San Francisco Market Update

San Francisco Market Update

May 2023

Clients, friends, and colleagues:
 
Will we look back at Q4 2022 as the bottom of the general market in San Francisco? When will we see the bottom for median sale prices in our more urban, downtown sectors of the city? These are the questions on every buyer and seller's mind. No one knows, but I will say:
 
Remote work, office vacancy, reduced foot-traffic, businesses continuing to leave our marketplace... these are major factors, specifically for our downtown neighborhoods. But being a global city, on the leading edge of technology and the innovation economy, with a wonderfully mild climate in one of the most objectively beautiful areas of the world, on a small 7x7 peninsula of limited inventory... keep in mind that when the tide changes, it will change quickly.
 
Quick tid-bit: Of the 49,425 layoffs announced by SF companies, only 8,526 will be cut from offices in the city according to reports filed by the city. San Francisco boasts the second-lowest unemployment rate at 3% across CA. Per SF Standard.
 
The general flight to suburbia since the onset of the pandemic, coupled with San Francisco's high exposure to the tech industry (and thus the highest office vacancy rates in the country), resulted in lower rates of appreciation during the pandemic boom, and now larger price declines since the market shifted in mid-2022 (relative to the greater Bay Area). Even still, our market here in San Francisco has seen a bounce back from Q4 2022: the 2023 housing market has mostly* been moving in a positive direction.
 
*except for our more urban centers (think East Cut, South Beach, SoMa, Mission Bay, FiDi, Lower Nob, Civic Center, etc). I've seen some incredible, recent contracts in these areas at values from as far back as 2013!
 
Though mortgage applications are still well down year over year, many buyers have accepted higher interest rates as the new normal and decided to move forward - and, in the last 2 months, rates have been trending downward. Open houses are seeing increased traffic, more listings are selling, and selling more quickly with multiple offers. Median sales prices have generally been ticking back up in 2023, though of course still down across the Bay Area from the market peak last spring.
 
Even with the increase in demand, sales activity remains far below last spring due to a number of economic and supply constraints. While increasing from mid-winter lows (with some very big sales occurring), luxury home sales volumes have generally seen larger declines as compared to the peak of the pandemic boom, when luxury sales were hitting spectacular new highs.
 
The number of new listings has also dropped from historic norms. This is mostly ascribed to the "mortgage lock-in effect," i.e. owners with very low, long-term, fixed-rate mortgages are reluctant to sell to then buy at much higher prevailing rates. This decline in new listings has major ramifications for supply/demand dynamics, and increases pressure on prices even in a reduced activity environment.
 
Some uncertainty continues with inflation, interest rates, stock markets, bank crises, high-tech layoffs, and now, as of early May, federal debt-limit negotiations, but as mentioned earlier, our market is generally moving in a positive direction as compared to Q4 2022.
 
As always, reach out with any questions. I'm here to assist you in optimizing your real estate goals.
 
Cheers,
Ron
 
Active, coming soon, and recent sales @ the bottom

Coming Soon

San Anselmo

165 Crescent Road

7 BD 6 BA 5757 SF $5,995,000

Active Listings

Mission Bay

260 King Street, Unit 429

1 BD 1 BA 600 SF $599,000

South Beach

400 Beale Street, Unit 714

3 BD 2 BA 1433 SF $1,375,000

South Beach

338 Spear Street, Unit 39E

3 BD 2 BA 1582 SF $2,625,000

Twin Peaks

1 Burnett Avenue North, Unit 9

3 BD 3 BA 2157 SF $1,795,000

Recent Sales

sausalito

265 Santa Rosa Avenue

3 BD 3 BA 2247 SF $1,850,000

Corona Heights

114 Douglass Street

4 BD 3 BA 1965 SF $1,655,000

ronsellsthecity.com

Ron Salter
 
DRE #: 01989381
REALTOR®
M: 415.717.8752
[email protected]
Montgomery + LEE

Statistics are generalities, essentially summaries of widely disparate data generated by dozens, hundreds or thousands of unique, individual sales occurring within different time periods. They are best seen not as precise measurements, but as broad, comparative indicators, with reasonable margins of error. Anomalous fluctuations in statistics are not uncommon, especially in smaller, expensive market segments. Last period data should be considered estimates that may change with late-reported data. Different analytics programs sometimes define statistics - such as "active listings," "days on market," and "months supply of inventory" - differently: what is most meaningful are not specific calculations but the trends they illustrate. Most listing and sales data derives from the local or regional multi-listing service (MLS) of the area specified in the analysis, but not all listings or sales are reported to MLS and these won't be reflected in the data. "Homes" signifies real-property, single-household housing units: houses, condos, co-ops, townhouses, duets and TICs (but not mobile homes), as applicable to each market. City/town names refer specifically to the named cities and towns, or their MLS areas, unless otherwise delineated. Multi­county metro areas will be specified as such. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers to be considered approximate.
 
Many aspects of value cannot be adequately reflected in median and average statistics: curb appeal, age, condition, amenities, views, lot size, quality of outdoor space, "bonus" rooms, additional parking, quality of location within the neighborhood, and so on. How any of these statistics apply to any particular home is unknown without a specific comparative market analysis.

Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.

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San Francisco Market Update | May 2023 Report

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San Francisco Market Update | May 2023 Report

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