One might have thought that significant increases in interest rates AND changes in federal tax law severely limiting the deductibility of mortgage interest and property tax costs would somewhat cool the buyer demand. So far it has had zero impact. Over the past few months the most competitive market segment is the lower and middle-price segments of house sales.
The City as a whole has continued to see huge appreciation rates. Appreciation is typically viewed through the lens of percentage changes, but looking at the actual increase in dollars paid for a median priced home is perhaps more visceral. When comparing the first half of 2018 to 2017, the median house sales price in San Francisco increased by an astounding $205,000.
In the luxury market ($3M+), ‘Q2 2018 had 78 sales; just a handful of transactions ahead of the ‘Q2 2017 total of 68. The chart below shows the price segments and neighborhoods of the luxury sales.
So what about our corner of the City? As we saw in ‘Q1; Sea Cliff activity is still very low. But, the Lake Street corridor experienced a huge jump in transactions. Of those Lake Street transactions, the average sale closed at ~3% over the listing price. The biggest overbid of the quarter was 179 14th Avenue- it was pretty much sold before it was formally listed. It was listed at $3,295,000 and sold for $3,700,000: a nice 12% premium for the seller.
Consecutive quarter numbers:
The top neighborhood sales of the quarter:
The theme of this report is that there is clearly a lack of inventory in an already lower than average inventory City. The buyers are there and aggressively competing with all they have to offer. If you are on the fence or have been thinking about selling, now may be a good opportunity to have a pricing analysis of your home. In my experience most San Francisco homeowners are fairly astute when it comes to knowing their ballpark home value. But, over the last 12 months I’ve performed a lot of pricing analyses that demonstrated market values from 10% to 18% higher than the owner expected.