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July 9, 2020

The Corona Effect: West Side Homes Soar, Condos Soften

We’ve just wrapped up the second quarter of what has been a tumultuous 2020 so far. But even amidst a recession, home buyers and sellers in San Francisco continued doing business over the past three months.

Here’s a snapshot of how our single-family and condo markets did in Q2 2020:

Single-Family Homes: Buyers Head West
All areas of the Sunset and Parkside have steadily become magnets for home buyers over the past couple years. But things have really amped up lately. Working from home, a need for office, kid and outdoor space and no longer needing to be near tech shuttles, downtown transit and freeways have been significant factors that have led buyers west.

The once too-remote Outer Sunset/Outer Parkside neighborhoods now have an average Q2 price of $1,400,000. A 1,500-square foot three-bedroom house on 47th Avenue and Irving listed for $1,495,000 attracted 15 offers and sold for $1,900,000 in an all-cash transaction. Take that, corona.

Volume continues to be down by about half compared to Q2 2019. But interestingly, the average price of a single-family home is up slightly from $2,175,000 in Q2 2019 to $2,200,000 for this quarter.

Pricing has been more transparent, with a smaller gap between the list and sale prices. However, 73.5% houses changed hands for more than asking.

But there weren’t any obvious overbidding hotspots, as only 14% of all houses sold in the second quarter saw overbids of 20% or more.

If there’s a weakness in the condo market, it’s units in larger buildings that have no connection to outdoor space. One bedrooms are particularly vulnerable right now, as they often can’t accommodate home offices. Neighborhoods like Mission Bay, SoMa and South Beach are seeing most sales come in under or at their list prices.

The average condo price citywide is $1,324,000, which is a three percent drop over the Q1 average price. And volume is down by 57% year over year.

Buyers are still largely paying more than asking; a total of 66% of all condos sold for above their list prices. But the days of condos closing for 20% or more over asking may be disappearing. Only seven of the 349 condos sold did so for more than 20% over the list price.

There were 38 condos that sold for more than $2,000,000, and most closed for at or under their list prices.

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