July 2023: San Francisco Real Estate Insider

I hope you and your family had a great 4th of July break and found some time to decompress! The last couple weeks have been pretty quiet due the Holiday and vacations, but I am seeing more inventory come online. Lots of this inventory has been available for a few weeks; just not yet listed on MLS (it’s generally not the best idea to list a property when you don’t have a full audience). 

Overall, we have underlying market and economic dynamics that are a mixed bag of often contrary and volatile factors that make it very difficult for anyone to set a forward trend on “what’s next” from a real estate market perspective. These factors include downward-trending inflation, interest rates bouncing between 6% and 7%, substantial rebounds in stock markets, tech layoffs amid generally strong employment statistics and a recovery in buyer demand, sales activity and home prices. And within the city, market conditions often vary by property type, neighborhood and/or price segment within types and locations.

Ultimately, the market is defined by neither just demand nor supply, but by the balance between the two. As we've moved deeper into 2023, that balance has generally tilted to sellers' advantage with homes selling faster, with more offers and for higher prices. Part of this is due to seasonal dynamics, part is due to the lack of sellers (compared to previous years) and part is due to the normalization around higher interest rates.

I often am asked about values and “where” are the best home values in San Francisco. This question obviously needs to be broken into price point and location to fully provide an answer. But, in simply looking at the price point, the overwhelming answer is in the luxury segment, or houses priced above $7.5M. The chart below breaks out the price segments on values.

Another data point that demonstrates market demand is the days on the market. This number has been trending downward since the start of the year.

Looking at the Bay Area and luxury housing, most counties have a large supply of inventory based on trending of sales activity. Keep in mind the active listing count does not include the shadow/off-market inventory.

Looking at luxury house and condo sales by neighborhood, the charts below demonstrate what areas are most active. 

Remember when San Francisco had the highest median home price in the Bay Area? Those days have been over for several years. San Francisco now sits in fourth place when looking at median prices in the Bay Area.