place rules, home price differences, second-home buying patterns, and so on.

The post San Francisco Market Rebounds – July 2020 Report first appeared on Paragon Specific.

San Francisco Market Rebounds – July 2020 Report

Despite the ongoing health and economic crisis precipitated by COVID-19, the SF real estate market made a large recovery from the steep declines in March and April. The SF median house price hit a new monthly high in June ($1,800,000), and high-end houses, in particular, have seen very strong demand – this applies to virtually every market in the Bay Area. More affluent buyers – the demographic least affected by COVID-19, unemployment, and also having the greatest financial resources – have been jumping back into the market to a greater degree than other segments.

The condo market has been weaker than the house market, as measured by both supply and demand metrics and median sales price. It may be that prospective condo buyers – often younger and less affluent than house owners – have been more affected by the huge jump in unemployment.

The first chart below illustrates the big rebound in buyer demand, as the number of listings accepting offers in June 2020 rose slightly higher on a year-over-year basis. Of course, closed-sales volume – a lagging indicator – was hammered in Q2 by shelter in place.

High-end sales staged a particularly strong recovery, reaching a new high as a percentage of total sales. This is one of the factors behind median house sales prices hitting a new peak in June.

As illustrated below, the house market (blue line) has performed much better than the condo market (purple line).

Three angles on median home sales price movements – annual, monthly and quarterly. While the median house price has hit a new peak, the median condo price has declined from its 2019 high.

Average days on market remained relatively low in Q2, though higher than Q2 in 2018 and 2019.

The average overbidding percentage declined to zero in Q2 as showing procedures and the offer-making process have been severely affected by shelter in place.

The Bay Area markets with the largest year-over-year increases in the number of listings accepting offers in June 2020 were the 4 outer Bay Area counties of Monterey (up 61%), Santa Cruz (58%), Sonoma (47%) and Napa (37%). They also have among the lowest population densities in the Bay Area. The more urban counties saw more modest y-o-y increases: San Francisco (6%) and Alameda (7%). Other factors may play a role in this: length/strictness of shelter-in-place rules, home price differences, second-home buying patterns, and so on.

Weekend: Jun 27 – Jun 28, 2020

This weekend offers plenty of fun things to do for free and on the cheap. From the Lake Merritt Clean Up and Contest, to the Virtual Global Pride Celebration to Juneteenth Family Day Festival Carshow Parade. The events below will help you fill your calendar with fun!

View even more events here.

Weekend: Jun 20 – Jun 21, 2020

This weekend has lots of great things to do for free and on the cheap. From the Classical Revolution: 8-Hour Livestream Music Festival, to the National Arts Drive: Interactive Fundraiser & Community Experience to Spontaneous Storytelling Online. The events below will help you fill your calendar with fun!

 

View even more events here.

San Francisco Real Estate Spring 2020 Report

Supply & demand statistics, median sales price trends, sales and values by city district, the luxury home market, and the ongoing effects of COVID-19

June 2020

Generally speaking, market activity – as measured by the number of listings going into contract – continued to pick up rapidly in May, bouncing back from the steep plunge following the first shelter in place orders. However, activity in May, which is typically among the busiest selling months of the year, still remained well below May 2019. Still, with the easing of shelter in place, as well as the market learning to adjust to new circumstances, it is expected the recovery will continue to surge closer to normal.

Interest rates hit yet another historic low at the end of May.

Median sales prices for both houses and condos dropped significantly in San Francisco in May, but those figures are based on a very low volume of closed sales in the month. An even bigger drop in higher-price home sales also put downward pressure on median prices. May sales and sales prices mostly reflect the huge impact of COVID-19 on the SF market in late March and April. Based on the large jump in accepted-offer activity in May (and especially for more expensive homes), coming months will constitute a better indicator of whether changes in fair market value are occurring.

Anecdotally, word on the street is that buyer demand has come surging back and home prices have so far been little affected, though opinions vary regarding different market segments. We’ll know more soon.

The SF market – as also common in other urban centers – was more deeply and more quickly affected by COVID-19 and shelter-in-place than other more suburban county markets, seeing larger initial drops in activity. Even with the remarkable rebound of buyer demand in May, its recovery is, so far, lagging other counties on a year-over-year basis, especially more suburban and rural counties, such as Marin and Sonoma. A variety of factors may be at play, which are discussed on a chart within this report, however definitive pronouncements regarding longer-term market, economic and demographic effects are impossible to make while the crisis is still at hand.

Rent rates appear to be dropping quickly, subsequent to the enormous increase in unemployment – which typically impacts the rental market more rapidly and significantly than the for-sale market.

NOTE: Any statistics derived from closed sales – such as median sales prices, sales volume and days on market – reflect the state of the market 3-6 weeks ago when the offers were negotiated and accepted – and when the market was most terribly impacted by the crisis.

 

The post San Francisco Real Estate Spring 2020 Report first appeared on Paragon Specific.

San Francisco Real Estate Spring 2020 Report

Supply & demand statistics, median sales price trends, sales and values by city district, the luxury home market, and the ongoing effects of COVID-19

June 2020

Generally speaking, market activity – as measured by the number of listings going into contract – continued to pick up rapidly in May, bouncing back from the steep plunge following the first shelter in place orders. However, activity in May, which is typically among the busiest selling months of the year, still remained well below May 2019. Still, with the easing of shelter in place, as well as the market learning to adjust to new circumstances, it is expected the recovery will continue to surge closer to normal.

Interest rates hit yet another historic low at the end of May.

Median sales prices for both houses and condos dropped significantly in San Francisco in May, but those figures are based on a very low volume of closed sales in the month. An even bigger drop in higher-price home sales also put downward pressure on median prices. May sales and sales prices mostly reflect the huge impact of COVID-19 on the SF market in late March and April. Based on the large jump in accepted-offer activity in May (and especially for more expensive homes), coming months will constitute a better indicator of whether changes in fair market value are occurring.

Anecdotally, word on the street is that buyer demand has come surging back and home prices have so far been little affected, though opinions vary regarding different market segments. We’ll know more soon.

The SF market – as also common in other urban centers – was more deeply and more quickly affected by COVID-19 and shelter-in-place than other more suburban county markets, seeing larger initial drops in activity. Even with the remarkable rebound of buyer demand in May, its recovery is, so far, lagging other counties on a year-over-year basis, especially more suburban and rural counties, such as Marin and Sonoma. A variety of factors may be at play, which are discussed on a chart within this report, however definitive pronouncements regarding longer-term market, economic and demographic effects are impossible to make while the crisis is still at hand.

Rent rates appear to be dropping quickly, subsequent to the enormous increase in unemployment – which typically impacts the rental market more rapidly and significantly than the for-sale market.

NOTE: Any statistics derived from closed sales – such as median sales prices, sales volume and days on market – reflect the state of the market 3-6 weeks ago when the offers were negotiated and accepted – and when the market was most terribly impacted by the crisis.

 

San Francisco Real Estate Market Begins to Bounce Back – Slowly

May 2020 Crisis Update. Market activity begins to tick up after severe shelter-in-place plunge. Median home sales prices are up. Interest rates hit new low.

Shelter-in-place caused steep drops in activity across the board in what is typically the busiest selling season of the year. However, though still far below normal levels, activity has been picking up since bottoming out in late March/early April, and will presumably continue to do so with the easing of both shelter-in-place and property-showing rules.

So far, home prices have increased, but a fair proportion of the sales behind April median sales prices still reflects offers accepted prior to shelter in place.

Interest rates hit a new historic low in the last week of April.

Week by Week Supply & Demand Trends

The only way to clearly perceive the recent changes in the market – sudden plunge and the beginning of recovery – is by looking at WEEKLY trends in buyer and seller activity. These are illustrated in this first chart below.

Year-over-Year Changes in Median Home Sales Prices

Generally speaking, the first months of 2020 have been characterized by year-over-year increases – often considerable – in median home sales prices across the Bay Area.

Longer-Term Trends in Median Home Prices
– 12-Month Rolling Illustration

Year-over-Year Monthly Activity Comparisons

The next series of charts reflects the dramatic changes in market dynamics by MONTH as compared to spring 2019. These don’t illustrate the uptick in activity in the most recent weeks.

Year-over-Year Changes in Luxury Home Markets

Mortgage Interest Rates

At the end of April mortgage interest rates hit a new historic low.

Unemployment

We are not going to review the economic news already extensively covered in the media, except for this stark illustration of the unparalleled rise in unemployment. How quickly this horrifying trend can be reversed will probably be the single largest factor behind an economic recovery.

San Francisco Real Estate Market Begins to Bounce Back – Slowly

May 2020 Crisis Update. Market activity begins to tick up after severe shelter-in-place plunge. Median home sales prices are up. Interest rates hit new low.

Shelter-in-place caused steep drops in activity across the board in what is typically the busiest selling season of the year. However, though still far below normal levels, activity has been picking up since bottoming out in late March/early April, and will presumably continue to do so with the easing of both shelter-in-place and property-showing rules.

So far, home prices have increased, but a fair proportion of the sales behind April median sales prices still reflects offers accepted prior to shelter in place.

Interest rates hit a new historic low in the last week of April.

Week by Week Supply & Demand Trends

The only way to clearly perceive the recent changes in the market – sudden plunge and the beginning of recovery – is by looking at WEEKLY trends in buyer and seller activity. These are illustrated in this first chart below.

Year-over-Year Changes in Median Home Sales Prices

Generally speaking, the first months of 2020 have been characterized by year-over-year increases – often considerable – in median home sales prices across the Bay Area.

Longer-Term Trends in Median Home Prices
– 12-Month Rolling Illustration

Year-over-Year Monthly Activity Comparisons

The next series of charts reflects the dramatic changes in market dynamics by MONTH as compared to spring 2019. These don’t illustrate the uptick in activity in the most recent weeks.

Year-over-Year Changes in Luxury Home Markets

Mortgage Interest Rates

At the end of April mortgage interest rates hit a new historic low.

Unemployment

We are not going to review the economic news already extensively covered in the media, except for this stark illustration of the unparalleled rise in unemployment. How quickly this horrifying trend can be reversed will probably be the single largest factor behind an economic recovery.

The post San Francisco Real Estate Market Begins to Bounce Back – Slowly first appeared on Paragon Specific.