Sales results in
San Francisco for the first quarter of 2012 is one of the strongest starts since the height of
our Real Estate Market back in 2006-7.
And, after two consecutive years of year-over-year growth in the number of sales, it appears
that 2012 could be the third year in a row -- which most analysts consider to be a trend.
The explosion in demand which started in February caught almost everyone by surprise and has continued through March and the first part of April. Inventory which normally begins to build in February and March has failed to keep up with the unprecedented buyer demand and the resulting shortage of inventory has driven multiple offer situations and, ultimately, prices.
Looking at the current active listings for single family homes and condos/TIC illustrates just what buyers are facing. Of the 1,790+ listings as of today, 438 of them are under contract having been on the Market for less then 2 weeks (they still have conditions remaining and some may well fall out of contract). 502 are "pending" (no contingencies remain). This leave only about 740 listings for buyers to select among. This is less than 2 months of inventory, a far cry from what we hear about in many other markets around the country where 6-12 months is more the norm!
If one studies certain categories of residential property and compares the highest average selling prices which were reached in 2006-7 to the average selling prices in the first quarter of 2012, it becomes rather revealing! One of the largest declines in average selling prices was for 2bed/1bath single family homes, generally considered to be an entry-level home purchase. Having reached an average high in 2007 of $755,000 and fallen to an average price of $536,000 in the First Quarter of 2012, a decline of about 29%. On the other hand average selling prices for 1bed/1bath condos in 2007 reached $697,000, compared to first quarter 2012 at $631,000 a decline of only about 9%. If our Market continues to have low inventory and high demand, one would logically expect for almost every category of property in
will regain value, probably an additional 10-12% by year’s end.