As the San Francisco economy continues to draw from the proverbial “well” of the technology sector, the median price for a single-family home remains on an upward trajectory, up by 14.2 percent compared to September of last year, at $746,000.
Add to that a multitude of leisurely events occurring on any given weekend, it comes to no surprise that San Francisco was recently voted the “Best City” in the country by Bloomberg Businessweek.
But, as summer has winded down and families have returned back to school, a slowing down of the real estate market has occurred, which is typical around this time of the year and evident in the number of available homes for sale.
Single-Family Home Sales
As compared with September 2011, the inventory of single-family homes for sale in the city has tapered sharply by 73.2 percent, to just 281 properties in total. The number of homes under contract has also declined by 59.7 percent, while the total number of homes sold has fallen by 57.1 percent, to a total of 90 properties sold.
For homes that were priced below $700,000, the months of supply inventory dropped by 70.7 percent to a reading of 1.1 months. For higher-priced homes between $700,000 and $1.2 million, the months of supply inventory also fell, by 34.7 percent to 1.9 months.
With the vast shortage of inventory of homes for sale, every district in the SFARMLS residential map experienced a falloff in the number of homes under contract and the total number of homes sold.
One region of the city which fared better than others is in the southwestern area of San Francisco, commonly regarded as Lake Merced. As compared to September of last year, the number of homes sold only dropped by 15.4 percent. With a whole host of scenic, outdoor recreational activities available and wide-variety of real estate, potential home buyers who are physically active and love the fresh air will find satisfaction in the neighborhoods around Lake Merced. The median price for a home here is $1,170,000, which is up by 33.7 percent from 2011.
Another area of the city which performed notably well was in the southeastern section, east of Interstate 280 and extending all the way to the bay. Compared to the rest of the city, there were more homes sold in this part of town, with a total of 26 properties sold in September. The neighborhoods in this area, such as the Excelsior and Visitacion Valley, offer some of the most ethnically diverse communities and best prices in the city. The median price for a home here is $474,500, which is up by 5.2 percent from 2011.
In market conditions similar to single-family homes, the inventory of condominiums for sale in the city has sunk by 69.1 percent, while the number of condominiums under contract also decreased by 42.1 percent. In the month of September, the total number of condominiums sold lessened by 43.2 percent, to a total of 113 units sold.
For condominiums that were priced between $500,000 and $900,000, the months of supply inventory tightened by 55.8 percent to a reading of 1.7 months. For luxury condominiums priced above $900,000, the months of supply inventory also fell by 46.3 percent to 2.8 months.
Despite a citywide lack in inventory, one area which maintained moderately positive condominium sales activity is in the Central District, in the geographic center of San Francisco. In September, a total of 24 condominiums units were sold, down from 34 units from the same time last year. The Central District includes such neighborhoods as the historic Haight Ashbury, which until this day, still retains its bohemian character from the mid-1960s, and the more clean-cut Noe Valley, whose typically sunny weather and mom-and-pop shops add to the wholesomeness of its predominately young family-oriented community. The median price for a condominium here is $997,500, which is up by 36.7 percent from 2011.
USA Today reports, “The unemployment rate in September fell from 8.1% to 7.8%, the lowest since January 2009, as Americans benefited from a surge in part-time work, the Labor Department said Friday. Employers added 114,000 jobs, about what economists expected, with health care and transportation and warehousing leading job gains. Businesses added 104,000 jobs while federal, state and local governments added 10,000. The jobless rate fell sharply because it’s calculated from a different survey than the official employment number. That household survey showed a robust 873,000 increase in employment and a 456,000 decline in unemployment. However, many of those job gains were in part-time and self-employed positions.”
The consumer confidence index, which had declined in August, improved in September. The index now stands at 70.3, up from a reading of 61.3 in August. Lynn Franco, Director of Economic Indicators at the Conference Board, says that, “The Consumer Confidence Index rebounded in September and is back to levels seen earlier this year (71.6 in February 2012). Consumers were more positive in their assessment of current conditions, in particular the job market, and considerably more optimistic about the short-term outlook for business conditions, employment and their financial situation. Despite continuing economic uncertainty, consumers are slightly more optimistic than they have been in several months.”
From CNNMoney, “In another sign of a turnaround in the long-battered real estate market, average home prices rebounded in July to the same level as they were nine years ago. According to the closely watched S&P/Case-Shiller national home price index, which covers more than 80% of the housing market in the United States, the typical home price in July rose 1.6% compared to the previous month. It marked the third straight month that prices in all 20 major markets followed by the index improved, and it would have been the fourth straight month of improvement across the full spectrum if not for a slight decline in Detroit in April. The index was up 1.2% compared to a year earlier, an improvement from the year-over-year change reported for June. While home prices have been showing a sequential change in recent months, it wasn’t until June that prices were higher than a year earlier. The July reading matched levels last seen in summer 2003, when the market was marching toward its peak in 2006. The collapse of the market after that led to the financial crisis of 2008.”
The San Francisco Chronicle recently reported that, “Foreclosures and default notices in California and the Bay Area have subsided back to their 2007 levels. Foreclosures are still running about double historical averages, but are a far cry from the sky-high levels during the worst of the housing crisis in 2008. In 2008, a quarter of a million California homes were repossessed by lenders, according to data from ForeclosureRadar.com, a Discovery Bay real estate service. This year, the state is on track for about 107,600 homes to go into foreclosure – a decline of 56 percent – assuming the rate established from January through August is maintained. From 1980 to 2011, California’s annual average number of foreclosures was 55,054, according to San Diego’s DataQuick.”RELATED CONTENT