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April 4, 2011

SF Market Snapshot: Q1 2011

The first quarter of the year is under our belt, and it’s a good time to evaluate the San Francisco real estate market.

I’m not the type of Realtor who sugarcoats my industry. Though lots of homes are selling in the city, let’s face it: We’ll never see the go-go years of the mid-2000s again. Lending is a whole different ballgame, and there are simply less buyers who can qualify for mortgages.

Many individuals are electing to spend hefty amounts of money per month on rents that will let them live in the neighborhoods they like, without needing top credit scores or 20% down for a comparable owned property.

The job market is better than it was a couple years ago in The Bay Area, with tech companies like Apple and Google hiring and others opening headquarters in San Francisco. (And Peninsula tech shuttles are still the hot mode of transportation for Silicon Valley works who insist on living in southern neighborhoods like Noe Valley and Mission Dolores.) But it will take longer for other industries to catch up and offer high-paying positions to large numbers of individuals.

Buyers and sellers, however, are doing steady business in the city. A total of 468 houses sold in the first quarter of this year, at a rather high average of $927,008. 109 of those houses sold for more than $1M—and 38 even changed hands for more than $2M—but the rest were under the $1M mark. That tells you that the sweet spot of the market continues to be the tried and true $400,000-$800,000 price range.

There were 477 condos that sold for an average of $696,326, with the most expensive being a unit in One Rincon for $2M. Again, the bulk of condos sold were less than $1M, with a condo in Bayview selling for as little as $108,000.

The withdrawn/expired segment was somewhat consistent with the first quarter of 2010, though the 433 houses and condos that sellers pulled from the market was a slightly higher number than the 428 withdrawn or expired properties in Q1 2010. I’m guessing that many of the sellers in this category are still disappointed with the current values of their properties, and have decided to take the “I’ll-sell-if-I-can-get-$X” approach vs. selling for what the market will bear.

There are currently 631 condos and 560 single-family homes available, with 372 condos and 398 houses in contract. Surprisingly, a modest number of those homes got into contract via multiple offers. However, in those cases, the strategy involved setting a list price below comparable values. That still seems to lure buyers in, particularly with properties that have central locations and independent parking.

It’s important for homeowners who are considering selling their properties this year to pay close attention to the comparable sales from the first quarter. These sales are the ones that will genuinely dictate where the market is at the moment.

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