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October 5, 2023

SF House Market Report: September 2023

2824 Scott Exterior

September ushered in the fall real estate selling season, and I have a few takeaways after working and talking with colleagues over the past month.

First, transactions are more challenging these days. Insurance remains an issue, buyers are not happy with 6.5%-7% interest rates and lenders are scrutinizing buyer financials like never before.

Second, there aren’t enough qualified buyers willing and able to purchase all the high-priced inventory on the market. The average price of current listings available is $3.4M, but the actual average list price of homes that are in contract is $1.4M. That’s a big disconnect.

Here’s what went down in September:

Volume check: September showed a 22% year-over-year (YOY) volume dip, with only 137 closed sales.

Median price: September’s median price ($1,562,500) was 5.5% lower than that of September 2022 ($1,650,000).

Most homes sold for more than list price. There were 89 above-asking sales, with 23 of those closing at 20% or more over the list price.

But buyers aren’t throwing money at every home. A quarter of closed September sales changed hands for under the list price. Case in point was 152 Marview in Midtown Terrace. The 3BR/1BA, 1,100-square foot home was built in the 1950s and featured a large garage and concrete yard. It was first listed in May for $1,768,000 and ultimately closed last month for a much more realistic $1,235,000 after a series of mind-numbing price reductions.

Luxury buyer activity is still flat. Only 13 homes sold for $3M or more in September, with four of those closing for above list price. Top of the heap was 2824 Scott, a “classically rebuilt” six-bedroom home spanning 7,400 square feet in Cow Hollow. First listed in the Fall of 2022 for $19M, the home closed last month for $16,375,000. (Photo above courtesy Compass)

Inventory check. There are 414 homes on the market at an average list price of $3.4M, and 177 sitting for 30+ days at an average list price of $3.9M.

But $3.4M+ is not where most homes are selling. The 180 homes currently in contract are showing an average list price of $1.4M.

Pro Tips:
If you have a luxury property on the market, you may have to exercise patience when it comes to finding a buyer. Make sure you’re doing everything possible to present your home in the best light.

Buyers: If you’ve been preapproved and had a change in employment since the initial consultation, circle back with your lender to see if that change will affect your preapproval status. Lenders don’t like change.

[All data courtesy of the San Francisco Multiple Listing Service.]

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