The City View: September Update
We haven't seen a bolstering market like this in years. The biggest underlying factor influencing price, and our market in general, is supply and demand. The reason for this bull market is demand has increased tremendously with AI money coming into SF, new enthusiasm about our city and decreasing interest rates. When you combine this increased demand with the fact that there are 23% fewer condos and houses on the market compared to the same week last year, prices can only go in one direction. The thing is, we don't see this as temporary. We think we will see increased prices (maybe not on a linear path) over the next couple of years. Interest rates are only going to fall more in the coming months to years, and as soon as we see 4%'s, that will open up a flood gate of buyers who have been sitting on the sidelines. Sale prices on single family homes are setting new peaks. Homes are getting multiple offers again. Is this the start of a bubble? Probably, but the balloon is only just starting to be inflated!
The downtrend continues for inventories in San Francisco
The inventory problem is nothing new in San Francisco. While many other counties saw ballooning inventories throughout the spring and early summer, inventories in San Francisco continued their decline. This trend continued in August, with the single-family home market recording 17.51% fewer active listings on a year-over-year basis, and the condo market recording 22.69% fewer active listings. This trend continues to be concerning, but unfortunately, there’s no end in sight!
Despite incredibly low inventories, condos still take some time to sell
While you might assume that lower inventories mean that listings are spending less time on the market, you’d only be partially right when we look at San Francisco. The average single-family home is being scooped up incredibly quickly, spending just 15 days on the market. However, when we turn to the condo market, the average condo is spending 50 days on the market, representing a 6.38% increase year-over-year.
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