San Francisco Real Estate Market | August 2020

19 Aug San Francisco Real Estate Market | August 2020

San Francisco Real Estate Market
Mixed Indicators

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.

 

 

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It is impossible to know how median and average value statistics apply to any particular home without a specific comparative market analysis. 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.
Compass is a real estate broker licensed by the State of California, DRE 01527235. Equal Housing Opportunity. This report has been prepared solely for information purposes. The information herein is based on or derived from information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy or completeness of the information. Compass disclaims any and all liability relating to this report, including without limitation any express or implied representations or warranties for statements contained in, and omissions from, the report. Nothing contained herein is intended to be or should be read as any regulatory, legal, tax, accounting or other advice and Compass does not provide such advice. All opinions are subject to change without notice. Compass makes no representation regarding the accuracy of any statements regarding any references to the laws, statutes or regulations of any state are those of the author(s). Past performance is no guarantee of future results.