September 2023: San Francisco Real Estate Insider
The fall selling season is in full bloom as we near the mid-month point of September. Last week, the inventory of new listings (to market) spiked to a recent high of over 150 properties. The triple digit number of weekly new listings should continue for the next month. When it slows is anybody’s guess at this point. But, it’s definitely an opportunity for buyers to lock in a new home as sellers compete for attention.
As always, certain price-points are more competitive than others, but overall foot traffic (at open houses) and transactions are trending upwards in the past few weeks. This bump in activity is a positive signal to the market. Last week there was an interesting article in The Wall Street Journal titled “The Fall in Home Prices May Already Be Over” - The take-away quote was “The surprisingly quick recovery of the housing market suggests that the residential real estate downturn is turning out to be shorter and shallower than many housing economists expected after mortgage rates soared last year…there still aren’t enough homes for sale to meet demand.” In the core metro regions of California, the lack of available homes will be an issue for another generation.
From a local perspective, there are two indicators that are of concern before we can get back to a fluid market – the (high) cost of money and employment (i.e. the fear of losing your job). Once rates start to trend downward and stabilize and the corporate downsizing subsides, I expect to see more competition in all market segments. Heck, maybe even SOMA condo’s start to get competitive again?
Looking at some data points for the local market, you know one of my favorite indicators is the list price to sell price. The single family numbers are trending at over 100%, which is steady for the past few months. Condo numbers have decreased, showing more opportunity for buyers.
Speaking of condos, the lack of demand in the greater downtown areas has pulled down the overall citywide condo numbers. But, when looking at neighborhood condos versus downtown condos, you can see a stark difference in values as depicted here.
As noted below, the higher priced home segment has been quite slow for over a year. Is the $5M+ market about to take off? August was the best month we’ve seen since spring. I’d expect to see September show solid numbers.
Looking at the year over year numbers, although grim at a high level, I see the trend moving in the positive direction. Early indicators show late spring to early summer as the bottom of the market. Again, this fall should continue to move in a positive direction.
