Clients, friends, and colleagues:
Before we dive into the housing numbers, a quick tid-bit from the NYT:
"The tech industry in San Francisco is more than a year into its worst slump in a decade with layoffs, a glut of empty offices, waves of migration to places with lower taxes, and worsening problems with drugs, housing and crime. But such busts are almost always followed by another boom. And with the latest wave of A.I. technology - known as generative A.I. - there's too much at stake to miss out."
The latest wave of technology, generative AI, is slowly creating a boomerang for tech workers to come back to San Francisco. Investors have already announced $10.7 billion in funding for generative AI start-ups within the first 3 months of 2023, representing a 1,300% increase from the same time last year.
I've heard the above from both current clients and friends in the tech industry. The access to capital, ingenuity, and talent remains seemingly unmatched in San Francisco for start-ups.
OK, now let's dive into the numbers. The trend of 2023 carries on: Median sales prices continue their recovery from mid-winter lows (Q4 2022), though prices remain far below the inflated peak prices we hit in Spring 2022.
The single-family market continues to be substantially stronger than the condo market, and the condo market in Downtown/SoMa/Civic Center areas - affected by a number of economic and social factors - is considerably weaker than condo markets in the rest of the city.
Median sales price (single-family) in SF:
February 2023: $1,500,000
The number of new listings coming on market and the number of home sales over the past 12 months were the lowest since the plunge from the pandemic. New listing and sales volumes have risen from their nadirs in mid-winter, but remain historically low. Average days on market dropped considerably in 2023 as buyer demand recovered, and the percentage of home sales closing over asking price increased. The average house sale is now, once again, selling well above its original asking price. The average condo is selling slightly below list price.
Luxury home sales remain well down from peaks seen at the height of the pandemic boom, but significantly up from late 2022.
With bank crises, fed actions, inflation readings, and U.S. debt-default fears, interest rates have been volatile in 2023, with significant ups and downs. As of early June, 30-year fixed-rate mortgages are running about a quarter percent below 7%.
The 1st and 4th largest insurers of CA homes, State Farm and Allstate, have announced they will no longer write new policies in the state due to rising claim costs. It is too early to quantify the exact financial, political, and market effects of their actions, or if other insurers will follow suit. Similar issues have come up in other states, such as Florida and Louisiana, and it occurred with earthquake insurance in CA in the mid-1990s, leading to the creation of CA Earthquake Authority.
As always, reach out with any questions. I'm always happy to help you in optimizing your real estate goals, and am never too busy for your referrals!
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Statistics are generalities, essentially summaries of widely disparate data generated by dozens, hundreds or thousands of unique, individual sales occurring within different time periods. They are best seen not as precise measurements, but as broad, comparative indicators, with reasonable margins of error. Anomalous fluctuations in statistics are not uncommon, especially in smaller, expensive market segments. Last period data should be considered estimates that may change with late-reported data. Different analytics programs sometimes define statistics - such as "active listings," "days on market," and "months supply of inventory" - differently: what is most meaningful are not specific calculations but the trends they illustrate. Most listing and sales data derives from the local or regional multi-listing service (MLS) of the area specified in the analysis, but not all listings or sales are reported to MLS and these won't be reflected in the data. "Homes" signifies real-property, single-household housing units: houses, condos, co-ops, townhouses, duets and TICs (but not mobile homes), as applicable to each market. City/town names refer specifically to the named cities and towns, or their MLS areas, unless otherwise delineated. Multicounty metro areas will be specified as such. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers to be considered approximate.
Many aspects of value cannot be adequately reflected in median and average statistics: curb appeal, age, condition, amenities, views, lot size, quality of outdoor space, "bonus" rooms, additional parking, quality of location within the neighborhood, and so on. How any of these statistics apply to any particular home is unknown without a specific comparative market analysis.
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Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.
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