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September 12, 2016

Summer Market Wraps Up, Sets Tone for the Fall

It was a summer of withdrawn listings, buyers flocking to single-family homes and rising one-bedroom prices. Though San Francisco real estate was a little slower this summer, there were a number of takeaways that I think will set the tone for the busy Fall season:

Prices remained strong for houses and condos. The average price for a house in the June-August timeframe was $1,695,454, and around $1,200,000 for condos.

Houses were hot. If you had a house to sell in San Francisco this summer, chances are you did pretty well. Almost one quarter of all houses sold this summer changed hands for more than 20% over the list price, and 17% of all houses sold were paid for in cash. I’m aware of at least a dozen houses that ended up getting 25+ offers in neighborhoods like Bernal Heights, Glen Park, and other popular areas.

Days on market jumped for condos. It took an average of 38 days for a condo to sell this summer—46% longer than in the summer of 2015.

Withdrawn condo/loft listings spiked. Sellers withdrew or temporarily removed 200 condo/loft listings from the market over the summer, compared to only 78 in the summer of 2015. The highest concentration of withdrawn units were in the Van Ness/Civic Center area, along with Mission Bay, Inner Mission, Yerba Buena and South Beach. Expect many of those 200 units to return to the market this Fall, boosting inventory and giving buyers more choices.

Off-market sales were quiet. Only a small percentage of sales happened outside the Multiple Listing Service (MLS). This is most likely because there are fewer buyers out there in the quieter summer season, and agents/sellers may have (rightfully) figured that they’d benefit from reaching as many prospects as possible through the MLS. Sixteen single-family homes sold at an average of $2M, and only 36 condos for an average of $1.3M.

The average price of a 1BR condo is almost $1M. The summer was a good time for sellers to put their one-bedroom condos on the market. The average unit sold for $815,525, which translated into just over $1,000/square foot.

The tide turns for the Millennium Tower. The news broke in early August about the luxury building’s alleged sinking and tilting, and related lawsuits in the works involving the HOA, developer and city. The last closings recorded were at the end of July, and that seemed to be when buyers put the brakes on further purchases. Eight listings are currently on the market, ranging in price from $975,000 to $3.6M.

The luxury market remained steady. Similar to the summer of 2015, only a small percentage of condos sold hit the $2M+ mark. At the top of the condo heap was the three-bedroom unit at newly built The Pacific on Webster at Sacramento, which sold for $8,960,000 ($3,750/sq ft). A quarter of the buyers who purchased single-family homes this summer paid $2M+—up from 21.5% last summer.

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