September's numbers are in. Predictions of a precipitous decline in the market or a bursting bubble appear to have no basis, although it is fair to say that most San Francisco properties are not selling in the frenzied atmosphere we have become accustomed to in the past several years. We will haver a better idea of the market's direction next month and at the end of the year - September's numbers reflect mostly August sales, one of the slowest months of the year.
What has happened since the end of the Spring Market in May? At a macro level, we hit a new record median price in June of $1,430,000 (for all properties) and stayed very close to that level through September. This is a bit unusual, because the Summer usually sees some decline in prices as properties that did not sell in the Spring finally sell at a discount. Will this stability continue throughout the Fall market or will we see a dip like last Fall?
In September, single family homes were up 2.7% (to $1,540,000) from last year after falling from June's record of $1,750,000. Condo/TIC/Coop sales, by contrast, were up a dramatic 15% year over year in September to a new record of $1,325,000.
Inventory - the number of properties for sale - is often used as an indicator of the future of the market. The idea is that inventory increases when buyers are not willing to pay the top price and sellers nevertheless wait for just that. September's inventory was substantially up from the Summer months, which is normal, but actually 9% down from last September. Talk in the agent community about a flood of new properties for sale simply did not come to pass - at least not yet and not across the board. Similarly, the number of actual sales fell over the Summer (again, a normal seasonal change) AND was almost 7% lower in September year over year.
What about active properties in September? Although no statistics are available yet, it appears that at the lower end (below $2 million) most properties are still selling quickly at prices at or above last year and those that check all the boxes are drawing significant overbids. At the higher end of the market, some properties are taking longer to find a buyer and there have been some price reductions. This all makes sense as the demand is still very strong at the lower end, but significantly fewer buyers can afford over $2.5 million AND those buyers generally are making a discretionary purchase. We will await the October and November statistics to see where the market is going but all indications are that it is still a strong sellers market albeit with more predictability for buyers. Some more specific neighborhood Quarter 3 statistics are below separated for single family homes and condo/TIC/coops. Or go to my website www.danslaughtersf.com or just ask me!
The Hub Takes Shape
The Hub is the city's name for the area centering around Van Ness, Market and Mission. Plans are for several residential towers, taking advantage of ready access to transit and providing housing for Mid-Market business workers. The first big building at 1500 Mission is topped out at 39 stories, slicing through the sky with a shiny interesting design. But what goes at Market and Van Ness? The city is now proposing 600 foot buildings for those sites and their development is crucial in creating a neighborhood that truly is a hub. More details here.
Statewide Rent Control
California has a new rent control law that covers the entire state. For San Franciscans, the new law (which sets rent increases at 5% plus inflation per year and restricts evictions to those based on "just cause") does not apply to those units already covered by the city's stricter ordinance. But it does apply to rentals in buildings built between 1979 and 2004. Exemptions include single family homes, condos, and duplexes where the owner occupies one unit, unless they are owned by a REIT or corporation. There are lots of other details to the new law, so if you are a landlord or tenant - or are thinking about being one - you should familiarize yourself with the new rules and/or consult an attorney. More information here.
Fall heralds the end of Summer and the coming Winter. And what better marker of that than the colorful displays of leaves turning from green to flame. Autumn tourism is often associated with Vermont or even Japan, but we have great leaf-viewing opportunities right here in California with our varied geographies and climates. So consider a mid-Fall break to the mountains or one of our state parks. A map and other information is here. Happy Autumn!