San Francisco Home Prices, Market Conditions and Trends August 2022
It’s hard to believe that we are almost through the month of August! We hope you have had some relaxing times with friends and family during these past summer months.
As summer slips into autumn and nights begin to grow longer, the final super moon of the year made a big splash last week. It was a beautiful sight! Hope you were able to enjoy it. Click on the picture above to check it out.
Across the Bay Area, markets have continued to slow and cool. Mid-late summer is usually a much slower period compared to the spring selling season. Autumn typically sees a very substantial spike in new listings and sales prior to the big mid-winter slowdown. We will need to see what unfolds over the next several months.
This report will review year-over-year changes in prices and supply and demand, reflecting the significant adjustments from the heated (often overheated) conditions recently the norm, but also look at longer-term trends to provide greater historical context. There is also a comparison of home prices within the local market and across the Bay Area.
Highlights of this update:
As of early August, the average, weekly mortgage rate for a 30-year fixed rate loan fell below 5% for the first time since April, and stock markets have seen large rebounds since early July – but these and other indicators have been subject to sudden and often dramatic volatility, and their future directions can’t be taken for granted. Within this report is a link to a review of many of the macroeconomic factors at play.
Over 5200 home sales were reported to MLS from Napa County to Monterey in July 2022 – many of them selling quickly for over asking price – but that number is down 38% from last year. Median home price appreciation rates in the Bay Area have seen steep declines from those in 2021/early 2022 – and in June/July, SF median house prices were down year over year. Changes vary in degree by location and market segment, but the direction of the shifts is near universal.
Comparing July 2022 with July 2021, the number of active listings on a given day of the month was up about 29%.
Comparing July 2022 and July 2021, the number of home sales was down about 33%, with house sales down about 27%, and condo, co-op and TIC sales down about 36%.
Comparing July 2022 and July 2021, the number of listings accepting offers was down about 36%.
Comparing July 2022 and July 2021, the number of homes selling for $3 million+ was down ~48%.
Comparing July 2022 with July 2021, the number of reported home sales for $5 million+, was down 50%.
In the latest month, 57% of sales closed over final list price, down from 73% in April.
Houses have had much higher average overbidding percentages than condos. Both have seen large declines since April 2022 – 13 points for houses, 7 points for condos. This statistic fluctuates by season and is a lagging indicator of market activity 3-6 weeks earlier.
Houses have much lower average days-on market readings than condos. Numbers have been climbing from April 2022.
So what’s to come as we step into the Fall market –
Now is a great time to buy a house if you had the money before but couldn’t compete with the herd. Many of the headwinds that stopped buyers from snagging a new home are softening. After nearly two years of market fervor and fears of a housing bubble, the red-hot market is cooling. And while home prices remain high, buyers who can afford to close a deal will likely face fewer headaches than they have recently.
The good news for buyers is that the Fed’s next rate hike won’t arrive for another month, when the Federal Open Market Committee meets on September 21. Until then, buyers still have the chance to take advantage of slightly lower mortgage rates and a market that’s swinging in their favor.
We believe in real estate and feel that opportunities will arise.
We remain optimistic that the stock market will normalize, and interest rates will balance by year-end to a new standard and lenders will have products that are beneficial to buyer’s needs.
We are happy to assist your family & friends with their real estate needs – feel free to forward our updates or introduce us via email to anyone you know.
We know the market – and how best to navigate through it.
What questions are on your mind? We invite you to reach out to us with any market questions, a market evaluation of your home’s current value, or any local or out-of-state real estate needs.
If you have questions regarding options outside our market area, our referral network is officially the best in the United States. If you are thinking of relocation or investment in another market area in the coming year, now is an excellent time to start planning. We can provide you and your friends market information as needed for any area of interest. We have all the market experience and professional resources to collaborate with you to help achieve your goals.