Decline in Residential Sales?

Total residential sales (single family homes, condos, TICs, co-ops) in San Francisco as reported by the MLS declined in 2016, the third consecutive year of such declines.

The percentage reduction from the peak of the recovery in 2013 to 2016 is about 16%.  From the height of the real estate market just before the mortgage meltdown and subsequent recession the drop was more than 25%.

Since we haven't had a financial collapse recently we need to look for other reasons to understand the decline.  In no particular order here are some possible explanations:

1. The pent up demand from the recession has worked its way through the market;
2. There is a large number of new construction condos that have come on the market in the last several years.  (Most new construction condos do not appear in the MLS and are not included in the sales totals above).