The first month of 2013 brought the same type of market behavior that San Francisco has been experiencing for some time now.
With the already low inventory of homes for sale being consumed at such a rapid rate, bidding wars have broken out throughout parts of the city and overall buyer demand remains high.
As home prices continuing to rise, confidence among potential home sellers is sure to bolster inventory and the housing market in the coming months.
Single-Family Home Sales
Compared to January of last year, the inventory of single-family homes for sale in the city dropped by 40.3 percent, to a total of 380 properties. The number of homes under contract also fell by 9.6 percent, while the number of homes sold increased by 16.9 percent, to a total of 152 properties sold.
For homes that were priced below $700,000, the months of supply inventory shortened by as much as 53.3 percent to a reading of 1.2 months. For higher-priced homes between $700,000 and $1.2 million, the months of supply inventory also fell, by 58.7 percent to 1.1 months.
(These exceedingly short time frames are indicative of a seller’s market, where sellers have more leveraging power over buyers who are all vying against a limited amount of properties.)
One area of the city which experienced robust sales activity is in the Sunset District, over in the central-western part of town.
Since January 2012, the number of homes sold has jumped by 92.9 percent, to a total of 27 properties. Once commonly referred to as the, “Outside Lands,” for its former backdrop of endless sand dunes and scarcity of roads, the Sunset District is now home to a predominantly residential community, with a number of well-regarded schools and family-owned businesses. Combined with its close proximity to Golden Gate Park and Ocean Beach, families who are seeking a quick exit from the hustle and bustle of downtown will find solace in the Sunset District. The median price for a home here is $760,000, which is up by 10.9 percent from last year.
Another region of the city which experienced healthy sales activity is in the neighborhoods of Bernal Heights and Potrero Hill. Compared to this time last year, the number of homes under contract rose by 23.1 percent, while the total number of homes sold also significantly increased, by 120 percent, to 29 properties sold. Bernal Heights and Potrero Hill, which both offer more laid-back, cozy and neighborhood-friendly communities are ideal for buyers who want to be close to the city but also yearn for amenities such as a small garden or yard. Charming bungalows and cottages add to the appeal of this affordable, yet mixed array of real estate. The median price for a home here is climbing fast, now at $874,000, up by 52.5 percent from last year.
Similar to single-family homes, the inventory of condominiums for sale in the city dropped by 40.3 percent, to a total of 498 condominiums. The number of condominiums under contract rose by 12.6 percent, while the number of condominiums sold also fell by 6.2 percent, to a total of 151 units sold.
For condominiums that were priced between $500,000 and $900,000, the months of supply inventory tapered by 53.9 percent to a reading of 1.2 months. For luxury condominiums priced above $900,000, the months of supply inventory also dropped by 64.9 percent to 1.5 months.
Of all of the San Francisco residential districts, the only area that experienced positive condominium sales activity is in the South Beach and SoMa (South of Market) neighborhoods in the central-eastern portion of the city. Since January 2012, the number of condominiums under contract rose by 11.5 percent, while the number of condominiums sold also improved by 59 percent, to a total of 62 units sold, which accounts for almost half of all condominiums sold in the city last month. Popular among young professionals, South Beach is one of the hippest neighborhoods in the city, with its glitzy high- and mid-rise condominiums and fun outdoor activities, while SoMa continues to maintain its cool reputation as the city’s cultural hub for art and nightlife. The median price for a condominium here is $848,200, which is up by a whopping 51.7 percent from 2012.
The consumer confidence index, which had declined in December, fell further in January. The index now stands at 58.6, down from a reading of 66.7 in December. Lynn Franco, Director of Economic Indicators at the Conference Board, says that, “Consumer confidence posted another sharp decline in January, erasing all of the gains made through 2012. Consumers are more pessimistic about the economic outlook and, in particular, their financial situation. The increase in the payroll tax has undoubtedly dampened consumers’ spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock.”
Earlier this month, CNNMoney reported, “The bursting of the housing bubble plunged the economy into a recession from which it has yet to fully recover. But economists say this could finally be the year that housing lifts us out of the doldrums. Just over half of economists surveyed by CNNMoney identified a housing recovery as the primary driver of economic growth this year. The rest were split fairly evenly between consumer spending, increased domestic energy production and stimulus from the Federal Reserve as major growth drivers. Home sales rebounded to the strongest level in five years in 2012, as home building bounced back to levels not seen since early in the recession. Near record low mortgage rates, rising home prices and a drop in foreclosures have combined to bring buyers back to the market.”
And in another sign of an improving housing market, both California home sales and prices posted gains in December, with the median price posting strong double-digit gains for six straight months, as announced by the California Association of REALTORS®. “Sales in December were up 0.8 percent from a revised 518,460 in November and up 0.9 percent from a revised 517,730 in December 2011. The statewide sales figure represents what would be the total number of homes sold during 2012 if sales maintained the December pace throughout the year.”
Mayor Ed Lee last month issued the following statement on San Francisco’s unemployment rate dropping below seven percent in September, based on preliminary unemployment numbers released by the State Employment Development Department (EDD):
“When I first came into office in January 2011, San Franciscos unemployment rate was 9.6 percent; today it was announced that for the month of December 2012, it was 6.5 percent, the lowest unemployment rate since 2008. It’s a new year and we are experiencing a consistent improvement in our economy, yet we will not rest for the 30,900 San Franciscans who are still unemployed. I will continue to work with every business sector in the City to make sure we continue to support policies that grow jobs and put San Franciscans back to work.”
According to the EDD, San Francisco County registered the third lowest unemployment rate (6.5 percent) among California’s 58 counties as of December 2012. Jobs located in San Francisco County increased by 4.3 percent on a year-over basis as of the second quarter of 2012, according to the Bureau of Labor Statistics. That ranked the county 15th in performance out of the 329 largest counties in the nation and represented a year-over job expansion of about 26,000 jobs.
Article from the San Francisco Association of RealtorsRELATED CONTENT