San Francisco’s real estate market still has very low supply, interest rates are still very low, and the latest figures from the Bureau of Labor indicated that San Francisco’s unemployment rate is at 3.4% (jobs are arguably the most important factor in housing demand), the City remains a very desirable location, and we still have buyers and sellers. What has changed between 2015 and now?
Despite the above-mentioned constants, the real estate market has adjusted. We are now seeing pockets under the many markets within the City. Volatility in stock values has taken a toll on consumer confidence in the $2+ million market. This segment, which is essentially funded by the stock market, has seen declines of 5%-8% on average year-over-year.
In contrast, competition among homes in the $750,000 - $1.5 million range continues to be exceptionally fierce. Many homes are receiving multiple offers, often well over asking. Homes located in areas previously considered B-locations such as Sunnyside, Bayview Hunters Point, Mission Terrace, Excelsior, etc. are predicted to be where the highest appreciation in sale prices will occur this year.
As buyers navigate their options, competition for the best available properties should be profound this Spring, especially if the market remains hobbled by a lack of supply.