Clients, friends, and colleagues:
More headwinds hit the San Francisco real estate market as interest rates continue their rise (average 30-yr fixed is over 7%), and substantial layoffs in the tech industry occurred at Meta (11,000), Twitter (3,700), and Salesforce (1,000) in the past week or so.
At the same time, late last week, an inkling of good news on the inflation front sprouted the biggest 2-day pop in tech stocks since the financial crisis. This shows how quickly markets can change, and when considering a perpetually low inventory market like San Francisco, it also shows how waiting for the bottom can be an impossible and costly task.
A deep-dive into the statistics is provided below, but I'll quickly detail some stand-out figures and my personal analysis:
The most interesting stat, I think, is that we had the fewest number of transactions this October in San Francisco (total of 412) since 2011. The average # of sales in October from 2012 - 2021 was 584. That's nearly a 30% decline off the average.
While there are indeed some motivated sellers/great deals out there (and there will likely be even larger discounts as we brush up against the holidays), the vast majority of sellers are opting to pull their homes from the market instead of selling for a larger discount.
Median sales price in October (Single-Family):
$1,680,000 | Down 6.7% year-over-year
Median sales price in October (Condos):
$1,215,000 | Down 2.8% year-over-year
The different story in District 9* vs. the rest of SF (year-over-year):
# of condo sales in all of SF except D9 is down 39%, while the
# of condo sales
in D9 is down 52%.
Median sales price of 2-bed condos in all of SF except D9 is down 4%, while the median sales price of 2-bed condos in D9 is down 14%.
*District 9 includes some of our most condo-dense sectors of SF: SoMa, South Beach, Mission Bay, Dogpatch, Potrero Hill.
My current advice to clients on the fence about purchasing: you have tremendous leverage as a buyer in today's market. Target properties with high days on market, and make sure you're working with an agent that is especially strong in negotiations. I have the knowledge and finesse to keep negotiations unemotional, using data to drive deep discounts off stale seller expectations.
As scary headlines roll out, and we brush up on the optimal time of the year to find motivated sellers, now is the time to be fully underwritten and ready to write some low-ball offers.
Feel free to reply to this email with any specific questions or inquiries. I'm happy to help and never too busy for your referrals.
