Quick Take:
- Homes in the San Francisco area continue to sell within their historical average range.
- Lack of inventory remains a huge issue throughout San Francisco.
- Despite inventory being an issue, condos are still sitting on the market for quite some time.
Home values in San Francisco are “business as usual”
Although inventories have been steadily declining over time, median sales prices have stayed pretty consistent with a “band” in both the single-family home market and the condo market. While we did see the median sale price for condos in San Francisco decrease by 11.92% on a year-over-year basis, this can largely be attributed to the volatility in this metric. When we turn to the single-family home market, we saw a slight tick up of 2.34% in terms of median sale prices.
The inventory issue doesn’t look like it will be solved anytime soon
While much of the Bay Area is experiencing inventory issues, the vast majority of areas are seeing inventories begin to pile up. As we know, San Francisco has the opposite problem; the area can’t seem to keep enough inventory on the market. This trend has continued in July, with 15.93% less single-family inventory on a year-over-year basis and 19.91% less condo inventory. This is largely due to the fact that fewer new listings are hitting the market each month. On a year-over-year basis, the single-family home market saw 18.46% fewer new listings in July, and the condo market saw 5.09% fewer new listings.
Condos continue to sit on the market, while single-family homes are snapped up
With the inventory issues that San Francisco is experiencing, you’d probably expect both condos and single-family homes to move very quickly. While single-family homes are moving incredibly quickly, with the average listing sitting on the market for just 14 days, the average condo is sitting on the market for much longer. In July, the average condo took 44 days to sell, representing a 12.82% increase on a year-over-year basis. This is certainly an interesting phenomenon. However, it’s nothing new in this market, as condos have always taken a bit longer to sell than single-family homes.
The condo market becomes a more balanced market
When determining whether a market is a buyers’ market or a sellers’ market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller’s market, whereas markets with more than three months of MSI are considered buyer’s markets.
As inventories have been dwindling away over the course of the past few years, the condo market has steadily inched its way away from being a buyer’s market. With just 3.1 months’ worth of inventory on the market, the condo market looks like it might be a buyer’s market within just a month or two. Additionally, when it comes to the single-family market, it continues to be a seller’s market, with just 1.2 months’ worth of supply available for sale.
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