2022: April San Francisco Real Estate Insider

As we enter the second quarter I am starting to see a slight shift in the marketplace. With the increase in interest rates coupled with lacking consumer confidence, buyer enthusiasm in starting to taper.  Buyers are so fatigued by competition and “losing out” that they are starting to pull out of the market or reduce their purchasing budget. I’m starting to see on a listing by listing basis, offer dates that are not producing the expected number of offers. With further interest rate increases planned for later this year, could this be the beginning of a bigger market shift? We'll see. I expect the market to shift to more of a "quality vs. quantity" in terms of buyers and the interest on available, quality properties. I don't see any indicator that would lead one to assume that prices will drop (but the 21% average overbid on homes will likely come down; see the chart below).

Below are the latest house and condo median pricing as well as a few other data points of note.

The sale to list price difference continues to climb; especially on single family homes. I'd expect this to come down as we move through the rest of the year.

Mortgage rates are still on the rise. I think we can expect to see 6% on the 30 year fixed by year end. Buyers should take a look at ARM's as the bond yield curve is inverted (and that is generating some attractive rates).