San Francisco single-family homes have traditionally sold for over the list price, with 25% or more representing a significant overbid. There have always been the random outlier sales popping up for 40% or more over asking. But April sales emphasized buyers’ willingness to go above and beyond tradition.
But the average citywide overbid in April was 19%, with more than half of all sales clocking in at 25% or more over asking. More notably, 24 of the 240 houses sold changed hands for 50% or more over list price.
A look at the single-family selling pattern in 2022 points to a growing gap between list and sale price. Listing agents and sellers are reviewing comps and selling patterns, observing several examples of giant overbids and attempting to replicate the same strategy.
The Sunset/Parkside, for example, has a 34% average overbid, and sellers can almost count on that level of overbidding (or much more). A quarter of house sales in this part of town saw 50%+ overbids in April. That’s enough to convince sellers of a remodeled, three-bedroom house to list for $1.4M—with the promise of multiple offers and a sky-high price.
And guess what? Buyers see the same selling pattern, and they calculate that offering hundreds of thousands of dollars over list price will help them “win” the property. Rising interest rates and continued real estate appreciation are also motivating buyers to get in now before conditions become more challenging for them financially.
The list-low, sell-for-more pricing strategy will most likely always prevail in San Francisco single-family home sales. If you’re a future home buyer, it’s key to get a handle on the actual value of the type of property you’re seeking. For example, that 3BR/2BA, 1700 sq ft Sunset/Parkside home costs an average of $1,950,000. So if you see it offered for a significantly lower list price, you can bet there’s a seller who’s expecting closer to $2M. (For example, the modest home at 1819 40th Avenue in the Outer Sunset pictured above went on the market in mid-February for $1,395,000 and closed in early April for $2,210,000.)
As I’ve said before, don’t depend on the list price to guide your search.
[Photo courtesy of Coldwell Banker Realty]