Prices Flatten, Market Shifts in San Francisco

We’re smack in the middle of the Fall real estate season, one of the two busiest times of the year for buying and selling homes. (The other is April through June.) Word on the street over the July and August months was that the market had cooled down. But we weren’t sure if it was the typical summer slowdown, or the start of a downturn of sorts.

A month into the Fall, I can say that the market is definitely changing. Though prices seem to be holding up, I’m seeing various shifts in buyer behavior. Here’s what my colleagues and I are experiencing:

Prices are flattening. The average prices for a single-family home and condo in the first quarter of 2018 were $1,953,030 and $1,309,943, respectively. But a look at the third quarter’s numbers shows a dip in these citywide averages—$1,889,775 for a house, and $1,280,620 for condos. Of course, San Francisco is very neighborhood-centric when it comes to prices, and there are certain very popular areas that have actually increased in price over the past year. But this general trend is worth noting as we head into 2019.

Fewer offers on homes that don’t check all the boxes. Buyers are shying away from homes that don’t meet all their criteria. And if a property is in a more remote area, far from transportation or a good retail area, it will probably spend a bit of time on the market. Sellers need to be super careful about their list prices, and should be looking at a range of comps (not just the high-flying ones from last Spring).

Some buyers are delaying their purchases. I’ve spoken with one or two prospects who have decided that they’re going to see where the market is in 2019 before they get serious about buying. The consensus is that prices are going to drop because interest rates are on the upswing, among other reasons. The other half of the equation, however, is that we have a very limited supply for the demand. And if prices indeed drop, there will undoubtedly be a bunch of homeowners who will decide to hold off on selling until prices go up.

I’m expecting to see a strong finish to 2018, with a steady volume between now and the end of the year. The market is still very competitive, and I won’t be surprised to hear anecdotes about crazy overbids on hot houses and buyers paying hundreds of thousands of dollars over asking for single-family homes in popular neighborhoods. I also don’t see inventory slowing down until we get closer to Christmas.

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Get in touch:

Eileen Bermingham

Corcoran Global Living

415.823.4656

eileen@insidesfre.com

DRE# 01352627

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