Monthly Review and Clues to the Remainder of the Year

 

Some notes from our recent monthly reports and our weekly 3-county report

·         3-county report

o   There are fewer active listings of single family homes in both Marin and San Francisco than there are homes that are “pending” (already in contract).  Same situation last month.  While this happens sporadically, it's unusual for it to happen two months in a row and seems be a symptom of low inventory and climbing interest rates.

o   Inventory is trending up slightly compared to a week ago for single family homes in all three counties with condos down slightly in both Marin and San Francisco

o   But compared to a year ago numbers are down across the board.  San Francisco down approx. 15%; Marin down 40% in single family homes and down 35% in condos. 

·         Fundamentals:

o   San Francisco number of sales of single family homes is down compared to January (22 vs 28) but overall number of sales was higher in February than January, as expected.

o   San Francisco average selling prices are generally up compared to the previous month, with 3/2 homes essentially flat. However, compared to a year ago average selling prices for single family homes are down 19% and average selling prices for condos is up slightly 2%.

o   San Francisco DOM is down substantially across the board and premiums are up

o   Marin number of sales of single family homes is up, as expected.

o   Marin average selling prices are down slightly overall for both single family homes and condos with the notable exception of 3/2, 3/3 and 4/4 configurations.  Compared to a year ago average selling prices for single family homes are down by 6% but condos are up by almost 10%.

o   Marin DOM is down significantly overall and premiums are up.

·         So, overall, month-to-month inventory numbers are following typical trends for this time of year but, again, compared to a year ago volume is down.

Market Summary

The San Francisco residential real estate market remains strong.  Following up on 2021 where total residential sales were the best since 2004.  7304 (2021) vs 7403 (2004). 

After a rather soft January, February saw a resumption in sales of single family homes with very low available inventory, strong demand, usually multiple offers, and average DOM of 14 days and premium (selling price divided by list price) of 126%.  Average selling price for 2/1 and 3/2 single family homes in February were $1.395 million and $1.8 million respectively.

Here's a graph showing the number of San Francisco residential sales in the last four years broken down into the first two months of the year and the last 10 months.

What is somewhat unexpected was the condo/TIC segment of our market where inventory came back very strong with almost 2 months of supply.  Demand has also increased as have month-to-month increases in selling prices as seen in the three configurations we survey (1 bedroom/1 bath; 2 bedroom/1 bath; 2 bedroom/2 bath).  

Of special note are 2/2 condos which are setting historic highs for average selling prices.  1/1 condos also saw an increase in February to $828k surpassing last year’s average selling price of $823k but lagging behind $871k set in 2019.

Other items of note:  

The number of pending* sales of single family homes is more than the the number of currently active inventory (222 vs 207).

There are 280 condos/TICs pending vs 659 active.

Comparing the last 14 days reporting period to the same time last year, both single family homes and condos/TICs show a 10% increase in new listings.

March closed sales for 2021 at 257 single family homes and 440 condos/TICs for a total of 697.  Closed sales for this March will be predictive for the remainder of 2022.