A decline in the number of single family homes for sale coupled with an increase in the number of homes sold suggests stabilizing prices will help keep the San Francisco real estate market moving through the summer months.
If we look at June 2015 vs June 2016 YOY data, we see about a 4% decline in the number of single family homes for sale in the city but a 6% increase in the number of closed sales. The trend was most visible in a few areas – District 5 (central SF) had 77 homes for sale (unchanged from last year) with an almost 75% increase in the number of sales (from 23 to 40). District 9 (central-east) also stands out with a 21% decrease in the number of homes for sale coupled with a 58% increase in closings(from 19 homes to 30).
Is sales price the dynamic that ties these numbers together in a way that makes sense? Considering that both District 5 and District 9 both saw a drop in the median sale price per unit, with a drop of (-3.5% and -11.4%) in their median sales prices, respectively, it very well may be the explanation.
As prices have stabilized, are buyers encouraged by a leveling market where prices have steadied and slowed their recent astronomical price appreciation rates? While stabilizing prices might be bad for individual sellers, does the overall trend towards a more rational and ordered market create more overall benefit for the entire market?
Finally, as we look at single family home stats for San Francisco in June of 2015, we should note the power of a few numbers to impact overall trends. 6 of our areas saw a decrease in median price, but the increases in 3 neighborhoods were so substantial that they skewed the overall city trend in the upward direction. Single family home prices were up dramatically in Districts 6, 7, and 10 (42%, 40% and 19%). In most other neighborhoods the trend was in the downward direction.
Will the price stability seen across the city have an overall positive impact on the market by increasing the number of overall homes sold? Is this welcome news for sellers and buyers? What are your thoughts about the market?
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Data Source: San Francisco Association of Realtors, Multiple Listing Service.
Credits: Omar Maissen for additional research and writing