The past quarter was inarguably the turning point for the San Francisco real estate market, with prices hitting year-to-date highs.
Buyer demand continued to increase, but housing inventory didn’t. As a result, most well-priced properties attracted multiple buyers, many with large down payments or all cash. A significant number of sales resulted in prices that were hundreds of thousands of dollars above list prices. As of this writing, single-family home prices were up 14.6% from the second quarter, with condo prices also increasing by 13.6%.
We’re now used to seeing offer dates set by listing agents and sellers even before the first open house is held, which means sellers are assuming they’ll have multiple buyers interested right out of the gate. As a result, it’s more critical than ever for serious buyers to be fully preapproved for a loan prior to visiting properties. The ability to make decisions quickly is key.
Lenders continue to scrutinize every aspect of a transaction, and appraisals can still take far too long to schedule and get through underwriting. But there have definitely been less “back on market” occurrences, and the majority of sales are closing successfully.
Sales in the luxury markets were brisk, with more than a dozen sales in the $4M+ range. Even neighborhoods like Eureka Valley got into the act, with two homes selling in this range and effectively bringing average sales for the quarter to an unusually high level.
Inventory is steadily increasing as we head into the fourth quarter, helping to scatter buyers a bit so they’re not all swarming around a handful of homes. I’m expecting healthy activity through mid December, until the industry slows down for the holiday season.