Post Labor Day

 The post Labor Day residential real estate market opened with a bang.  In the past seven days 398 new homes were added to our inventory – 126 single family homes and 272 condos/TICs.  Including these new additions, single family homes now represent about 1.5 months of available inventory and condos/TICs  2.5 months. 

It appears closed sales are still lagging behind the first eight months of 2021 sales by almost 20%.  Single family homes are 14% behind and condos/TICs are behind 24% compared to the same eight month period last year.

Average selling prices remain at historic highs for single family homes priced under $2.75 million.  However the overall market is showing signs of average sales prices moderating downward.  In particular, condos/TICs have declined 4-6% compared to the historic highs reached in 2019 for the three configurations we survey.

When you factor in another fed rate increase of as much as 100 basis points coming soon, interest rates could reach the 6% range going into the fourth quarter.  As our old broker used to say “the market is the market” – you either learn how to work it to your client’s advantage or complain to anyone who will listen how bad it is.

Taking Stock of the Post Labor Day Market

 The San Francisco residential real estate market remains quite active even though new inventory coming onto the market has slowed to numbers we usually don’t see until December.  There remains about four weeks of available single family home inventory as of 9/5/22 and condos/TIC inventory about eight weeks.  In addition there are 84 single family homes and 154 condos/TICs in the “coming soon” category.

Comparing closed sales for the first eight months of this year vs 2021 single family homes have declined by 14% and condos/TICs declined by 24%.  Overall residential sales declined by 20%.

Historic high average selling prices remain for single family homes priced below $2.75 million.  However, the condos/TICs segment has moderated.  For 1/1, 2/1 and 2/2 configurations* we survey each remains off their historic highs established in 2019.  1/1’s have gone from $871k to $824k,  2/1’s from $1,174k to $1,168k, and 2/2's from $1,463k to $1,429k (-5.4%, -0.6%. and -2.3% respectively).

This new market has much to offer for buyers and sellers.  Inventory remains relatively stable and consistent – 1 month for single family homes and 2 months for condos/TICs.  Rising interest rates typically means less competition and generally selling prices closer to list prices with offers that contain more conditions and more back and forth negotiations.

Also of note, in the last two months there has been an unusually large number of listings that have been withdrawn particularly in the $1million-$1.5million price range.

 

*bedrooms/baths