San Francisco Real Estate Forecast and Update – June 2017
San Francisco Real Estate Forecast
Sales Conditions Throughout the Bay Area
In this month’s San Francisco Real Estate Forecast and Update, we will explore why property values in San Francisco have increased since the beginning of 2017. In the past five years, the San Francisco real estate market saw many record breaking sales in all parts of the city. As a result, a large portion of buyers were priced out of San Francisco and settled in cities like Oakland, El Cerrito, San Rafael and San Mateo. As the region matures, the Bay Area becomes more interconnected as tech companies follow suit and as people move to and from urban and suburban areas. Because of this, I like to see prices in the region as a whole to compare the San Francisco market with neighboring counties that have hot real estate markets. It appears that home prices in several outlying cities have plateaued, in my opinion, simply because housing has become unaffordable. In the last month, many of our surrounding counties saw a median price decrease from April to May 2017. However, San Francisco saw a percent increase of 7.1% in only one month. Despite a slowdown in sales, we are continuing to see robust pricing into mid-2017. Despite Oakland’s cool, edgy scene, or Albany’s stellar school district, the city is still considered a highly desirable place to live and people will pay what it takes to live here.
From an agent’s perspective, this is interesting because despite a modest number of closings, prices continue to increase. Low resale inventory and continued high demand are contributing factors. With that said, recent condo resales in South Beach and Rincon Hill saw a sustained sale price uptick over the few months.
By the way, there is a distinct difference between resales and new sales. Price per square foot is remarkably higher for new home sales and buyers recognize this price disparity. A takeway from this San Francisco real estate forecast: expect resale inventory to replenish as this wave of new inventory sells out. But remember, with more residential developments in the pike, this could be your window of opportunity to sell high before trends turn the corner again.
The New Home Sales Buyer Market
A constant healthy dose of new condo inventory is available, despite consistent unit sales. New home sales agents have started to introduce new construction listings to MLS for more public exposure. Why does this matter? The supply of new condos exceeds demand, creating ideal conditions for a buyer’s market in the new home sales sector. If you’re interested in investing, call me to represent your transaction and to discuss incentives. There is room for negotiation in new home sales.