The San Francisco real estate market experienced a shift towards normalization in Q1, moving away from what we typically see in SF; multiple offers, properties selling way over asking price. This has resulted in homes sitting on the market for longer, and some not selling at all.

Properties that are well-presented and priced correctly are still in high demand and will move quickly, but anything less-than turnkey and priced according to the old 3% rate market rather than the current rate environment will sit on the market significantly longer. There is an affordability issue in this higher rate market, especially for lower-median priced homes, as buyers in these price points are heavily rate conscious. Pricing strategy is more important than ever.

‍Condo Market

Condominium sales in the Northside of San Francisco have been reeling since rates increased. Total sales are down, price per foot is down, and it's taking double the amount of time to sell.

$sqft is dramatically more relevant in the condominium markets than single-family homes and can be generally used to assess the desirability of the condo market when comparing periods.

$1170/foot in Q1 '23 over 23 sales vs. $1324 in all of 2022 over 194 sales is a compelling statistic. Yes, the market is down, but there is still a market of turnkey, desirable condos.

We've seen affordability be massively affected in recent months, and buyers in the condominium market are typically most affected by increased rates.

Median Market

The median housing market on the Northside of San Francisco saw only 1 property sale in Q1 of '23.

The single sale did close > $1M above market average for $5,550,000M, however. The caveat, it sat on the market for 189 days, highlighting a significant pull back in market activity, and the need to price strategically and present a turnkey property.

North Beach, Russian Hill, The Marina, Cow Hollow do typically see less single family home sales that surrounding areas, but 1 sale over the entire quarter is much less than expected.

Luxury Market

The luxury property market in the Northside of San Francisco saw one massive sale in Q1, a testament to the fact there is always a buyer for beautiful, luxurious homes in San Francisco. This $2,200/foot sale moved in just over a month and sold for nearly $2.2M above the 2022 luxury property average.

Luxury markets operate differently to the median and condo markets as buyers are often sophisticated buyers with differing motivations; some are seeking trophy properties in cash during the downturn, others are consciously monitoring the monthly carrying costs of leveraging the bank for real estate assets and deciding it isn't worth the cost.

Luckily, this pocket of the city is home to some of the most beautiful homes in the entire state, and will always generate buyer interest.

The general theme of macro-economic activity is more-of-the-same. We're seeing a steady diet of stress events like Silicon Valley Bank's collapse and the sell off of others, First Republic flailed for a moment which caused the entire real estate market to hold it's breath (FR is San Francisco's leading residential mortgage lender), and tech companies are laying off employees and axing non-revenue generating business activity, all typical during periods of tightening. Also, the fed raises rates again at the turn of Q2 by 25bp and plans of doing this a few more times.

However, and this is a BIG however, California is a sunshine state. People don't go to open houses in the rain (we're ridiculous, yes). With the sun back out, I wouldn't be surprised if we saw a flurry of activity.

Learn more about Northside San Francisco

If you have any questions, text me.

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