Quick Take:
- Last month we saw a big upward swing in median sale prices for single-family homes in San Francisco
- Inventory continues to be one of the largest issues facing the San Francisco housing market.
- Listings continue to be sold at faster and faster rates.
Median sale prices for single-family homes jumped by more than 7% in September
Last month, we saw a big move upward in terms of median sale price for single-family homes in the San Francisco area. The median listing sold for 7.76% more than it did around this time last year, which marks the largest increase in this particular market that weโve seen all year. When we turn to the condo market, median sale prices decreased by 3.29%. However, it is important to note that the average condo is now selling for a slight premium to the original listing prices, which is a phenomenon that we havenโt seen since May.
Inventories continue to lag last year’s numbers by more than 30%
Inventory issues have been plaguing San Francisco for several years, as the number of active listings slowly dwindles. Unfortunately, nothing changed this month, as single-family home inventories are down 33.65% on a year-over-year basis, and condo inventories are down by 32.22% on a year-over-year basis. This was driven by the fact that fewer new listings are hitting the market, with 7.61% fewer new condo listings and 11.26% fewer new single-family home listings, and compounded by the fact that there were 51.82% more condos and 19.33% more single-family homes sold.
As inventories shrink, homes are sold off incredibly quickly
As you might expect, when inventories shrink, the market becomes much more competitive, which is certainly the dynamic that we are watching play out in San Francisco. The average single-family home is spending just 13 days on the market, representing a 7.14% year-over-year decrease. By the same token, the average condo listing is spending just 25 days on the market, representing a 28.57% year-over-year decrease and a 50.98% month-over-month decrease.
The condo market creeps closer to becoming a seller’s market
When determining whether a market is a buyersโ market or a sellersโ 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 sellerโs market, whereas markets with more than three months of MSI are considered buyersโ markets.
While the single-family home market has been a heavily entrenched seller’s market for quite some time (and it still is, with just 1.5 months of inventory on the market), the condo market has traditionally been more buyer-friendly. However, itโs been creeping closer toward being a seller’s market as of late, with the condo market reporting just 3.2 months’ worth of active inventory on the market in September.
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