November San Francisco Real Estate Insider

With the election in the rear view mirror and Thanksgiving just ahead, we should expect to see a strong market with a short runway.

People are tired. Plain and simple. Everyone is juggling work, family and everything in-between. I believe we are going to see a lot of aggressive sales in the next month with motivated sellers and opportunistic buyers. Sellers looking to get their sale in the books for tax purposes as well as not wanting to risk an unknown '21 market are usually looking to deal. But, even with all that momentum, the market will most likely start to slow down by early December.

As I referenced last month, the house and condo markets have been affected differently by the pandemic. This year, the pandemic upended seasonality: spring is usually the strongest selling season, but this year we saw a crash in activity. Summer typically slows down (especially for luxury home sales) but we had high demand and the summer market accelerated into autumn. But supply has been accelerating even faster than demand.

General City Dynamics; House & Condo

The post pandemic rebound in activity has pushed house sales higher than in recent years while leaving condo, co-op and TIC sales lagging. But within that segment (condo, co-op, TIC) the details of where the sales occur - or not, are more of the story (detailed below).

The most dramatic change is the increase in the number of listings for sale. Condo, co-op and TIC listings in MLS are at their highest point ever, approximately 85% higher than one year ago. House listings are also up, but much less dramatically at about 20% to 25% higher than the same time last year.

Luxury Home Sales by Property Type & Price Segment

Of the luxury home segments broken out in the chart below, the market for houses selling for $3,000,000 to $4,999,999 (red line) has rebounded very strong over the past six months, hitting a new peak in sales (on a six-month rolling basis). The other segments - luxury condos and co-ops, and $5m+ houses - have seen much smaller rebounds from shelter-in-place lows, and remain far below previous peaks. 

Single Family House Market by District/Neighborhood

Within the city, there are significant differences in market dynamics by location. This report will look first at the single family markets, followed by a series of analyses on condo markets. How these charts apply to your home can be viewed as "general." If you want a specific comparison, just ask me and we'll get a CMA put together on your home.

What is the hottest neighborhood in San Francisco for activity? By most standard measurements, the greater Sunset/Parkside district is it. We have a lot of buyers exiting community living and they are in need of an entry level single family home in a safe neighborhood. If you are looking to get into the Sunset/Parkside at less than $1.3M, its going to be a total fixer.

At the softer end of dynamics are two of the city's most expensive districts, which feature the largest luxury house segments.

Overbidding on houses is down from the crazed levels of recent years, but is still relatively common in more affordable districts. Some part of the overbidding percentages is caused by strategic underpricing of listings to get more buyers interested (and hence, drive up the price).

Below is breakdown of single family house sales, $3 million and above, by district over the past 12 months.

San Francisco Condo Markets by District/Neighborhood 

As referenced above, the condo market has been weakened since the pandemic hit. The softest condo markets have been those dominated by larger complexes and high-rises. The greater South Beach/ SoMa/ Mission Bay (largest condo market in SF) has the weakest supply and demand dynamic. But, over the last two weeks we've seen an uptick in activity. Was the bottom realized? Nobody knows for sure but there have been some very good values that obviously lured buyers to make a move.

The neighborhood condo market (smaller buildings, separate unit entrances, outdoor spaces, etc.) have continued to see good buyer demand. Several of my neighborhood condo buyers were recently in multiple offer situations as the best condos always command the most interest. Neighborhood condos with some blemishes and bruises (and not priced as such) are going to get butchered. This creates a great opportunity for some, especially so the later we get in the year.