San Francisco – August 2016 The Real Estate Update

In the fast paced and ever changing world of San Francisco real estate, reviewing yearly market trends with monthly breakdowns is the most viable way of staying on top of the market. Monitoring yearly data enables buyers and sellers to fully understand where the market has been and where it is going.

Overall, the real estate market has achieved a “Soft Landing’ this year, with the best evidence of this being the modest increase in median sales price. Over the past twelve months, condo prices have increased by 2.76%, and single-family homes by 6.25%. On a month-to-month basis, condo prices have remained relatively constant, while the price of single-family homes has varied by as much as $235,000.

Median Sales Price

Average Days on Market – 14% 23.3%

# Units Sold – -16.1% -9.7%

More Insights

Over the last 12 months, there has been a very slight increase in Days on Market. To a seller eager to sell their home, an increase in Days on Market sounds daunting, but in reality, it has only taken 7 more days to sell a condo and 4 more days to sell a single-family home. This directly reflects the fact that inventory has increased 29% for single-family homes and 56% for condominiums. This translates to an increase in the Month’s Supply of Inventory (MSI), a term statisticians use to tell us how long it would take to sell out our current inventory, with single-family homes at 2.2 months and condominiums at 2.5 months. An MSI of 4 – 6 is considered a balanced market, thus we are still experiencing a strong seller’s market.

When looking at statistics, seasonality always has to be considered. The market is more active in spring and fall, and slower in winter and summer. However, even considering seasonality, the difference between list price and sale price has tightened over the last 12 months. When compared to last July, the average list price/sale price ratio for single-family homes is down by 8 points and down 4 points for condominiums. Although inventory has increased July over July, the number of sales has decreased, which helps explain the modest increase in appreciation. (These increases, by the way, would be considered good in most parts of the country). This is further evidence of the soft landing we’re experiencing.

% List Price Received

Months Supply of Inventory

SFRs – For Sale vs Under Contract + Sold

Condos – For Sale vs Under Contract + Sold