Buying a house in San Francisco this past year demanded deep pockets, as the average price for the 674 houses sold was $1,513,641. Most notably, 59% of sales clocked in at more than $1M. That means buyers and their agents seeking homes in the sub-$1M range were the ones bemoaning the lack of inventory.
The luxury market ($2M+) didn’t get a breather, either, with 19% of sales closing in this range.
Cash buyers weren’t shy, accounting for about a quarter of house sales.
Buyers overbid for 80% of all the houses sold, so the “list low, sell higher” sale pattern remained the same as it had throughout 2014. There were five single-family homes that sold for almost 50% or more of list price; unsurprisingly, those properties were in neighborhoods that commonly experience uber overbids like the Inner Sunset, Noe Valley, and Bernal Heights. One buyer decided to fork over 200% more than list price on a fixer in Potrero listed for $849,000. (My guess is that no one on the seller side thought anyone would be willing to pay $1,750,000 in cash for the house. What a nice holiday surprise!)
Condo Market: Surpassing $1M Average, New Construction Booms
The condo market finished out 2016 in grand fashion, with an average fourth-quarter condo price of $1.2M. A total of 663 units changed hands in that timeframe, with about half of those sales clocking in at more than $1M. Again, buyers looking for that one- or two-bedroom unit for under $1M experienced a severe lack of inventory.
One difference between the house and condo markets was that only six percent of Q4 condo sales were in the $2M+ range. The luxury market definitely had its limitations in the last quarter.
The selling pattern mirrored that of the house market, though, with 85% of condo sales closing for above the list price. And again, a quarter of all units were paid in cash.
San Francisco’s new construction boom boosted the condo market, with large projects in desirable locations selling out in record time. Among the more notable developments were Mission Bay’s 267-unit Arden, which is still under construction (prices are in the $760-$1,043/sq foot range). The 115-unit Linea on Market at Buchanan ($1,025-$1,200/sq foot) was a huge success, and Russian Hill’s Marlow saw buyers snap up its 98 condos for $1,015-$1,100/sq foot.
Developers aren’t slowing down in the foreseeable future, with 50,000 units reportedly in the pipeline.