The Richmond District had another challenging quarter with all market segments taking a hit. The condominium market saw only 17 sales (~35 per quarter in a regular market) & median single-family homes were down nearly $275,000 per sale.

The dip in demand seen in Q4 is following a similar trend we saw as rates began to increase toward the end of Q2 and throughout Q3. Buyers at lower to median price points are the most rate conscious, and the drastic swing in affordability is massively affecting the market. Of the few luxury properties that sold, prices remained mostly consistent with 2022 as a whole.

As we know, any given property can sell quickly if presented well, however, the seller's expectations will need to drop in order to achieve a successful sale.

The Condominium Market

The condominium market saw 17 sales in Q4, a far cry from the 35-40 we've been accustomed to seeing in regular markets leading up to today. While prices remained mostly steady at $1,210,000 (~100k drop from Q3), the time it takes to sell a unit is steadily increasing.

The biggest statistical drop off for this market segment was the price per foot buyers were willing to pay, dipping below $900/foot for the first time since 2019.

With condominium buyers being the first to be affected by rate increases, it's not farfetched to think that the Richmond District actually faired quite well considering recent macroeconomic challenges. There are plenty of buyers willing to pay a fair price for a home in this neighborhood.

The Median Market

The median market in the Richmond District took the biggest hit out of all market segments with prices dropping by $200,000 on average. Traditionally we see a fall-off in the final quarter of the year, but his years’ trends suggest a stronger narrative; buyer affordability and demand are significantly below where they have been in recent years.

With decreasing affordability, buyers are shifting their focus heavily to turn-key. Additional costs after purchase are as undesirable in this market as they ever have been, and it's in a homeowner’s best interests to take the time to update & enhance their properties ahead of time to ensure a turn-key property is presented to the market.

Bidding wars still exist for a select few homes presented well and priced in line with the market.

The Luxury Market

The luxury market in The Richmond District ($1M+ above the median) saw an average price drop of $400,000 in Q4, after an already notable dip between Q3 and the early part of 2022.

However, homeowners should seek solace in the fact the average $/foot didn't change at all quarter over quarter, meaning buyers are still valuing properties roughly the same; pending size.

Given the general trend of a significant fall-off in Q4 around most market segments in San Francisco, The Richmond District faired quite well in recent months.

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.