Has sanity returned to the San Francisco residential real estate marketplace?

 

September ends a very slow third quarter for closed residential sales.  There were 1,815 single family homes that closed and 2,466 condos/TICs.  Compared to the third quarter of 2021 single family home closed sales declined 15%, condos/TICs declined 25% and total combined residential sales declined 21%.

Inventory continues to build following the Labor Day holiday weekend as it does most years.  Single family homes have an inventory of about two months supply and condos/TICs show an almost three month supply.  Of the 432 currently active single family homes 138 of them, almost 32%, are priced at or above $2.5 million.

Average selling prices continue to moderate downward.  While single family homes remain at historic highs they have been declining in recent months.  Days on market are increasing and overbidding is declining.  All of which means lower average selling prices.  And, as we approach the 7% mortgage interest rate level, this will probably dampen sales even further.

Active buyers are finding plenty of available inventory.  Competition has dwindled and, in many cases, disappeared.  Negotiating is back on the table.  DOM continue to increase.  While some overbidding continues in a few “pockets of popularity”, offer dates have largely disappeared and the few we’ve seen have not succeeded in generating accepted offers.