San Francisco real estate has been appreciating steadily for at least six years, but the more subtle trends within that larger pattern are not always predictable.
What is Predictable?
As median sales price (MSP) has soared for both single-family homes and condos, active inventory has trended down. In other words, as supply went down the price went up. Graphing price and inventory together, it is easy to see this inverse relationship.
Since 2012, single-family homes have appreciated over 108% (dramatic to say the least). Most of that appreciation took place between 2012 and 2015. Since then, the appreciation has been steady at a little over 5% a year. This year, a lot of that 5% occured within the last few months, so it seems things may have settled down a bit.
What is Surprising?
This May has broken a pattern. May usually attains the highest MSP of the year. This year it has trended down. The MSP of San Francisco condos has followed suit with smaller, but nevertheless significant numbers.
What to Make of the Trends
Seasonality is usually an important trend to keep an eye on. While this May was an odd springtime month, the number of new listings typically peaks in spring and then bottoms out in December. This May could indicate a downturn in MSP, but it could also be the market slowly approaching a plateau after continuous increases.
Even when the market behaves as expected, and the number of listings ebbs and flows with the changing (or unchanging) weather, demand respects no season in this city. In December, pending sales typically exceed the number of new listings. (Maybe being one of the few new listings in December is not such a bad idea.)
Despite massive appreciation, we do not see the current market as a bubble. The demand continues to exceed supply. In fact, at several points this year, including the first few months, the pending sales exceeded the number of new listings. This means that the increase in price corresponds to a real and thus far sustainable demand.
Resource Rock
Keith Rockmael brings his commercial and investment experience to his clients. He works with commercial and investment property owners and investors. He combines negotiation and marketing skills with his writing background to create the best scenario for his clients.
He brings his passion for both sustainability and creativity to his work. His Green background (former member of the Build It Green Real Estate Council, founder of the Green Building blog Greenerati) enables him to educate both commercial and residential investors and owners about the benefits of Green and Sustainable building.
Keith maintains an active presence in various publications as a contributing writer and blogger for CAR Real Estate Magazine, Los Angeles Times, Travel & Leisure.com, Relix, Sustainablog, Vanguard magazine and several other publications.
Keith has lived in various countries, including Mexico, Guatemala, and Taiwan and has visited over 50 countries. He speaks conversational Spanish.
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