With March numbers in the San Francisco residential real estate market is best characterized as strong and steady. Smaller price increases than we have seen in the last few years indicate a leveling market that is still robust. But inventory remains a concern; many fewer houses for sale means that very attractive properties in the best locations are still going for significantly more than they would have last year, even if there is no "frenzy" for "just anything."
For all properties, sale prices were up 4.3% (year over year) to a median price of $1,225,000. Condo/TIC/coop prices continued to rise faster than single family homes, with the latter essentially unchanged from last year at a median of $1,350,000 while apartments were up 5% to $1,150,000. Inventory has collapsed, down 27% from last year (1100 listings versus 800) with almost 33% fewer single family homes for sale. The median days on market was unchanged from last year, at 18 days. Unless more listings come on the market in April, even with some cooling in buyer demand from interest rate increases and political turmoil, the pressure on home prices will force another uptick.
But the market is not as over-heated as before. The number of properties selling at over the list price has moved down to 67% this year, versus 73% last year. This certainly helps sellers in pricing and buyers in setting offer expectations which should lead to more rational negotiations, if there is anything to sell!
2-4 unit buildings diverged from other types of property. Although the median sale price was up 3% to $1,649,500, apartment buildings remained on the market much longer (23 versus 19 days) and inventory actually increased slightly. With only one month showing that inventory it should not be called a trend, but if that continues, prices should moderate. As always, small numbers of 2-4 unit sales skew these figures, as well as the fact that many sales of apartment buildings (and other commercial properties) are not reported through the MLS.
The ten different real estate districts continued the trends we saw in February, with a few exceptions. District 1 (The Richmond) once again moved up, with a median price 14% higher than last year ($1,498,889). And its cross-park rival, District 2 (the Sunset), lagged, increasing 3.9% to $1,200,000. That is the same as District 6 (Hayes Valley, NOPA, Lower Pac Hts). District 5 (Castro, Noe Valley, Haight, Glen Park) also increased again, up 13.5% to a median price of $1,697,500, chasing the most expensive area, District 7 (Marina, Pac Hts, which was down again by 10.9% to $1,802,000).
District 4 (west of Twin Peaks from Diamond Heights to Ingleside Terraces) was the other big loser, down 7.3% to $1,325,000. District 9 (SOMA, MIssion, Bernal) was down again, but only slightly this month (-0.2% to $1,0097,000 and District 10 (Bayview, Excelsior, Portola) was up again (5.8% to $820,000).
District 3 and 8 are the big differences from last month, essentially trading places. District 3 in the southwest corner of the city (Stonestown, Lake Merced) was unchanged year over year, falling below $1 million ($967,500) after a surge last month that put it way over that mark. District 8 (downtown, Civic Center, Nob & Russian Hills), after falling below $1 million, surged 18.4% to $1,140,000. (All district statistics are three month rolling averages, to mitigate for low numbers of sales.)
The Spring trend appears to be steady appreciation, but no blow out up or down. Of course, individual neighborhoods and properties do not always fit this model. If you are thinking of making a move, or just curious about the market, give me a call so I can analyze your specific situation and use my experience and skills for you.
San Francisco Rent Control - What You Need to Know
Everyone agrees that San Francisco's rent control laws have an out-sized effect on housing here. In general, rental units built before 1979 are covered by the law, meaning that the amount of rent increases is set by the city for existing tenants. There is no rent control for most all single family homes or condominiums but they are still subject to eviction control measures which prevent removing tenants except for certain reasons, like failure to pay rent. Of course, the law is far more complicated than this simple summary, so any specific issue should be examined with an attorney's help.
Recently two rent control issues have been in the news. First, the city's attempt to discourage Ellis Act evictions suffered another blow. The Ellis Act is a state law that allows landlords to evict tenants (including from rent-controlled units) if the landlord wants to go out of the rental business. On March 21, the intermediate Court of Appeal agreed with a 2015 trial court ruling striking down an ordinance from the same year that the city passed to discourage Ellis Act evictions. The ordinance would have required landlords that take advantage of the Ellis Act to pay up to $50,000 to tenants. The reasoning behind the law was that evicted tenants would have to pay far more than their controlled rent for replacement apartments, and that the landlord should make up the differential. The appellate court rejected this result, reasoning that the differential was not caused by the landlord's actions, but by the market in the rent-controlled area. We will see if the city appeals that decision to the California Supreme Court.
Second, state lawmakers (including David Chiu from San Francisco) have introduced a bill to repeal the Costa-Hawkins Act. The Act prevents rent control measures from being imposed on new construction, defined to mean anything built after 1995. The aim is to extend rent protections to more tenants; as time goes on and new buildings go up, more and more of San Francisco's housing is exempt. But, of course, developers argue that repealing the law will make new apartment building construction riskier, preventing new construction and ultimately driving up rent rates as growing demand outstrips supply. We will see which side of the argument prevails.
Time to Take Off!
Many San Franciscans moved here from elsewhere and retain family and friends from across the world. And our economy is intertwined with the rest of the world also. That means we like to (or have to) get away and, since California is way out on the edge of the continent the first step of the trip is often to an airport. In the past year there have been a lot of flights added or announced from SFO, including new flights to Munich, Zurich, Manchester, Reykjavik, Seoul, Berlin, Helsinki and lots of new domestic routes including to Kalispell, Montana. Oakland Airport will soon add a nonstop to Copenhagen and a new airline (Level) flying to Barcelona. These connections are important; they draw us closer to the rest of the planet and give us the ability to see new places, experience different cultures and just live. So, take off as often as you can and bring back to our city news of your adventures. Check out other nearby airports and new routes here and here.
Tax Day - Postponed!
We all know that taxes are due to be filed every year on April 15. But this year the deadline is Tuesday, April 18. Why? April 15 falls on a Saturday so it makes sense that the deadline would roll forward to Monday. But Monday, April 17 is Emancipation Day (normally April 16, but moved up to Monday) in Washington, DC. (Emancipation Day celebrates Abraham Lincoln's 1862 proclamation freeing the slaves in the district, nine months before the broader Emancipation Proclamation covering all the Confederate States. The Thirteenth Amendment to the Constitution, ratified in 1865, freed all the slaves in the United States). Since IRS agents will be on holiday, tax day is moved up a day to April 18. California's tax deadlines follow the federal rule. So you have three extra days this year to sweat over your filings!