August sales typically don’t break any records, and last month was no different. The condo market rolls into the Fall with lackluster year-over-year volume, median price and overbidding percentages.
Volume this past August (206 units sold) dropped 31.7% from August 2021 (302 sold). The first explanation that comes to mind for this activity, of course, is that higher interest rates have dampened buyer motivation. But another more equally important factor is that the initial pandemic-related movement has calmed down and we’re seeing a return to more normal August volumes. Indeed, August 2019’s pre-pandemic sales total was 195 units, closer to this past August’s level.
The median condo price fell from $1,173,000 in August 2021 to $1M—a 14.74% decline. Similarly, price per square foot is down 8.6%, with the average moving from $1,132 in August 2021 to $1,034.
Here’s a quick breakdown of our condo categories:
1BRs | 77 sold | $765,000 median price
2BRs | 85 sold | $1.2M
3BRs | 31 sold | $1,550,000
It’s worth noting that the number of sales and median price have remained consistent over the past two quarters of 2022. Each quarter saw an average of just under 700 units sold at a $1.2M median price. I would say that August has been the weakest month of the year, which again is no surprise given that our market can be very seasonal. It’s important to acknowledge the usual summer slowdown before we slam August too much.
Buyers unsurprisingly pulled back from big overbids last month. Contrary to August 2021 when 25 condos sold for 20% or more over asking, there were only five units that sold for that much over the list price. The average citywide overbid was less than one percent, meaning many units sold for roughly around or below asking.
There’s always one that bucks the trend, though, and that was 624 Fillmore #3 in Alamo Square. The spacious condo in need of a facelift was listed nowhere near its value at $995,000 and closed for $1,425,000. (Photo above, courtesy Compass)
Buyers looking for deals will find them in the $2M+ luxury market. Of the dozen condos sold in this price range, eight changed hands for under the list price. At the top of the heap was the corner unit with floor-to-ceiling north- and east-facing views at 181 Fremont #62A in Yerba Buena. Originally listed for $5,067,000, the sale closed for $4.2M. Here’s a look at those views (photo courtesy Compass):
The Upshot: The market has stabilized in the wake of interest rate hikes and Covid-related movement. But don’t let the less robust, seasonal August activity fool you. Condos in desirable locations with all the amenities are selling briskly and the Fall inventory gates are wide open.
Sellers: It’s not currently a seller’s market where condos are concerned. Not every condo will go into contract immediately, and sellers need to be patient and willing to negotiate (especially if the condo has been on the market for a month or more).
Buyers: This is a great time to get off the sidelines and jump into the market. If your budget is $2M or more, there is certainly room to negotiate with motivated sellers.
[All data courtesy of the San Francisco Multiple Listing Service.]