Of course, home prices in San Francisco are high, it’s a seller’s market with fierce competition among buyers, and single-family homes are in higher demand than condos. Bla-bla-bla.
If you feel like you’ve read all of this before, imagine how I feel. I to know I have already written everything. And yet, each month, I try to shed some light on some aspect of the San Francisco residential real estate market that you may not be familiar with.
First, the contrary view, expressed in a mid-April report by SocketSite.com. “Having hit an 11-year seasonal high last week, the net number of homes on the market in San Francisco has since risen another 8%, driven by a continued slowdown in the pace of sales as well as an increase in activity. registration and price.
“In fact, there are now 70% more homes on the market than there were at this time of year before the pandemic; more than twice as much as at the beginning of April 2015; and the most, on a seasonal basis, since 2011.”
Sounds promising for buyers, doesn’t it! But don’t get too excited, here’s the counterpoint. According to Redfin, from January 1 to February 15, 40% of homes sold in San Francisco cost at least $100,000 more than asked. Homes are believed to be selling at record prices right now and are only going up in value.
In an April market report, the folks at Compass explain that while it’s true that San Francisco is the only Bay Area county with higher active listings than before the pandemic, it’s because of an increase in condominium listings: Inventory of active singles and family home listings continue to decline.
The report said, “Sales were robust in the first quarter for all property types, but the supply of home listings in particular was very low.”
Meanwhile, mortgage interest rates have skyrocketed 50% in 2022, as of March 31, with the biggest jump occurring in March. Still, San Francisco’s real estate market appears largely unfazed by rising interest rates, financial market volatility and troubling international events.
“The prevailing dynamic remains one of strong demand from buyers competing for insufficient inventory of listings for sale,” according to the Compass report. “Crowded open houses, multiple offers, fierce one-upmanship and rapid sales remain commonplace.”
Some buyers have been hurt by rising lending rates and falling equity portfolios, and some have postponed buying plans, but according to Compass, “not enough to move the needle on fundamentally high market conditions.” demand/low supply that dominated 2021.”
AND CARRY ON
Is there a silver lining for shoppers there? Taylor Marr, deputy chief economist at Redfin, thinks there might be. He sees early indications that the housing market may be cooling in some expensive coastal areas, including San Francisco.
It’s not much, but here’s what it has:
For starters, the number of Google searches for “homes for sale” dropped significantly during the second week of March for these three markets: Boston (-15%), San Francisco (-14%) and Los Angeles (-13%). %). ).
Next, visits to homes for sale in California fell 21% through March 31 from the first week of 2022. That’s a major turnaround from the same time last year, when touring activity in California increased by more than 76%.
Third, the number of home buyers in San Francisco who applied for mortgages fell 13% year-over-year in February.
And finally, Marr adds, “For this time of year, the share of homes with price cuts has grown at its fastest rate in at least seven years. Although price declines are still rare, the fact that they are rapidly becoming more common tells us that sellers are reaching a limit on their ultimate control over the market as buyers are reaching a limit on how much they are willing to pay for a house.
Again, these are early indicators. For buyers, sellers and real estate agents, the market still seems very hot and it may take a few months for the competition to die down. I told you it wasn’t really a silver lining – but like rain for Californians, shoppers will take what they can get.
A final note: The San Francisco Chronicle recently completed a study that identifies 10 real estate markets on the cusp of a San Francisco-style affordability crisis — where home prices have nearly doubled in a decade and not enough new homes are being built to answer the question.
Towns are mostly smaller and largely rural. Three are in Washington State, two in Montana, two in Utah, one in North Carolina and two in California – San Diego and Merced.
I don’t know about you, but I’m staying put.
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