Clients, friends, and colleagues:
As we enter 2024, I have a strong sense of optimism (grounded in data, of course) that we will see a stronger real estate market than 2023.
In the last 2 months we've seen the 30-yr fixed drop from nearly 8% down to 6.61% (I just had a client close under 6.5%, and another client recently get into contract for 6.5% with no points). With the fall in inflation this past year, the Fed is widely expected to begin dropping its benchmark rate. The consensus forecast among analysts is for further declines in mortgage rates.
The Nasdaq is up 35% in the last year; S&P is up 20%. These indexes play a major role in bay area wealth.
The 2023 market was characterized by a flurry of negatives for SF real estate: high interest rates, financial market uncertainty, negative media "doom loop" narratives (that were terribly overdone), social/economic issues pertaining to the downtown district, and a low supply of new listings in most neighborhoods - generally much lower for houses than for condos. Total sales volume plunged, while for many prospective sellers, the motivation to move was reduced by the mortgage lock-in effect.
With interest rates falling, the media coverage turning more positive, several commercial buildings trading hands, AI companies expanding in downtown, and economic conditions and consumer confidence rebounding, the direction is trending positive for San Francisco real estate.
For any questions (specific property, neighborhood, etc), feel free to reply to this e-mail. I'm always happy to help.
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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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