There is a lot of talk about where the San Francisco residential real estate market is going. This month is consistent with the rest of this year - so far the trend is still up, although the pace of appreciation has slowed from last year. June 2016's median price of $1,235,000 for all types of properties is up 5% from last year. As is characteristic of the summer months, this is a dip from the Spring, but not as much of a dip as last year (only $15,000 down, as opposed to $50,000. And condos/TICs/coops are recovering from the perception of a dip earlier in the year; they are up 7% from last June. Single family houses, which shot up faster in the Spring have moderated, up $3.8%. Thus, our market remains strong and steady even if there may be opportunities for buyers that they did not have six months ago.
We are certainly still in a seller's market, just not the extremely overheated seller's market of a year ago. For example, the median days on market for all properties (20 days) is higher than a year ago but the overall trend in that category is not an indication of any kind of "crash"; the national average is 65 days. Inventory is down 6% from last year, reversing the trend seen recently. The number of properties with prices reduced from the initial listing price has risen from 13 to 19% year over year, indicating that the pace of appreciation is not accelerating. But, for perspective, the "supply" -- the number of months it should take to sell all the property on the market -- is still below 2 months, when a seller's market is considered anything less than 6 months. Again, all indications are that property in San Francisco is still very desirable and moving fast by any standard measure.
2-4 unit building sales showed a small increase to $1,660,000 median price, up $30,000 from last year. Days on market was essentially unchanged, at 35 days. Again, steady but slower appreciation and no flood of inventory as usually occurs if sellers believe that prices will go down soon.
Statistics for the different geographic districts clearly show that, although the market has slowed from last year, it is still quite healthy, but with significant variation across the city. For example, rather than double-digit increases, no district increased over 10% except for District 3 in the southwest corner of the city (up 10.8%). But District 5 (Castro, Noe, Haight) and 10 (Bayview, Portola, Excelsior) surged over 9%. Most of the city saw more modest appreciation: (District 2 (Sunset) up 3.6%, District 4 (west of Twin Peaks) up 4.5%, District 6 (Hayes Valley, Western Addition, Lower Pac Hts) up 5.3% and District 9 (Mission, SOMA, Potrero, Bernal) up 4.6%. But three districts declined including District 7 (Marina, Pac Hts), down 11.5% but still by far the most expensive at a median price of $2,005,000. Also declining were District 1 (Richmond) down 7.5% to 1,475,000 and 8 (Downtown, Russian and Nob Hills, Civic Center) down 3.9%. (All district statistics are rolling 3 month averages to mitigate for small numbers of sales in any particular month, with percentage changes year over year.)
What does all this mean? In this period of transition -- from a super-frenetic market where seemingly everything sells for way over asking in mere days, to a more steady market where sellers cannot rely on desperate buyers -- you need the advice of a professional. When you are ready to sell you need to make sure your property stands out through precise and compelling marketing, perfect presentation and informed advice along the way. To find the property you want you need an agent that knows the current market and pays attention to all the risks. My critical legal mind, in-depth experience and fantastic team of professionals is crucial. Contact me if you or someone you know wants to discuss real estate. More statistics, updated constantly, are at www.danslaughtersf.com.
New Housing Pipeline
San Francisco is engaged in a healthy public debate about whether we can build our way out of the housing crisis and if so, how and where that building should proceed. To inform us, it is helpful to keep an eye on what is already under way and planned.
Actually under construction and sure to make a dent in the housing market over the next year or two are a total of 5,153 condominium and rental apartment units (not including single family houses, which are essentially all replacements of existing houses). 3223 of those are rental apartments, concentrated in SOMA (2164 apartments) and Dogpatch (701). The condominiums total 1930 units, most of them in Mission Bay, northern neighborhoods (Cathedral Hill, Western Addition, Pac Hts), Hayes Valley, SOMA, Potrero and Hunter's Point. Note the areas where there is little or no building right now -- Mid-Market, Mission, southern and western neighborhoods.
An amazing 37,186 units (both rentals and condominiums) have been approved (although of course plans change and not all of those may be built). The vast majority of these are in three big developments on the edges of the city that will take decades to complete - Hunter's Point with almost 11,000 units approved, Park Merced with almost 9,000, and Treasure Island with another 8400. The only other areas with more than 500 units approved are Dogpatch, Potrero, Transbay, Tenderloin and Visitacion Valley. Again, some of the flash points of housing debate, like the Mission, do not have major approved projects in the works. Of course, there are proposed projects for virtually all areas, but those statistics are not very useful as the planning process typically involves major changes or even collapse of many of these projects.
Knowing what is already planned is the first step in understanding how to shape the process going forward. Lots of other statistics on new construction projects is here.
What is BRT?
Certainly San Francisco needs to move more people around faster as the city grows. Dedicated rail lines, especially those that do not have to interact with vehicular traffic (like subways) can move faster and on a set schedule. The city has committed to studying ways to expand our current Metro system. But rail is expensive and disruptive to build. So transit planners also use BRT - Bus Rapid Transit - solutions to move bigger buses faster on our roads. The basic idea is to set aside part of the roadway for buses only (sometimes allowing taxis as well) and then rework the streetscape to make sure the buses can load quickly and move quickly (often setting up traffic signal systems to favor the buses).
There are two BRT routes proposed for San Francisco. One, along Van Ness Avenue from just south of market to Lombard, is in the final planning stages and slated to include bus lanes that load from a reworked median and a host of streetscape improvements. The other is proposed for Geary Boulevard from Market to 34th Avenue. It is much further behind in the planning process and has met with significant opposition centering around loss of parking, removal of pedestrian bridges and the business disruption during construction.
We certainly need to do something to get people moving about the city quicker and BRT may be a useful part of the solution in an era of limited transit funds. Moreover, some of the improvements that BRT brings may make those corridors easily convertible to rail lines in the future. But we cannot study these solutions for decades - the Van Ness BRT has been in planning since 2001. Let's make a decision and get moving! Details here and here.