The San Francisco real estate market is very competitive right now. I’m hearing anecdotes among my colleagues of crazy multiple-offer situations in the double digits—24 offers here, another 16 offers there. Unless you’re a buyer with all cash who catches on quickly, you’re writing offers on a routine basis and hoping a seller accepts one of them.
Why is this all happening? Some of these properties admittedly have it all, from a popular location to a “done” interior. But some are just run-of-the-mill homes that probably wouldn’t be getting that much attention were it not for the lack of inventory in the city right now.
There are only 164 houses and 171 condos available as of this writing, which isn’t many when you consider how many qualified buyers there are in San Francisco. When you have so few properties available and such high demand, it’s a perfect storm for groups of buyers to converge on a handful of homes.
When you start breaking those numbers down by price and amenities, the inventory shrinks further. Need parking? Ten percent of the houses and 13% of the condos don’t have it. Can only afford up to $1M? Half of the houses and 42% of the condos are listed up to $1M. And our “list low, sell higher” pattern in San Francisco means that properties priced near or at $1M will likely sell for more.
The good news is that I believe many homeowners will be motivated to sell in Spring. That’s typically the time of year that inventory spikes. One look at sales from the first quarter will convince potential sellers to take advantage of the market.
If you’re a buyer, hang tight. Keep writing the best offers that you can write, and be as flexible as possible when it comes to your preferences and neighborhoods. I’ve been selling real estate since 2002, and have experienced the various market cycles. We have a bit more time on the low inventory cycle, but that will change.