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May 16, 2016

Buyer Pool for 1BR Condos Smaller, But Strong

One-bedroom condos generally have a smaller buyer pool in San Francisco. Empty nesters, investors, single people or couples are typical buyers, with the latter two groups being first-time buyers looking to get their foot in the homeownership door.

But there’s certainly a strong market for a one bedroom, especially if it’s in a prime location and has all the amenities. I’ve been watching this segment of the market for a while now, as I have a beautiful one-bedroom condo listing at 1818 Broadway #306. And I was not surprised to find that prices are climbing for one bedrooms; in some cases, buyers are getting into extreme overbidding at very high price points.

The average citywide price, year-to-date for a one-bedroom condo is $838,714. Of the 220 such units sold, 39 had price tags in excess of $1,000,000—most commonly in South Beach, Pacific Heights, and Russian Hill. Mother of them all was 2200 Pacific #11B, a renovated, two-level unit with 2.5 baths listed for $2,125,000 and sold last month for $2,900,000—a whopping 36.5% over asking.

That buyer joins a club of elite one-bedroom condo homeowners who have paid more than $2,000,000 for their properties. There have only been a dozen others in MLS history, with the most expensive being $3,000,000 sold in 2014 at the Millennium.

What drives buyers to pay a premium for a one bedroom? The triggers are location, views, appealing architecture, high-end remodeling, new construction, and elevator.

You can find more affordable one bedrooms (up to $700,000) in buildings/neighborhoods like 601 Van Ness, 5800 Third in Bayview, Oceanview Terrace in Ingleside Heights and Red Rock Way in Diamond Heights.

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