The City View: July Update
Hope everyone is having a nice summer, and staying warm in what has been one of the coldest summers in history. I am very excited for our Indian Summer that usually starts in September, both for warmer weather and more inventory. San Francisco's home inventory usually drops significantly over the summer as buyers tend to be away, and sellers want to expose their properties to the most people. This summer feels like fewer homes are on the market than normal, with very little to show clients at all price points. Usually new inventory starts trickling in mid August and a heavier inlux starts to happen after Labor day. Demand remains strong, so we are hoping for a busy fall when those looking finally have more options from which to use. With possible interest rate reductions, more inventory, these artificially higher prices may fall benefiting the buyer. If this influx of inventory does not occur, we could see prices continue to rise.
When determining whether a market is a buyers’ market or a sellers’ market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller’s market, whereas markets with more than three months of MSI are considered buyers’ markets.
The single-family home market in San Francisco has been dominated by sellers for quite some time, and that did not change in the month of June, with the area having just 1.5 months' worth of inventory on the market. In the condo market, buyers are slowly losing their bargaining power as inventory levels slowly dwindle away over time. However, there’s still some room to negotiate in the condo market, with 3.5 months of supply listed for sale.
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