June 2023: San Francisco Real Estate Insider
The market continues to show its finicky side as we start summer. There have been a lot of distractions for buyers and sellers; interest rates, local bank woes, debt ceiling effects and the non-stop news cycle of doom & gloom as it relates to quality of life issues in our City.
Regardless, the market is moving. The single family segment up to $2M is very competitive, the $2M-$5M segment is active with quality homes gaining multiple offers and the $5M+ market has no real ebb or flow. Causes of this segments dysfunction vary, but the bottom line is we have a lot of sellers. Buyers are calling the shots as they have a lot of options in a given neighborhood; often times on the same block! On a year over year basis (considering last year at this time interest rates were in the upper fours / low fives), the $5M+ segment activity is down, huge. For reference:
Luxury home sales in San Mateo and Marin County continue to outpace San Francisco. Median prices are still high in San Francisco compared to other metros and that is one of the drivers of the outflow. For reference, here is a sampling of median prices in common destination metros:
On the home insurance front, State Farm and Allstate are no longer writing new policies in California effective May 27th. I see this as a cyclical event as it has happened before; insurers drop out of California and eventually come back in. What does this mean to the homeowner and the buyer? Homeowners; do not miss a premium payment as its likely your carrier will use this as reason to increase your premium (or drop coverage). Occupancy and type of home are going to make a huge difference in coverage as well. Carriers are leaving space for primary homes. New secondary home (purchases) and investment properties may have to be placed with non-admitted carriers.
What about buyers with a new home in contract (or shopping for a home)? I would make sure my buyers have an insurance contingency in their offer so they have time to get a policy locked in (before all of their contingencies are up).