15 May San Francisco Neighborhood Home Prices Continue to Break Records
I’ve been back from my sabbatical for a full 4 weeks and I think I am just now really getting used to the pace of life here. It’s all good, but it has taken time. I have been able to get some very good habits into place that are really making a difference in how I feel each day and for that I’m very proud and thankful.
Now I really am ready to sell some homes!!
I wish I could say that this report was encouraging for buyers -it’s not, but it is interesting and it helps to be informed. I will say that in past years, many buyers (and sellers) checked out of the market to go on vacation in the summer and often there are some deals out there to be had.
If you hang in there and keep working, a good agent will find you something. Just remember it takes a motivated buyer and a darn good agent to get you into contract!
87% of my buyers are getting into contract within the first two offers and in an average time of 6 weeks, even in a tough market. But if you’re not doing your part, the agent can’t MAKE it happen.
For those of you that are my luxury clients, (5 million and above) the majority of the summer months’ inventory will most likely be sold OFF market, so let’s stay in touch if you want to buy something.
For those of you that are looking to sell, let’s talk! We desperately need inventory and I can help you prepare your home in a way that will make you a lot of money.
I’m still doing double takes on the 33% appreciation that these stats are showing for Glen Park, this spring alone. Something has to be off there!
If you need any help with anything, give me a ring! I love to help!
All my best,
Ps- Stay tuned for a new listing with great views coming soon near the Glen Park border 😉
Home Values by Neighborhood; Investment Real Estate; New Development
The chart above graphs monthly house and condo median price appreciation in the city since the market recovery began in early 2012. The 2 charts below are snapshots of changes in median sales prices in a sampling of 6 different SF neighborhoods from early 2013 to early 2015, one for houses and one for 2-bedroom condos. (The 2015 prices in these charts below may vary from those earlier in this report, because slightly different parameters were used.)
Bayview, Bernal Heights & Glen Park Houses
Hayes Valley, Inner Mission, South Beach 2-Bedroom Condos
Luxury Home Sales
High-end home sales continue to hit new highs in San Francisco: Last spring was the hottest on record; spring 2015 is blowing through last year’s numbers. The chart above is from our updated luxury report, which can be found here:
SF Luxury Home Market Report
Housing Affordability Index
This CAR Housing Affordability Index (HAI) is calculated using median sales price, household income, interest rates and other financial criteria to determine the percentage of local households which can afford to buy a median priced home. At 12% to 14%, San Francisco and San Mateo have very low affordability readings in comparison to other places – the Index reading is now 23% for the general Bay Area, 34% for CA (house market), and 61% for the U.S..
Affordability calculations are a complex and nuanced issue, especially in San Francisco*. However, one can’t argue with the general trend lines. When the market heats up and prices rise, affordability goes down; when the market goes into a recession (or crashes), affordability bounces up. If affordability declines beyond a certain point, it may become an indicator of an overvalued real estate market. As of Q1 2015, SF’s Index reading is still a little above the historic lows it hit in 2001 and 2007, but please see the footnote for special SF factors.
Changes in mortgage interest rates, in particular, can quickly and significantly affect affordability. Currently, as of May 2015, interest rates are a little above the historic low hit in 2013, but still far below the rates in 2006 – 2008, when they averaged in the 6% to 6.5% range. “Experts” have had a very difficult time correctly predicting interest rate movements in recent years.
New Listings & Buyer Demand
The above chart illustrates the seasonal ebb and flow of the market as new listings come on the market and buyers react by putting properties under contract. Spring is typically the biggest selling season of the year, followed by a large spike in autumn. Market activity usually slows in summer and plunges during the winter holiday season.
Multi-Unit & Investment Real Estate
The two charts below are from our recently issued reports on the multi-unit building market, the first on properties of 2 to 4 units, and the second on larger apartment buildings of 5+ units. The second chart illustrates the parallels between rents and home prices in counties around the Bay Area. Regarding affordability: If someone’s choice is between paying a very high rent or buying an expensive home at today’s low interest rates and with all the tax advantages of homeownership, buying is typically the much better option financially over the longer term. But the devil is always in the details.
The full reports can be found here:
Housing Inventory & New Home Construction
The first chart below and the map following it depict the current boom in new-home construction and the districts where new development is clustered. The second chart illustrates the growth of the condominium segment of the city’s housing inventory via both construction and conversion.(A lot more is coming.) The new-home development situation in San Francisco is fascinating – and a fierce political issue.
Our full report on the topic is here: Paragon Housing & Construction Report
New residential construction is heavily concentrated around the Market Street corridor, the Van Ness corridor just north of Market, and in the large quadrant of the city that lies to the southeast of Market. This is due to the availability of large, previously commercial/industrial-use lots that can be changed to residential use, and the zoning that allows for large – sometimes very large – projects to be constructed in these areas.
Though only about 40 years old, the condo sales market in the city is now larger than the house market. And 99% of all new construction being built for sale consists of new and usually high-end condos.