The San Francisco residential real estate market for Spring 2019 is really just beginning. The normal delay in January has been extended by the endless (albeit needed) rain we have been experiencing. So, really, there is no way to tell what the trend is yet. But we can look at the early results for January and February and make some educated guesses as to how the year will unfold.
So far this year, the market is down statistically, with the median price for all properties standing at $1,259,500 in February, down 3% from last February. Condominiums/TICs/Coops were actually up a bit (4.1%) but single families took a dive. This may be a result of houses that had been on the market through last Fall's very slow market finally selling at reduced prices. But we also have to remember that Spring 2018 was the highest median price ever, so this Spring must be another record sales season to be "up."
There are also countervailing statistics. Inventory - the number of properties on the market - was down 11% from last February. This lower number of properties generally means higher prices as a set number of buyers compete for the available units. But the persistent rain may also have kept inventory down both because sellers know that rain is not good for marketing (spoiled California buyers stay inside instead of shopping) but also because rain prevents some properties from being properly prepared for sale (such as where exterior painting or landscaping is needed). Also, price per square foot was actually up 1.4% in February, so maybe the "down" market is actually just a result of a mix of properties that included more smaller ones than last year.
Anecdotally, the agent "buzz" at the beginning of the year was that the market had picked up as buyers were out in force and buying quickly and over asking, at least for the properties at the lower end of the market (below $2 million). And well-presented higher-end properties have also moved, although most of those are waiting for the heart of the season. Of course, market fundamentals like the continuing strong employment picture, interest rate decreases and the anticipated San Francisco IPOs all argue for further appreciation. But no one knows for sure and everyone is holding their breath to see how the market performs in March and especially April.
Want to know more about the market as it develops or about your particular house or neighborhood? Give me a call and we can talk about it. I'm never too busy.
District by District
Early district statistics show some bright - and not so bright - spots with no discernible trend yet. District 1 (Richmond) continued to perform well, up again in February for a year-over-year increase of 10.7% for a median price of $1,550,000. District 2 (Sunset) continued to fall behind its northern neighbor, falling 7.4% to $1,296,500. District 3 (in the southwest corner of the city) was also down over 7% and slipped below $1 million for the first time since March 2017.
The central part of the city was also a mixed bag. District 5 (Castro, Noe, Haight) surged 7.2% to a median of $1,680,000. District 4 (St. Francis Wood, Miraloma Park, West Portal and District 6 (Lower Pac Hts, NOPA, Hayes Valley) both fell (5.3% for median price of $1,515,000 and 2.4% for median of $1.2 million), putting District 5 once again well above its immediate neighbor across Twin Peaks and even further ahead of it's slightly more urban neighbor to the north.
The northside dropped precipitously. District 7 (Pac Hts, Marina) lost 11.7% year-over-year and was down below $1.8 million ($1,767,500). District 8 (Russian/Nob/Telegraph Hill, Downtown) almost 8% to $1,025,000.
District 9 and 10 on the east side of the city were a brighter picture. The former (SOMA, Mission, Potrero) was up almost 4% to $1,142,500 and the latter was flat remaining at a median price of $950,000.
Of course, these are preliminary statistics, but if they hold true for several months and if my own sales so far this year are an indication (all 4 of them were very fast, way over expectations and in line with these statistics) they tell a story of continuing desirability in the central and eastern parts of the city (with the Richmond as an exception to that rule), the desirability of easy access to transit downtown and Silicon Valley, and the gradual change in perception of what is and is not a "desirable" part of the city to live in. We will all be watching closely, of course.
More neighborhood statistics on my website here.
More Housing - But Where?
Senator Scott Wiener's housing density bill is back, now called SB-50. It pushes cities statewide to allow denser housing near transit stops and job centers. The idea is to help solve our housing crisis by allowing more people to live in smaller areas and to do so without requiring that they all get in a car to get to work - the opposite of the sprawl plan that ruled for decades in the Bay Area and the US generally.
One change in the new bill is to tighten restrictions on displacement of renters so those with modest income are not pushed out to make way for luxury apartment buildings. The job center addition is meant to force suburbs to add density near the large-scale office parks they approve. That should keep Silicon Valley from continuing to shift its housing needs to San Francisco and Oakland.
Here in San Francisco, the bill would encourage the replacement of some single family homes with small apartment buildings (the bill requires heights of 4 to 5 stories - not SOMA-style behemoths). That affects the single-family neighborhoods mostly on the westside but the change would be gradual over many years and would be concentrated on high traffic areas that are the target of the legislation AND the most desirable for development anyway.
Certainly any change to our beloved city should be considered carefully, but we must do something to build more housing here (and in the rest of California) or we will become even more of a city for only the rich (we are #8 now). We should talk about how and where to build but all of California must help with this problem and Senator Wiener's proposal deserves real consideration. A nice summary of the proposal is here.
SIGNS OF THE CITY
Although San Francisco is not a "neon city" like Las Vegas or Hong Kong, we have our share of iconic signage including the Ferry Building and Ghiradelli Square, both dating from the 19th century, and neighborhood landmarks like the Avenue in Portola, New Mission and beloved Castro theaters. Other important signs to note are listed here, and be sure to check out the Neon Speaks festival in April that will celebrate that bright sign technology (even though some of them, like the huge Coca-Cola sign that looms over the 80 freeway, have been replaced with energy-efficient LEDs).