San Francisco Luxury HOUSE Market Report
September 2017 Update
We typically use $3,000,000 as the price threshold for the luxury house market in San Francisco: That approximately defines the top 10% of the market. The ultra-luxury segment starts at $5 million, which constitutes the top 2.5% of sales. Of course, what one gets in the different neighborhoods for the same price can vary dramatically: A fixer-upper in Presidio Heights may go for the same price as a large, gracious mansion in St. Francis Wood in move-in condition. In real estate, the devil is always in the details.
Overview: Listing & Sales Activity
As of mid-month, 29 new luxury house listings priced at $3m+ have come on the SF market since the beginning of September, so it looks like it may be another big month for new listing activity. Of those 29, 4 had already accepted offers by 9/15/17.
If you wish, you may skip our summary
and jump to additional
graphed analyses further below.
The luxury real estate market is impacted by a number of factors: positively, by improvement in general economic conditions and confidence, highly-paid employment and population growth, and especially, by the creation of new wealth in large quantities. All these elements were dynamically present in the Bay Area from 2012 through mid-2015.
Then significant economic and political volatility put a damper on luxury home sales: Chinese stock market turmoil, the crash in oil prices, Brexit, large U.S. stock market swings, as well as an apparent cooling in our high-tech boom, all injected uncertainty into financial and our luxury real estate markets. Furthermore, Bay Area high-tech IPOs, which had created a stupendous amount of new wealth since 2011, basically dried up – and newly rich or further enrichened buyers have played a big role in demand.
These changes in the economic environment caused the SF luxury home market to cool in autumn 2015. Generally speaking, the segment most affected was the market for re-sale luxury condos, particularly in those districts where big, new-construction, projects are concentrated. There has been very little new, luxury house construction in the city – only about 8 to 10 per year built since 2000 (as opposed to many thousands of new condos), which is one reason the SF house segment has generally been stronger than that for condos.
Then in October 2016, after a sudden huge surge in listings, SF luxury house sales hit a new high in sales volume, and in June 2017, the luxury condo market suddenly hit a new high as well. However, neither segment is as strong, as measured by standard market metrics, as it was during the 2014 to mid-2015 peak of market heat. Many of the statistics in this report reflect a similar trend: The market getting increasingly hotter 2012 through mid-2015, cooling from autumn 2015 through most of 2016 (during substantial financial market and political volatility), and then strengthening again in late 2016 and 2017. Now we are waiting to see how the autumn 2017 luxury home market shakes out.
Overview: Dollar per Square Foot Values
Overview: Average Days on Market
Overview: Months Supply of Inventory
San Francisco Luxury House Market
by Neighborhood & District
Median Sales Prices & Avg. Dollar per Square
Foot Values by District
Luxury House Listings & Sales Volumes by District
In the past 6 years, the Noe, Eureka & Cole Valleys district has seen very considerable growth in the luxury house segment. To a large degree, this shift began in the last few years of the previous millennium, when the dotcom boom suddenly erupted. Among other issues, the recent high-tech booms have somewhat changed the demographics of Bay Area wealth and of the SF luxury home buyer, and the lower-key neighborhood ambiance many younger, newly affluent buyers prefer. Another factor is that this district is much closer to highways south to the peninsula and the head offices of many high-tech giants than the wealthy northern neighborhoods. All in all, it constitutes a totally different choice from neighborhoods like Pacific Heights and Russian Hill, and from the newer, luxury high-rise condos of South Beach-SoMa, each of which appeals to a different, but substantial segment of buyers.
Top Luxury House Districts: Months Supply of Inventory
Top Luxury House Districts: % of Sales Accepting Offers within 30 Days
Top Luxury House Districts: % of Sales over List Price
Top Luxury House Districts: Listings Taken Off Market without Selling
Ultra-Luxury House Sales in San Francisco
The Top 2.5% of Sales, $5m+
The most expensive house sales are clustered in the Pacific & Presidio Heights district, with typically a handful-plus sales each in the Russian, Nob & Telegraph Hills district and the Noe, Eureka & Cole Valleys district (which includes Ashbury Heights and Buena Vista Park). Every now and then a huge Alamo Square mansion will sell in this price range. Russian Hill and Sea Cliff have very few house sales in any given year, but they sometimes sell for prices well over $10m.