San Francisco Market Report for Luxury Condos – Quarter 2 2017
This quarter’s San Francisco Market Report for Luxury Condos observes citywide condo trends, Transbay luxury highrises and new construction to give you a fresh perspective on the changing landscape of the city’s housing stock. It’s reassuring to see that the city is working on developing new homes, but new inventory does affect certain markets and price points.
Second-quarter housing market activity in San Francisco was characterized by heightened buyer activity amid declining inventory conditions. There was a 5.3% decrease in condo inventory from Quarter 1 to Quarter 2. These combined forces led to higher absorption rates, bringing the supply of homes for sale to a two-year low. Strong buyer activity also led to diminished days on market, an average of 41 days, across all price ranges. The median price remained the same from Q2 2016-Q2 2017 and condos resales saw an all time high at an average $/sq. ft of $1,067.
Price appreciation for new condominiums remained constrained in San Francisco neighborhoods where much construction has occurred, such as the developing Transbay area. 2,762 units was or is currently being added to the San Francisco Housing inventory, reflecting a supply boost. Pricing virtually unchanged for condo resales from Q2 2016 to Q2 2017, recorrecting from the brief slowdown earlier this year. We did see slow price growth present in the second quarter than in prior months and especially between new home sales rollouts. So, condo resales are still very well in demand. As new condo inventory sells out in the 1 and 2 bedroom sector, expect resale prices to increase. Several new condo buildings are over 90% full, so there is another window for resale price appreciation before another big release. We are expecting another 1,509 new condo units in 2018.
Transbay Overbids Data
There was a mixture of both 1 bedrooms and 2 bedrooms, again, that received the highest overbids in the Transbay area. The average price per square foot for these overbids came to about $1,200 sq.ft.
Transbay Underbids Data
Don’t be fooled by the price beatdowns in this underbid segment. The average price per square foot for these sales worked out to about $1,523.
Looking Forward: Although we expect third-quarter sales to reflect a mild seasonal lull, the Bay Area’s reliable and impressive core economic drivers should continue to fuel demand for San Francisco real estate. And despite mortgage interest rates that remain historically low, the possibility of increases may motivate some homebuyers who have been sitting on the fence.
Sign Up for 2017’s Mid-Year Luxury Condo Building Report
Madrone’s market is strong, with several sales averaging at $1,100/sq.ft. Do you own in a highrise? Sign up below for a complimentary and comprehensive mid-year e-book and report on Transbay’s luxury condo buildings.
