San Francisco Real Estate Market – New Year Report

San Francisco Real Estate Market

Looking Back on 2017

& Forward to 2018

January 2018

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The median SF house sales price in 2017 was $1,420,000 (up from $1,325,000 in 2016), and for condos, it was $1,150,000 (up from $1,095,000). Looking just at the 4th quarter, median prices were $1,500,000 for houses (up from $1,350,000 in Q4 2016) and $1,185,000 for condos (up from $1,078,000).


San Francisco, CA, National Home Price Trends

San Francisco Median Home Prices by Quarter


Additional chart: Bay Area Median Home Price Trends by County

The chart below, based on CoreLogic S&P Case-Shiller Index data, tracks general price appreciation trends of homes in the upper third of prices in the 5-county SF Metro Area. Case-Shiller does not base their calculations on median sales price changes but uses its own proprietary algorithm. This chart has been simplified to only reflect percentage increases and decreases from various points in real estate cycles. Since it covers 5 counties, it is a very generalized illustration.

Case-Shiller San Francisco Bay Area Home Price Trends

Link to our full report on the Case-Shiller Home Price Index

Link to our report on Bay Area real estate cycles

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Moving into 2018, there are a lot of spinning plates in the air – local, state, national and international factors that could affect markets. 2017 saw real estate markets surge and financial markets soar. After some cooling from mid-2015 to mid-2016, the Bay Area high-tech economy surged back into high speed, with companies leasing enormous spaces in newly built office buildings – which they will presumably fill with new hires. Unemployment rates have flirted with historic lows, and 2018 may see some major local IPOs, which could create great quantities of new wealth. The Bay Area still has probably the most dynamic, innovation-fueled economy in the world and indisputably remains among the great metro areas on the planet – but there are also social, economic, political and environmental challenges looming as well.

Congress delivered an unpleasant holiday present to many Bay Area residents in the form of federal tax law changes limiting the deductibility of mortgage interest and state and local taxes. The effect of these changes make living in an already high cost-of-living area more costly for many residents, and also reduce some of the financial incentives of homeownership, especially for more expensive homes. Predictions on the effect of these tax changes on local housing markets and the business environment range from one extreme (economic devastation) to the other (shrug), and the state legislature is currently working on bills that might blunt the negative financial impacts. It is too early to guess how it will all play out. We live in interesting times.

This report will range far and wide looking at real estate, and some economic and demographic issues that impact it. Most of the charts are self-explanatory, so we have kept the text to a minimum. A review of annual, year-over-year, real estate market trends in San Francisco are at the end of this report.

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San Francisco Home Sales by Property Type

San Francisco Probates Views Values

San Francisco New Home Listings Coming on Market


Link to our report on market seasonality

California Migration Trends in 2016


Link to our analysis of domestic and foreign migration trends

Link to our survey of SF and Bay Area demographics

San Francisco Employment Growth by Year

S&P 500 Index by Year

Annual Mortgage Rate Trends


Link to our report on economic context factors

San Francisco Housing Affordability Trends


Link to our report on Bay Area housing affordability

San Francisco Bay Area Rent Trends


Link to our report on the apartment building market

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San Francisco Luxury Homes Market

San Francisco Luxury House Sales by Year

San Francisco Luxury House Sales by Neighborhood

San Francisco Luxury Condo Sales by Year

San Francisco Luxury Condo Sales by Neighborhood

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SF Home Prices by Neighborhood


The following tables and charts are part of a larger survey, which can be provided upon request.

San Francisco Neighborhood & District Map

San Francisco houses under a million dollars

San Francisco 4-bedroom house prices

San Francisco 3-bedroom house prices

San Francisco 2-bedroom condo prices

San Francisco Condo Sales by Price Segment

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Annual Market Trends


Most of these annual trend charts show the market heating up again in 2017 after some cooling in 2016. Very generally speaking, since 2015, the house market has been hotter than the condo market, and the more affordable neighborhoods hotter than the more expensive. But 2017 was a strong year across virtually all market segments.


San Francisco annual median house price percentage changes

 San Francisco annual condo price percentage changes

San Francisco Listings Selling Quickly

San Francisco Home Price Overbidding

San Francisco Days on Market by Year

San Francisco Months Supply of Inventory by Year

San Francisco Supply and Demand Trends


All our real estate analyses can be found here: Paragon Market Reports

Please let us know if you have questions or we can be of assistance in any other way. Information on neighborhoods not included in this report is readily available.

If you will forgive a little celebration on our part: In 2017, Paragon became the largest brokerage in San Francisco by dollar volume sales of residential and multi-unit residential real estate (as reported to MLS, per Broker Metrics). We opened our doors in 2004.


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It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis. In real estate, the devil is always in the details.

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term. Late-reported MLS activity may change certain statistics to some small degree.


© 2018 Paragon Real Estate Group

1000+ Things To Do in SF this Weekend!



Paragon Real Estate Group
 
Paragon Real Estate Group


1000+ Things to Do and Enjoy
in San Francisco & the Bay Area

Out of town guests are arriving, the kids are hungry, the dog is restless, or you are just lying on the couch reading email and need something to motivate you to get up and out of the house.


Dinner, brunch, burritos, burgers, desserts, bars, music, dance, theater,
walking, biking, hiking, and things to do with visitors, children and dogs

Place Magazine

Paragon Real Estate Market Reports

Note: You will undoubtedly find yourself disagreeing vehemently
with one or more of the above lists: best burrito, brunch and dive bar are
particularly contentious, ferociously disputed issues in the Bay Area. We hope you will accept our apologies for any egregious errors.


© 2017 Paragon Real Estate Group
 
No one knows San Francisco real estate better than Paragon.
Paragon Real Estate Group
www.paragon-re.com/
Irina Luck
Lic# 01927187
1400 Van Ness Avenue
San Francisco, CA 94109
Direct 415.738.7206
Cell 415.722.4461
iluck@paragon-re.com
 

Transitioning into Autumn Market

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Paragon Real Estate Group
 
Paragon Real Estate Group

San Francisco Real Estate Market Report:
Heading into the Autumn Selling Season

Long-term home price appreciation, San Francisco neighborhood prices,
Bay Area housing affordability, seasonality, market dynamics statistics,
the S&P 500 vs. the Shanghai composite index

September 2016 Update


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Annual Median Sales Price Appreciation since 1994
for San Francisco houses, condos and TICs
(Prices in thousands of dollars)


2015 to 2016 YTD, the overall median price for condos, which now comprise the majority of home sales in the city, remained exactly the same at $1,100,000: Among other issues, this market segment is clearly being impacted by an increase in new-project condos coming on market, altering the supply and demand dynamic. The house median price increased 6% to $1,328,000: This is far below the appreciation rates of the previous 4 years and is being driven mostly by continued demand for "more affordable" houses selling below $2 million. TICs, which only comprise 4% to 5% of home sales basically stayed flat year over year.

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Where to Buy a Home in San Francisco
for the Money You Wish to Pay


We just issued our semi-annual update on home prices by property type and neighborhood. Below are 3 of the 8 charts in the analysis. The complete report is here: San Francisco Neighborhood Home Prices

26% of SF house sales were under $1 million so far in 2016;
In 2011, that percentage was 75%.

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Autumn & the Expected Surge
in New Home Listings


Autumn is the second biggest selling season of the year, and September is typically the single month with the highest number of new listings. Autumn is a relatively short market season, running from after Labor Day until mid-November, when the market begins its slide into its winter-holiday slowdown. It is particularly important for the luxury home segment as its market activity usually plunges to an almost standstill at Thanksgiving and doesn’t revive until February or early March, i.e. this 2-month window is basically it for the next 5 to 6 months.

At this point, we are waiting to see if the expected, dramatic spike in new listings occurs as usual, and how buyers react to it if it does.

Our full report on seasonality is here: Seasonality & the SF Market

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After 6-Month Decline in 2016,
a Sudden Surge in SF Employment Numbers


From the middle of 2015, the Bay Area high-tech boom appeared to appreciably cool down in hiring, IPOs coming on market, venture capital flow and general economic optimism, and that was one factor in the cooling in the SF real estate market. (One local economist predicted "blood in the streets" of San Francisco from a crash in both high tech and real estate.) As to hiring, from 2010 through 2015, San Francisco added an astounding 100,000 new jobs (the Bay Area added 600,000), putting enormous pressure on home prices and rents, but then in the first six months of 2016, that trend reversed itself and the number of employed residents in the city dropped by over 3000. Well, whether it is a short-term, seasonal fluctuation will become clearer soon, but in July, the trend line reversed itself again and the number jumped by 9000 to hit a new all-time high, as illustrated in the above chart.

The SF market definitely shifted gears this past year, from ludicrous overdrive (as Tesla might describe it) to a more reasonable cruising speed, and it has become much more balanced between buyers and sellers, but we certainly haven’t seen any blood in the streets so far. One question now is whether the Bay Area high-tech boom is getting something of a second wind. The change in employment trends is one of the indications we are seeing that it might be, hopefully without the irrational exuberance, but it is far too early to come to any definitive conclusion.

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Paragon Special Reports on San Francisco
and Bay Area Markets & Housing Affordability


In August we issued 2 reports that received extensive media coverage in Bloomberg News & BusinessWeek, WSJ Mansion Global, San Francisco Business Times, KGO, KTVU, KCBS, SFGate, Curbed and others, even some international publications. Below is a sampling of the many analyses in the reports, as well as links to the full articles.



Full report: Income, Affluence, Poverty & the Cost of Bay Area Housing

Full report: Bay Area Real Estate Markets & Demographics

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A Tumultuous Time in Financial Markets
The S&P 500 vs. the Shanghai Composite Index


We initially created this chart last autumn, and thought it would be interesting to update it for a longer term perspective. Obviously, dramatic shifts in financial markets often affect real estate markets as well.

A year ago at the end of August 2015, a very volatile year began for national and international financial markets. Initially triggered by a crash in the Chinese stock market, sparking serious concerns regarding the international economy, the S&P 500 fell significantly, but then recovered completely by mid-autumn. Then the oil price crisis of early 2016 dramatically affected the S&P, but again, it recovered completely within 2 months. When the Brexit vote came in late June, the market barely reacted, and then the S&P soon hit a new all-time high, a little above its previous spring 2015 peak.

Thousands of pundit prognostications later, many predicting crash and doom, U.S. financial markets are basically back to where they were when the Chinese stock market crisis began one year ago.

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San Francisco Market
Statistical Overview


By virtually every statistical measure of supply and demand, the SF market cooled in 2016: price appreciation generally plateaued, inventory ticked up and sales ticked down, months supply of inventory and days on market increased, and the percentage of sales price over asking price declined. All the changes have been statistically significant, but, except for the luxury condo market (which has softened more dramatically), none of the recent statistics by themselves indicate what would be typically called a weak market. For example, months supply of inventory increased from an average of 1.7 months in the first 8 months of 2015 to 2.3 in 2016, but 2.3 is still quite low; days on market went up 3 days for houses and 7 days for condos, but the current figures are still not high; the percentage of sales price over asking price decreased by about 4 percentage points in 2016, but condos and houses are still averaging sales prices 3% to 8% over original list price, which would have sellers in most other places jumping up and down in glee.

Perhaps the statistic most indicative of change is that the number of listings expiring or being withdrawn from the market without selling has gone up a whopping 60% (and for luxury condos, up over 100%). This is the clearest sign possible of sellers trying to sell their homes for more money than any buyer is willing to pay.

As always, please remember that the heat of different market segments can vary dramatically by property type, price range and location. The more affordable house market, for example, is still crazy hot in many areas of the city. And more affordable markets outside the city have also generally continued to be very competitive.

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These analyses were made in good faith with data from sources deemed reliable, but they may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Statistics are generalities, longer term trends are much more meaningful than short-term, and we will always know more about what’s actually going on in the present, in the future. New construction condos not listed or sold on MLS are not counted in these statistics, though they often affect market dynamics.


© 2016 Paragon Real Estate Group
 
No one knows San Francisco real estate better than Paragon.
Paragon Real Estate Group
www.paragon-re.com/
Irina Luck
Lic# 01927187
1400 Van Ness Avenue
San Francisco, CA 94109
Direct 415.738.7206
Cell 415.722.4461
iluck@paragon-re.com
 



Paragon Real Estate Group
 
Paragon Real Estate Group

The San Francisco Real Estate Market in 2015

Illustrating the Year in 20+ Charts

Architecture, views, probates, penthouses, lofts, TICs, luxury homes, mortgage rates, sales prices, market cycles, and everything else we could think of in a look back on 2015.

A neighborhood map of San Francisco is included at the bottom of this report for your convenience.


Quarterly Median Price Chart & Monthly Case-Shiller Chart

Despite anxiety about interest rates, financial markets, housing affordability, unending international crises, and possibly over-valued high-tech unicorns, the Q4 2015 San Francisco median house sales price, at $1,250,000, is up about 11% from Q4 2014. That dovetails nicely with the S&P Case-Shiller Home Price Index for the Bay Area, which measures appreciation in a different way, but also calculated 11% annual appreciation (through October, its last report). The Q4 condo median price, at $1,125,000, is up 13% year over year, but that is influenced by the greater percentage of more recently built, and more expensive, units in the sales mix.

We have also updated our popular price maps of San Francisco neighborhoods and the greater Bay Area: Home Price Maps

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San Francisco has seen 3 extended periods of home construction: The first ran from the Gold Rush to the 1906 earthquake, when 28,000 buildings were destroyed. The second went from the post-quake rebuilding, with the construction of thousands of Edwardian houses and multi-unit buildings, through the big WWII population surge. Many districts such as the Marina and Sunset/Parkside were built out in the period from 1920 to 1950, with Spanish Mediterranean (in many variations), Marina-style and Art Deco being common architectural styles.

The city population then went into major decline during the subsequent 3 decades and construction plunged. The third era of homebuilding is all about new condo construction, which began around 1980, ebbed and flowed dramatically with the economy, and is currently booming once again.

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A look at a few of the distinctive niches of the market.

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San Francisco is famously a city of gorgeous views. For the simple reason of verticality, more condos have views and, generally speaking, more panoramic and spectacular views, than houses. Of course, many other lovely views add to SF home value as well: sweeping city views; park views; marina views; views of Alcatraz, Marin and Mt. Tamalpais; and of the East Bay and Mt. Diablo. A few lucky (typically, very affluent) condo owners have sensational views from the windows on all 4 sides of their high altitude units.

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After being bludgeoned in 2015 by thousands of articles, predictions and warnings regarding interest rates, here is a look at how much they actually changed over the course of the year: Approximately one seventh of one percent. Per recent signals from the Fed, presumably mortgage rates will rise in 2016, but expectations over the last 6 years have been confounded far too often to be sure. Significant increases would certainly worsen the affordability equation for homebuyers financing their purchases.

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Seasonality: Waiting for Spring


The 2 charts above illustrate the extreme seasonality of the market, both in the numbers of new listings coming on market, and the percentage of listings that accept offers (a measurement of supply vs. demand). The second chart also shows that the market for homes under $2 million has been hotter than the luxury home market: There are fewer buyers at the very high end, and luxury homes are also most prone to significant overpricing.

The spring selling season, which actually started in February last year, is typically the most feverish, and this is especially true for luxury homes: Notice, in the 2nd chart, the huge spike in demand for luxury homes last spring.

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Average Dollar per Square Foot Values

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Luxury home sales hit new peaks in spring 2015, but with the stock market volatility in late August and September, the market softened, inventory grew (to its highest point ever) and sales dropped by about 17% in October, year over year. (Affluent buyers and sellers are most influenced by financial market volatility.) However, the stock market then recovered and stabilized in October and buyer confidence improved, which is reflected in the year over year increase in sales that occurred in November and December.

Remember that sales in one month generally reflect the state of the market 3 to 6 weeks earlier, when the sale terms were negotiated: Stock market angst in September meant a weaker luxury home market in October; the stock market recovery in October brought about a stronger real estate market in November and December. Q4 2015 sales ultimately ended slightly up from Q4 2014.

Charts: Luxury House Sales by District & Luxury Condo Sales by District

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Details, Amenities & Size


The above details are as described in MLS by listing agents, so the numbers are very approximate. Also note that what most people might see as a unit above a laundromat, an enthusiastic listing agent might see as a rarely available luxury penthouse.



One of the reasons the Pacific Heights district has by far the highest house prices in the city is that its average house size is so much larger. However, its mansions also command a very high dollar per square foot value, as seen in one of the earlier charts.


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The sales of condo shall continue to make up a larger and larger share of overall home sales in San Francisco, as new condo construction continues apace. (Condos also turn over more often than houses.) Very few new houses are built in the city and they are usually big, high-tech, beautiful and costly.

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Where the Most Home Sales Occur

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San Francisco is very much a boutique market for multi-unit buildings: Our apartment buildings are generally much smaller, older and, for that matter, more gracious than those found in the suburbs. These properties are often at the heart of fierce controversies pertaining to rent control, tenants’ rights, tenant evictions, and condo conversion rules. There has been an immense increase in market rate rents over recent years (SF is the most expensive rental market in the country), though rules restrict increases for existing tenants of buildings built before 1979 (i.e. almost all of our apartment buildings).


The tenancy-in-common unit with an exclusive right to occupy, aka the TIC, is a property type rarely found outside of San Francisco. It was originally created as a way for sellers of multi-unit properties to get significantly more money: The individual unit sales adding up to more than the purchase of the entire building by one buyer. However, they also provided a lower cost alternative for homebuyers, since TICs typically cost 10% to 15% less than comparable condos. (The TIC phenomenon also generated significant legal fees for the lawyers who came up with the idea.) Because of changes in tenant eviction law and condo conversion rules, financing and other issues, the number of TIC sales has plunged since its peak in 2007. On the other hand, some TIC units are now selling for jaw-dropping prices: In 2015, 4 sold for over $5 million. The median TIC sales price last year was $947,000.

Map of San Francisco Neighborhoods

Please call or email if you have any questions.

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Some 2015 totals are projections based on MLS data available within the month of December. These analyses were performed in good faith with data derived from sources deemed reliable, but they may contain errors and are subject to revision. All numbers should be considered approximate.


© 2015-2016, Paragon Real Estate Group
 
Wishing you and yours a safe, healthy, prosperous and happy New Year.
Paragon Real Estate Group
www.paragon-re.com/
Irina Luck
Lic# 01927187
1400 Van Ness Avenue
San Francisco, CA 94109
Direct 415.738.7206
Cell 415.722.4461
iluck@paragon-re.com
 

http://www.irinaluck.com/2016/01/08/586/

Summer Guide to San Francisco and the Bay Area

1000 Ways to Enjoy San Francisco
& the Bay Area This Summer

Guests are coming, the kids are out of school, or you just want to do something different than usual. Summer has arrived in one of the most beautiful and multi-dimensional places on earth, and here is a wide variety of ideas for making the most of it.


Dinner, brunch, burritos, burgers, bars, music, dance, theater, running, biking, hiking, and things to do with visitors, children and dogs.


Important note: You will undoubtedly find yourself disagreeing vehemently
with one or more of the above “best lists” – best burrito, brunch and coffee are particularly contentious issues in the Bay Area. Our position is 
clear: We agree wholeheartedly with you and share your dismay. Still, despite these egregious errors in taste, we hope you and yours are able to enjoy a summer delightful in every way.