As summer is in full swing the Q2 report shows a tale of two very different neighborhood activity levels. The Lake Street corridor is white hot with everything going to market selling quickly with multiple offers. Sea Cliff has been very quiet with no notable new activity. I don’t take the lack of activity in Sea Cliff as a concern; it’s simply a lack of supply. If there were available inventory at market prices in Sea Cliff it would sell (as it has in the Lake Street corridor).
Here are the sales numbers for the first quarter:
In looking at the first half of the year numbers, you see the inverse relationship for the two neighborhoods:
For reference, if the four “stale” Sea Cliff properties referenced last quarter sold at a price 20% below asking, the quarterly neighborhood price per foot would move up to $1,686 and the average sales price would jump to $8,521,500. So what happened to the four properties mentioned last month?
- 157 28th Avenue: withdrawn from the market and offered as a rental
- 308 Sea Cliff Avenue: still available at $14,000,000 (220 days on the market)
- 320 Sea Cliff Avenue: still available at $14,000,000 (288 days on the market)
- 224 Sea Cliff Avenue: still available at $19,685,000 (218 days on the market)
Here are the top sales of the quarter:
What to expect for the rest of the summer?
- Continued lack of inventory in Sea Cliff and a flow of new properties in the Lake Street corridor
- Interest rates; after three bumps in six months it looks like the Fed may include a fourth by year end. But, a lack of consensus by Fed officials on a long term plan (for the Bank) may indicate no rate hikes for 2018. Overall, 30 year money is still relatively inexpensive.
- Jobs; when will we see a letting? Many economists pegged 2017 for a greatly reduced hiring pace in Bay Area tech. I don’t see it.