JANUARY 2016 HOUSING NUMBERS ARE IN

The latest data from the Multiple Listing Service show what most of us suspected - the real estate market in San Francisco is still very tight. In January 2016, housing supply dipped to the lowest level compared to the same period in 2014 and 2015. Similarly, year-over-year median sales prices were up.

Making sense of the story:

  • As indicated in the chart above, between January 2014 and January 2016, the number of single family homes and condos for sale has decreased. Compared to January 2014, there were 34% fewer single family homes for sale this year, and about 16% fewer condominiums. TICs were the only product that saw year-over-year supply increase by 43%. Some of the dip in available homes for sale may be attributed to the traffic and events surrounding Super Bowl 50.  
  • The chart below shows that the median sales price for single-family homes increased by 13% year-over-year. 
  • Condos and lofts increased almost 15% during the same period.
  • TICs showed a lower increase in year-over-year median sales, rising 5%.

Bottom line: As long as the demand in the real estate market is fueled by strong wages and job growth, paired with low inventory, it is unlikely that we'll see a dent in home prices.


 

SF MEDIAN HOUSE PRICE APPRECIATION (2011 to 2015) BY NEIGHBORHOOD


While waiting for the 2016 real estate market to really wake up and start generating useful statistical data, below is a look at San Francisco house and condo values over the past 5 years, broken out by neighborhood. In most districts, the market bottomed out in 2011, and the current market recovery began in 2012.









Median sales price is a very general statistic, often concealing an enormous variety of values in the underlying individual sales. It can be and often is affected by other factors besides changes in fair market value, such as changes in the inventory available to purchase, and major changes in the distressed property, luxury home, or new home construction segments. Sometimes median prices fluctuate without any great significance: substantially different groups of homes (larger, smaller, older, newer, etc.) simply sold in different periods. Assessing appreciation by changes in dollar per square foot values, instead of by median sales prices, can sometimes deliver significantly different appreciation rates.

SEASONALITY WITH HOME SALES PRICES

This chart gives an exceedingly clear illustration of the seasonality of home price appreciation over the past 4 years. Summer/autumn plateau in 2015? It’s happened to a large degree every year since 2012. We won’t really know where the market is headed next until we see what happens in early spring 2016. (Barring some large, negative economic event before then.)