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.