San Francisco Home Prices, Market Conditions & Trends July 2023
Stepping into August…   As we move further into 2023, we anticipate the San Francisco real estate market to maintain its momentum. However, we encourage both buyers and sellers to remain vigilant and adaptable in response to market fluctuations. For sellers, accurately pricing your home based on the latest market trends is crucial to attracting qualified buyers swiftly.   Underlying market and economic dynamics in 2023 have been a mixed bag of often contrary and volatile factors – including downward-trending inflation; interest rates still bouncing between 6% and 7%; general uncertainty regarding what the Fed will do next (next meeting this Wednesday); substantial rebounds in stock markets; banks, commercial real estate, and debt-default crises; international political, economic, and military conflicts; high-tech left amid generally very strong employment statistics; and recovery in buyer demand, sales activity, and home prices – but all 3 remain significantly lower than the peak of the market in spring 2022. And within the city, market conditions of course vary by property type (houses generally seeing higher demand), neighborhood (the downtown market remains relatively weak), and/or price segment within types and locations.   Ultimately, the market is defined by neither just demand nor supply, but by the balance between the two. As we’ve moved deeper into 2023, that balance has generally been titled to sellers’ advantage, with homes selling faster, with more offers, for higher prices. Part of this is due to seasonal dynamics: Spring is commonly the highest-demand, most active selling season of the year. But the contrast with the 2nd half of 2022, when demand and sales plunged, is more than seasonal. It also reflects a rebound in psychology, with many buyers deciding to move forward with their life plans.   For most Bay Area markets, summer has historically been a slower period after spring – with some regions such as San Francisco, seeing a relatively short (6-8 week) spike up in activity in autumn before the big midwinter slowdown – but typical seasonal trends have been upended a few times in recent years. Certainly, a substantial amount of buying and selling will continue to occur in the coming months, as well as variations in underlying economic conditions, which we will cover in detail in future reports.   Recapping the Market Activity:
  • Year over year, the Q2 2023 median house sales price was down about 20% from Q2 2022 (the market peak).
  • Year over year, the Q2 2023 median condo sales price was down about 11.5% from Q2 2022 (the market peak).
  • There were 12 house sales of $10. million+ reported during the 12 months, and 4 sales of $20 million+.* Measuring how long it takes for sold listings to accept offers. Houses have significantly lower average days-on-market readings than I condos, but both have been falling.
  • By property type, the % selling over list price in June 2023 for houses was 70%, and for condos, co-ops, and TICs, 37%. On average, SF houses are selling well above the 2022 asking price, and condos are slightly below. This statistic fluctuates by season and is a lagging indicator of market activity 3-6 weeks earlier.
  • 40% of SF housing units are owner-occupied and 60% are tenant occupied: By far the highest tenant ratio in the Bay Area.
  • Total Housing Units: 414,581 Occupancy Rate: 85%. Vacancies are concentrated in rental units.
  • San Francisco has the highest % of studio and 1-BR units in the Bay Area.
  • From April 2020 to July 1, 2022, the county’s population dropped by an estimated 7.5%. Population changes are driven by domestic and foreign migration trends, and by natural causes (births & deaths).
  • Before the pandemic, counties at the center of the high-tech boom saw resident numbers in the 25 to 39 age group soar.
  • Since then, with work-from-home and high-tech layoffs, this group has seen the largest decline: The number of SF residents aged 25-39 dropped by an estimated 44,800. Very generally speaking, as pertaining to real estate, this group is more likely to be renters or condo buyers.
  • 2020 to 2022, the county’s median age increased from 38.7 to 40.5 years.
  • As a percentage, SF’s population under 20 skews very, very low.
  • Year over year, the new-listing volume in June 2023 was down 32%.
  • Of the listings for sale on July 1, 29% were houses, and 71% were condos, co-ops, TICs & townhouses.* Houses, condos, co-ops, TICs, townhouses: Active/Coming-Soon listings posted to NorCal MLS Alliance.
  • March-June sales in 2023 were down about 35% from the same period in 2022. The decline in the number of new listings was one factor.
  • March-June sales of $3m+ in 2023 were down about 48% from the same period in 2022. As of early July, there were 151 active listings priced at $3m+.
  • For homes of $20 million+ as of 6/30/23, there were 30 active/coming-soon listings on the market, and 8 reported sales so far in 2023: 3 in Atherton, 2 each in San Francisco and Woodside, and 1 in the City of Monterey. There is 1 listing pending sale in Carmel.
  • The number of price reductions typically ebbs and flows by season, but can also be affected by specific events in the economy and the market. It’s not unusual for price reductions to peak in October before the midwinter holiday slowdown begins in mid-November.
  • The number of new housing units permitted in San Francisco crashed in the spring of 2023.
  • We are happy to update you on market parameters for any property. Call us anytime.
  • We can help you seek and find your opportunities. Contact us anytime to review your plans and needs.
  We are happy to assist you as well as your family & friends with their real estate needs – in our local market, across the country, or internationally – feel free to forward our newsletters or introduce us via email to anyone you know. Our network is extensive, and we are happy to provide free property evaluations to review your options when considering a sale.   Are you wondering about the market? We know the market – and how best to navigate through it – What questions are on your mind? Call or email us anytime.   We Love What We Do – We can help you find opportunities in this market – Let us hear from you.   Warm Regards,   Callista & RicRoc

Ric Rocchiccioli

San Francisco Bay Area

DRE 01017500
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