First six months 2022 vs 2021

The number of San Francisco residential closed sales, including single family homes and condos/TICs, for the first six months of 2022 are down 17% compared to the first six months of last year (2021).  Single family homes are down by 11% and condos/TICs are down by 22%

Reviewing the five configurations we survey monthly 2/1 (bedrooms/bathrooms) and 3/2 single family homes had an increase of 7% for 2/1s and a 4% decrease.  Of the 1/1, 2/1 and 2/2 condos/TICs it’s quite a different story.  1/1s are down 23%, 2/1s are down 36% and 2/2s are down 16%.

At the same time the average selling price shows an increase in all five categories we survey.  2/1 single family homes are up 6%, 3/2 single family homes are up 10%.  For all single family homes regardless of configuration that closed in the first six months are up 1% on average.  Condos/TICs also saw increases in average selling prices for every configuration we survey, 1/1, 2/1 and 2/2 increased by 2%, 2% and 5% respectively.

Inventory continues to increase as is normal for this time of year.  There is approximately 5 weeks of single family homes currently available and 11 weeks for condos/TICs. 

These statistics are based on MLS listings.  New construction units are generally not included (except for sample units) so available inventory of condos is more likely to be in the 3-4 month range.

In our 24 years of keeping stats on SF real estate there has never been this high a number of available condo/TIC units.

Reviewing First Five Months of 2022

The number of San Francisco residential closed sales through May 31 of this year shows a decline of 15% with single family homes down 7% and condos/TICs down 19% when compared to the first five months 2021.  (2021 was the best year for total sales since 2004).

Demand for single family homes remains strong and average selling prices remain at historic highs for 2bed/1bath and 3bed/2bath configurations we survey monthly.  In the last three months each configuration has shown a decline in the average selling prices – 2/1s by 5% and 3/2s by 12%.

For the three configurations we survey of condos/TICs, 1/1s are down 9%, 2/1s down 7% and 2/2s down 9% over the last three months.

As of 6/6/22 there is approx. 6 weeks of available inventory for all single family homes and about 11 weeks for all condos/TICs.

Much of the decline in selling prices could be anticipated given the number of available properties.  For example, our condo/TIC inventory has reached about 11 weeks which does not include new construction inventory which is not usually listed in the MLS.

However, average sales prices for single family homes become less predictable even as the inventory increases.  It could be the decline in average selling prices may be the result of rising interest rates or, perhaps, buyers’ agents are advising against making aggressive offers.

34% of single family homes that closed this year through 5/31/22 sold at or above $2.5 million.  4% closed at or below $1 million.  15% of the condo/TICs closed at or above $2 million while 35% closed at or below $1 million.

Inventory may be low but sales continue to boom

As buyers agents we're routinely bemoaning the lack of inventory.  But sometimes it's worth taking a high level view of sales.

By most measurers, last year (2021) was a boom year for residential sales in San Francisco with over 7,300 units changing hands -- the highest number we've recorded in the 16 years we've been keeping records.  The prior three years (2018-2020) total sales were in the 5,200-5,300 range, 28% below 2021.

To get a closer perspective on how we're doing so far this year here is a graph comparing the first four months of 2022 to the same period for previous years.

With the exception of 2021, the first four months this year have seen more sales than any of the years back to 2006.  Climate change (earlier spring market)?  Afraid of missing out on historically low interest rates?

Will this trend last for the rest of the year?

Inventory Increases, Sales Lag, Price Reductions Increase

Historically the end of April and May produces the largest numbers of new residential home inventory coming onto our market and this year has been no exception.  But compared to a comparable 14-day period a year ago new single family homes are down by 22% (47) while condos/TICs are down by 8% (28 homes).

https://boldsf.blogspot.com/2022/05/inventory-increases-sales-lag-price.html

As of May 15 we have about four weeks of available inventory for single family homes and 11 weeks for condos/TICs.

http://www.boldsf.com/Statistics%20test/Statistics%20reports/2022/04-2022/San%20Francisco%20Fundamentals%202022-combined.pdf

Total sales continue to lag behind last year which was our best year since 2004 in the number of closed sales.  Single family homes are down 11% and condos/TICs by almost 20% as of the end of April.

As telling, are the number of price reductions in the last two weeks.  Single family homes saw 32 price reductions and condos/TICs saw 146 price reductions.

With that being said it must be pointed out that as of May 15th there are 126 homes in contract (28 single family homes and 98 condos/TICs).  Also there are 492 homes pending (230 single family homes and 262 condos/TICs).  That's almost an entire month of average closings.  So demand seems to remain strong and consistent.

 

Month-to-month Fundamentals

Each month we prepare a one-page "fundamentals" report, one each for San Francisco, Marin and Sonoma.  Here are some highlights for Marin and San Francisco:

Marin Fundamentals – March sales were up substantially compared to last month 163 to 100 (single family homes) and 54 to 46 (condos).

Average selling prices were up $2,002 compared to $1,952 for single family homes but, as you can see, that increase was not uniform across all configurations.  Same with condos:  with average selling price $897 vs $859 a month ago.

Inventory has increased 126 compared to 96 at the beginning of February (single family homes) and 63 compared to 57 (condos).

 

San Francisco Fundamentals – the number of sales and average selling prices were up with a one exception.  Sales increased slightly for single family homes 239 vs 236 a month ago.  For condos sales increased substantially 367 vs 236 (55%).  Average sales prices have increased for single family homes ($2467 vs $2335 – 6%) and condos ($1,417 vs $1,377 – 3%).  The average premium (selling price / asking price) for single family homes is            117% for single family homes) and 106% for condos (about the same as last month).

Annual average sales prices are at record highs for the two categories of single family homes we track.  The largest condo configuration we track (2/2) is also back at all time highs with 2/1 condos on $35k off its all time high (2019).  Smaller condos like the 1/1 configuration are recovering more slowly.

Days-on-market have decreased across the board.

Inventory of single family homes is flat (203 vs 204) but condo inventory has jumped 10% to 734 vs 662 a month ago.