Friends, clients, and colleagues:
As interest rates continue their historic climb (up 69% from Jan. 1st) and stock markets continue downward (Nasdaq down 22%; S&P down 15%), we are starting to see the signs of softening demand in some pockets of San Francisco. This isn't seen in the recorded data (April 2022 figures are off the charts, noted below), but remember, recorded April data reflects contracts signed back in March. The softening demand I'm referring to is what us agents are feeling in real time.
Quick reference April 2022 median sales price:
Single-family: $2,050,000 (+13.9% Y.O.Y.)
Condos: $1,362,500 (+12.6%)
Here's what I'm seeing in the market:
- Interest rate hikes are having a bigger impact on
the lower price segment (sub $2M).
- A+ properties (what I define as condos or single-family homes in premium locations, quality floorplans, and check all boxes - parking, in-unit laundry, outdoor space, natural light) are still seeing an exceptionally high # of offers & surpassing seller expectations. The demand within this segment is still high enough, and the supply is low enough, that the current rise in interest rates and lower stocks isn't showing any real impact. This could change if these turbulent financial conditions are sustained. In the same breath, it's important to remember that San Francisco is a perpetually low inventory market.
- The opportunity that exists right now is for buyers with willingness to renovate, or make some sacrifices from the wish-list. Within this category you can find a motivated seller and score a good deal. I know of several right now.
Reach out to me directly with any questions about how to succeed in these current market conditions. I'm always happy to help!
Sincerely,
Ron
