Last May inventory showed a very positive bounce off the lows in 2015 which capped five years of steady decline. Many of us thought this might be the beginning of a steady increase. However, this year we see a decline in inventory across all five of the categories we survey*.
The New York times recently published an article that may partially explain continued low inventory, "Real Estate’s New Normal: Homeowners Staying Put" that shows home ownership tenure has been climbing for the last 15 years starting roughly at the beginning of the last recession.
Although their data represents a national survey and we know from experience the San Francisco doesn't always follow national trends, in this case they've identified at least one contributing factor that seems to apply here which is also supported by local anecdotal experience. We hear from potential home sellers all the time "if I sell where do I go?" For most people the only answer to that question is "away from the Bay area.
*The five categories of single family homes (2 bed/1 bath; 3 bed/2 bath) and condos/TICs (1 bed/1bath; 2 bed, 1 bath; and 2 bed/2 bath) represent approximately 60% of listings in the San Francisco MLS.