San Francisco Bay Area Real Estate Market Conditions, Trends, & Home Prices in San Francisco

23 Jan San Francisco Bay Area Real Estate Market Conditions, Trends, & Home Prices in San Francisco

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Dear friends,

Happy New Year! I hope that you were able to enjoy time with your family and relax over the holidays.

We ended the year in Australia and visited Sydney, Port Douglas, and Perth. It was nice to get away and have some time to connect with my boys. Life in Australia is definitely all about balance. For instance, many of the retail shops close at 6pm so families can be together. What I love about traveling is seeing that there is more than one way to live life. It’s nice to get off the hamster wheel for a minute and rethink things.

I have to say that for January, the market feels unusually busy and I think 2018 is going to be very solid. In fact, I’m beginning to wonder if the usual “spring rush” is here early this year as we’re already feeling the price increase that we’ve experienced in many past springs. We have quite a few very active and determined sellers and buyers.

People are asking about the new tax reform and quite frankly, I don’t see that it’s going to affect the market here. The bottom line is the average median-priced home will see an increase of $6,000 to $10,000 per year in taxes, but this doesn’t take possible decreases into consideration. My sources tell me that it may almost even out, but you should talk to your CPA to be sure. If it does end up being $6,000-$10,000, this is not a trivial increase, but it’s not typically an amount of money that will affect someone’s buying decision.

Obviously, the whole picture needs to be taken into consideration when it comes to the loss of certain tax breaks. Feel free to call me if you’d like to discuss this in more detail.

In this month’s newsletter, we compiled some data to give you a sense of 2017’s real estate market. The median single-family home price hit $1.42M and the average price of houses with Golden Gate Bridge views almost hit $3.3M. There are many other informative tidbits in there, so enjoy.

As always, I’m here for you anytime if you want to talk real estate!

All the best,

Ruth


Market Conditions, Trends, & Home Prices in San Francisco

Looking Back on 2017

Looking Forward to 2018

January 2018


The median SF house sales price in 2017 was $1,420,000 (up from $1,325,000 in 2016), and for condos, it was $1,150,000 (up from $1,095,000). Looking just at the 4th quarter, median prices were $1,500,000 for houses (up from $1,350,000 in Q4 2016) and $1,185,000 for condos (up from $1,078,000) respectively.

SF Market News Bay Area Real Estate Charts Homes - 1 Median Home Sales Price by Year Trends 2018
SF Market News Bay Area Real Estate Charts Homes - 2 Median Sales Price Appreciation 2018SF Market News Bay Area Real Estate Charts Homes - 3 Price Appreciation by Quarter 2018

Additional chart: Bay Area Median Home Price Trends by County

The chart below, based on S&P Case-Shiller Index data, tracks general price appreciation trends of homes in the upper third of prices in the 5-county SF Metro Area. Case-Shiller does not base their calculations on median sales price changes but uses its own proprietary algorithm. This chart has been simplified to only reflect percentage increases and decreases from various points in real estate cycles. Since it covers 5 counties, it is a very generalized illustration.

SF Market News Bay Area Real Estate Charts Homes - 4 Cycles S&P Shiller Price Index 2018
Link to our full report on the Case-Shiller Home Price Index

Link to our report on SF Bay Area real estate cycles

 


Moving into 2018, there are a lot of spinning plates in the air – local, state, national and international factors that could affect markets. 2017 saw real estate markets surge and financial markets soar. After some cooling from mid-2015 to mid-2016, the Bay Area high-tech economy surged back into high speed, with companies leasing enormous spaces in newly built office buildings – which they will presumably fill with new hires. Unemployment rates have flirted with historic lows, and 2018 may see some major local IPOs, which could create great quantities of new wealth. The Bay Area still has probably the most dynamic, innovation-fueled economy in the world and indisputably remains among the great metro areas on the planet – but there are also significant social, economic, political and environmental challenges looming.

Congress delivered an unpleasant holiday present to many Bay Area residents in the form of federal tax law changes limiting the deductibility of mortgage interest and state and local taxes. The effect of these changes make living in an already high cost-of-living area more costly for many residents, and also reduce some of the financial incentives of homeownership, especially for more expensive homes. Predictions on the effect of these tax changes on local housing markets and the business environment range from one extreme (economic devastation) to the other (shrug), and the state legislature is currently working on bills that might blunt the negative financial impacts. It is too early to guess how it will all play out. We live in interesting times.

This January 2018 report will range far and wide looking at real estate, and some economic and demographic issues that impact it. Most of the charts are self-explanatory, so we have kept the text to a minimum. A review of annual, year-over-year, real estate market trends in San Francisco are at the end of this report.


SF Market News Bay Area Real Estate Charts Homes - 5 Sales by Property Type 2017

SF Market News Bay Area Real Estate Charts Homes - 6 Median House Sales Prices with Golden Gate Bay Bridge Views

SF Market News Bay Area Real Estate Charts Homes - 7 San Francisco Seasonality 2018

Link to our report on market seasonality

 

SF Market News Bay Area Real Estate Charts Homes - 8 California Migration Trends moving out 2016

Link to our analysis of domestic and foreign migration trends

Link to our new survey of SF & Bay Area demographics

 

SF Market News Bay Area Real Estate Charts Homes - 9 San Francisco Population Growth Trends 2018

SF Market News Bay Area Real Estate Charts Homes - 10 San Francisco Employment by year 2018

SF Market News Bay Area Real Estate Charts Homes - 11 Stock Index Trends 2018

SF Market News Bay Area Real Estate Charts Homes - 12 Average Annual Interest Rates 2018

Link to our report on economic context factors

 

SF Market News Bay Area Real Estate Charts Homes - 13 Housing Affordability Index 2018

Link to our report on Bay Area housing affordability

 

SF Market News Bay Area Real Estate Charts Homes - 14 Median List Rents by Counties 2018

Link to our report on the apartment building market


San Francisco Luxury Homes Market

SF Market News Bay Area Real Estate Charts Homes - 15 Luxury House Sales Trends 2018

SF Market News Bay Area Real Estate Charts Homes - 16 Luxury Houses Selling Noe Valley, Pacific Heights, Hayes Valley, Alamo Square, Potrero Hill, Nob Hill, Inner Mission D

SF Market News Bay Area Real Estate Charts Homes - 17 Luxury Condo Sales Trends 2018

SF Market News Bay Area Real Estate Charts Homes - 18 Luxury Condo Market Sales Review Pacific Heights, Presidio, Cow Hollow, Hayes Valley, NOPA, SOMA, Mission District


SF Home Prices by Neighborhood

SF Market News Bay Area Real Estate Charts Homes - 19 Prices by San Francisco Neighborhood District

SF Market News Bay Area Real Estate Charts Homes - 20 Where to buy a house in San Francisco under $1500000 2018

SF Market News Bay Area Real Estate Charts Homes - 21 Where to buy a house in San Francisco $1.5M-$2,999,000 in 2018

SF Market News Bay Area Real Estate Charts Homes - 22 San Francisco 4 & 5 Bedroom house values

SF Market News Bay Area Real Estate Charts Homes - 23 San Francisco 3-bedroom House Values 2018

SF Market News Bay Area Real Estate Charts Homes - 24 San Francisco 1-bedroom condo values 2018

SF Market News Bay Area Real Estate Charts Homes - 25 San Francisco 2-bedroom Condo Values 2018

SF Market News Bay Area Real Estate Charts Homes - 26 San Francisco Condo Sales Prices below $2 Million 2018


Annual Market Trends

Most of these annual trend charts show the market heating up again in 2017 after some cooling in 2016. Very generally speaking, since 2015, the house market has been hotter than the condo market, and the more affordable neighborhoods hotter than the more expensive. But 2017 was a strong year across virtually all market segments.

SF Market News Bay Area Real Estate Charts Homes - 27 San Francisco Median House Price Changes 2018

SF Market News Bay Area Real Estate Charts Homes - 28 San Francisco Median Condo Price Changes 2018

SF Market News Bay Area Real Estate Charts Homes - 29 Percent of Sales within 30 days OMD trends

SF Market News Bay Area Real Estate Charts Homes - 30 Average Sales Price to List Overbidding Trends

SF Market News Bay Area Real Estate Charts Homes - 31 Average days on market 2018

SF Market News Bay Area Real Estate Charts Homes - 32 Months Supply of Inventory (MSI) Trends

SF Market News Bay Area Real Estate Charts Homes - 33 New Listings vs Sold Trends 2018

All our real estate analyses can be found here: Paragon Market Reports

Information on neighborhoods not included in this report is readily available.

If you will forgive a little celebration on our part: In 2017, Paragon became the largest brokerage in San Francisco by dollar volume sales of residential and multi-unit residential real estate (as reported to MLS, per Broker Metrics). We opened our doors in 2004.

Updated Home Value Charts – January 2017

Median Sales Prices & Average Dollar per Square Foot Values
Rolling 3-Month Figures

SF Market News Bay Area Real Estate Charts Homes - 34 San Francisco Median Sales Price Appreciation 2018

SF Market News Bay Area Real Estate Charts Homes - 35 San Francisco Home Value Appreciation Average Dollar per Square Foot

Selected Year-over-Year Comparisons
San Francisco House & Condo Markets

Each data point reflects 3-months-rolling market activity of the year specified, i.e. the December statistic reflects October, November and December sales as reported to MLS. These are auto-updating charts, changing with the passing of each month, but will always reflect the most recent 3-month period, comparing it to the same period in the previous 2 years.

Gold columns reflect SF house sales; Purple columns reflect SF condo sales

Median Sales Prices

Average Dollar per Square Foot on Sale

Sales Volume: Rolling 3-Month Period

Months Supply of Inventory (MSI)

The lower the MSI, the stronger the demand as compared
to the supply of listings available to purchase

Average Days on Market

Median Percentage of Sales Price to Final List Price – Overbidding


It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis. In real estate, the devil is always in the details.

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term. Late-reported MLS activity may change certain statistics to some small degree.

© 2018 Paragon Real Estate Group
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