The City View: June Update
As we enter the summer months, our market slows down considerably. Although this is a seasonal trend with people traveling, typically this activity decline really starts in July. We have seen the decrease of homes in contract start earlier this year. This is due to the combination of less inventory and a slight dip in demand. When there is uncertainty in the world, economic, political or the fear of war, people tend not to focus on buying a home. We believe San Francisco is heading in the right direction. The stock market remains strong and a lot of new money is coming to the City in innovative AI business. Our fall market will be strong, we just have to wait out this summer.
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 sellers’ market, whereas markets with more than three months of MSI are considered buyers’ markets.
In San Francisco, the single-family home market has been a sellers’ market and the condo market has been a buyers’ market for quite some time. Although this month is no different, we did see some year-over-year declines in the number of months of supply on the market. The single-family home supply declined by 14.29% to 1.8 months worth of inventory, and the condo market declined by 22.45% to 3.8 months of inventory.
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