Tag Archives: real estate market

Prices Jumping – Yet Again – Across San Francisco

The San Francisco real estate market grew increasingly frenzied as the first quarter of 2014 progressed, leading to another surge in home prices in virtually every neighborhood in the city. The high-demand/ extremely-low-inventory/ competitive-bidding situation is similar to what occurred first in spring 2012 and then, to an even higher degree, in spring 2013. After the market seemed to stabilize in the second half of last year, we didn’t expect to see it turn this fierce in early 2014, but right now it appears to be every bit as ferocious as last spring’s.

Of major metro areas, the new Gallup-Healthways survey ranked SF-Oakland second in the nation (behind San Jose-Santa Clara) on their index for “well-being.” Though already the second most densely populated city in the country (after NYC), San Francisco simply has many more people wanting to live here than there are homes available to rent or buy.

Sales over Asking Price
The heated competition for new listings coming on market has resulted in an astounding percentage of sales occurring above, and often far above, list price.

This chart below breaks down, by neighborhood, the average sales price to list price percentage for the 90% of homes selling without price reductions. Of the areas assessed, Bernal Heights came out on top with sales prices averaging an incredible 21% over list prices over the past 2 months.



Median Sales Price Spikes
Typically, the first quarter of the year does not show a dramatic increase in median sales prices over the previous quarter – in fact, a decline is not unusual due to holiday market dynamics. But the first quarter of 2014 saw large spikes in median prices for both single family homes (houses) and, especially, condos in San Francisco.
Continue reading Prices Jumping – Yet Again – Across San Francisco

Possible Shift In San Francisco Real Estate Market? Should You Sell Your Home Now?

February 2014 San Francisco Market Report

It is far too early in the year to reach definitive conclusions regarding substantive changes in the market, but there are indications of a number of shifts. From the hurly burly on the street, the word is that the quantity of offers coming in on new listings is declining. Where a new listing might have attracted 10 or 12 offers last spring, 3 or 4 are coming in now; where 3 or 4 offers would have arrived, the seller is getting 1. And, according to Broker Metrics, for every 2 listings that offers in December and January, another listing expired or was withdrawn without selling.

The amount of competition deeply affects home price increases.

There are still a very large number of buyers looking at listings online and at open houses. But more of them appear to be first-time buyers and they are proceeding more cautiously. Some buyers are burned out on the multiple-offer bidding frenzies of last year and are reluctant to participate in them. Though the market remains hot by any reasonable standard, by some statistical measures it is cooling. This may reflect a transition or only a lull before the spring sales season begins.

Recently, the investment-property analysis firm Reis speculated that SF apartment-rent growth — which has been extraordinary by any measure, especially in a period of low inflation — will slow despite intense demand and very low vacancy rates, simply because people can’t pay any more. It’s an idea which may or may not be correct or apply to other types of housing costs. Rent rates do play a role in purchase prices as buyers often compare the net housing costs of the two options.

Median Sales Price Appreciation by Neighborhood

In San Francisco, some of the most affluent neighborhoods — such as the Pacific Heights-Marina district and the Noe, Eureka and Cole Valleys district — started their recoveries in the second half of 2011, well before virtually every place else in the city or country. When 2012 began, prices in these districts soared, while other areas played catch up. In 2013, that dynamic flipped: Appreciation rates in comparatively less expensive neighborhoods surged, while slowing in the most affluent areas.

A big part of this is simple affordability: Priced out in one neighborhood (or city), buyers focused on others, similar in ambiance but less costly. Home prices there looked so good in comparison that buyers were willing to bid them up. The huge decline of distressed sales in areas severely affected, such as in Bayview, has had an outsized effect on median sales prices there. Continuing gentrification, as in the Mission, and increasing “luxury” condo construction in less affluent areas have also played parts in this trend. It’s not as if demand plunged in the Pacific Heights-Marina district (or Noe Valley, for that matter). Quite the contrary: its 9% appreciation rate in 2013 translated into the city’s largest median price increase in dollar terms ($300,000). However, in the previous year, this district saw year over year median price appreciation of 25%.

Note that median price appreciation does not perfectly correlate to changes in home values, as it can be affected by a variety of market factors. It does give an approximate sense of market trends.
Continue reading Possible Shift In San Francisco Real Estate Market? Should You Sell Your Home Now?

Even With San Francisco Market Near A Peak, Many Expect More Growth Ahead

With all the talk of bubble this, bubble that (did you cast your vote?), which I do not think we’re in, I thought it important to share a little report from the Goliath, National Association of Realtors.

medianpriceexpectation

REALTORS® generally expect a modest increase in prices in the next 12 months , with the median expected price change at about 4 percent. This is based on responses gathered from the August-October 2013 REALTORS® Confidence Index Survey. About 3,000 REALTORS ® respondents answer the survey each month. See the October report at http://www.realtor.org/reports/realtors-confidence-index.

The graph above shows the median expected price change across the states which are grouped into those with “low”, “middle” and “high” price expectations. States in the West and in the South expect the highest price increase in the range of about 4-8 percent. Tight inventory continues to bolster prices in these areas.

-Expected Price Growth Strongest In West And South Markets [Realtor.org]

Chief Economist And Forecasters For C.A.R. Say Market Rising…And [Likely] Falling

Herein lies the problem with reporting on real estate: Everybody has their opinion on what the market is doing, but nobody knows for sure. Case in point, just yesterday we posted “San Francisco housing market continues to show promising signs of recovery”. We posted that from information obtained from the San Francisco Association of Realtors, and if you read the whole thing, they basically say all is good, the market is rising, but watch out because there is potential doom on the horizon that could sour the sauce.

It’s no mystery San Francisco’s market performs differently than most markets in California, but check this out:

[For California] distressed sales will account for nearly one-third of sales, inventory will be relatively lean, and the state’s median home prices are forecasted to reach $280,000 in 2010 [that's up from $271,000], according to C.A.R and Vice President and Chief Economist Leslie Appleton-Young.

In addition, she noted, ‘Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.’

In 2010, agents should see the low-end market attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end [that'd be almost ALL of San Francisco], however, will continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed [So you see, they don't know where prices are headed...nobody does].

‘Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year,’ she said.

They should all be politicians! The market is going up…but wait, if that laundry list of likely scenarios comes to fruition, it could also go down. No sh*t! Thanks for pointing that out.

-C.A.R Forecast 2010

Ask Us: Why The Fuss About Noe Valley?

Where readers ask, and we (the community) try to answer:

The Front Steps really concentrates on Noe. I live in Noe and understand the attraction and the desirability of neighborhood but I’m not exactly sure why it is the barometer for everywhere else. Can you shed any light on this?

Good question. It’s not that we set out to focus on Noe, in fact we think focusing on an area that is much more hip (like Mission, Dog Patch, or NoPa) would serve our readers better and certainly be a helluva lot more fun, but looking at the real estate in Noe Valley is a very good barometer for the well being of the entire city’s real estate market, because it is considered an A+ location with generally financially and employment secure residents. Noe Valley is one of the most desirable and popular areas to live in San Francisco, and if the market in Noe Valley crashes, the rest of the city should watch out. SOMA is tanking as we speak, but it has nothing to do with Noe Valley. It is a totally different market.

As you’ve also likely noticed, a lot of the content we post comes in as “tips” from readers and our readers that send tips must be a bit more concerned with Noe. So feel free to tell your friends that live in other nabes to check us out and send in tips about their hood as well. It doesn’t have to be about real estate, but it does have to be about San Francisco (or at least the greater Bay Area.)

Thanks for reading!