The Northside of San Francisco got pummeled in Q4 with prices being slashed across all market segments. The condominium market was down 200k on average, the median single-family market down 850k, and the luxury market down 2.5M. Only 29 sales across all property types closed & the unspoken data not represented here are the 98 listings that either didn't sell in Q4 or were taken off the market due to a lack of interest.

This might be the biggest dip in desirability in demand for the most historically desirable districts in San Francisco. The only other demand swing I have seen of similar magnitude was for the condominium market in downtown SF during the early days of the pandemic.

While buyers may seem out of the market, any given property can sell quickly if presented well.

The Condominium Market

It's safe to say, no one wanted a condominium in Q4. with barely 1/8 of the year’s sales landing in the 4th quarter, buyer demand drastically fell off after continual rate hikes and unrealistic seller expectations.

Given the condominium market is the first to feel the effects of rate hikes, you often see buyer demand fall off a cliff. That was highly evident in the Northside of San Francisco. Buildings with higher HOA fees saw almost zero demand in Q4. Of the properties that sold similar to the early days of the pandemic; views, outdoor space, and parking were sought out.

With so many listings being pulled in Q4, expect to see the majority come back this Spring with a new price & tapered seller expectation. Once sellers can meet the market pricing, expect to see a flurry of sales.

The Median Market

Unfortunately for single-family properties across the Northside of SF, homes seldom sold in Q4. 3 sales accounted for the entirety of market activity in Q4, with 10 properties either still active at the turn of the new year, or pulled off the market due to a lack of interest.

The avg. price dropped by ~$850k in Q4. Given the small subset of homes that fit in the median category (avg. sale price +/- $1M), this data is somewhat skewed. This market is massively undersupplied and notoriously content with more days on market than the city average. Homeowners know the value of their assets, and there is a location like the Northside.

With fluctuating demand, it's strongly advised sellers do everything they can to create a beautiful turn-key experience for buyers.

The Luxury Market

Similar to the median, the luxury market across the Northside of SF saw a decline in sales activity in Q4. The average sale price for a luxury estate dropped by $2,500,000, from 7.8M to 5.3M. Demand for luxury estates in San Francisco has seen a steady decline since the beginning of the pandemic market, but few quarters saw as drastic a swing as the one previous.

While buyers for these homes often aren't influenced by rates, savvy buyers will always leverage capital & the cost of capital has increased. San Francisco's attractiveness to luxury price point buyers has also taken a massive hit; corporations downsizing & opting for remote work has left C-level exec's assessing their need to be centrally located.

While the market will surely rebound, 'when' is anyone's guess.

Projecting Ahead To Next Month/Quarter

Although Q4 seems doom & gloom, the relative lack of sales data across all market segments makes it hard to project a similarly poor-performing quarter. All previously listed properties will more than likely still be seeking a sale, and with rates already trending downward, I wouldn't be surprised if there was a surge of transactions in Q1.

Sellers will need to meet the market price with their expectations. Now that buyers have stomached the rate increases for the better part of 2 quarters, coupled with the shift to rates trending down, expect to see a flurry of market activity for people trying to time 'the bottom.'

If you've been on the fence, now is the time to jump. There might not be a more opportunistic time as buyers currently hold all the cards in any given negotiation.