After a brief rebound in market activity in August, pursuant to what turned out to be a very temporary decline in interest rates and an associated rebound in financial markets, macroeconomic conditions shifted again – with interest rates climbing rapidly to a 20-year high – which took a toll on early autumn, Bay Area real estate markets.
Though across the Bay Area, thousands of homes continued to be sold – a significant, but declining proportion still selling quickly over list price – the general trend was one of cooling demand, less competition, and declining sales. And, after years of conclusively holding the balance of power, sellers have reacted to the changing circumstances in different ways: Besides increased price reductions since spring, the number of new listings coming on market is well down year over year, and a much higher percentage of listings than normal is being removed from the market without selling.
The economy and housing market remain in a period of adjustment, causing many people to be more cautious as they wait to see how things will settle out. All these factors added up in San Francisco to October 2022 having the lowest number of October
home sales since 2011. On a year-over-year basis, higher-price home sales of $3 million+ fell further (-43%) than the general market (-38%) in October.
The market now enters the 2-month holiday period which typically sees the year’s lowest levels of activity: The numbers of new listings and of listings going into contract usually plunge to their annual nadirs, and an increasing percentage of sellers, especially in higher price segments, pull their homes off the market to await the new year. (Many listings taken off market in November and December will presumably be relisted in Q1 2023.) Still, buying and selling continues, though at reduced levels, and this can be an excellent time for buyers to aggressively negotiate prices.