It’s been a rollercoaster year in San Francisco.
The city’s median home price, which hit a record last April, plunged 20 percent in the second half of 2022 as high interest rates reduced sales volume to a trickle. The slowdown continued into this year, as continued tech layoffs and the collapse of two regional banks, including major mortgage lender First Republic, created more uncertainty in the market. But the city’s top agency believes the tumult only made it stronger.
Compass claimed by far the biggest share of San Francisco residential transactions, according to data compiled by The Real Deal, handling $5.8 billion in volume across more than 3,200 home sales between March 2022 and March 2023.
Kevin Patsel, Compass’ regional vice president for Northern California, credited the firm’s lion-sized market share with keeping clients and brokers ahead of the game.
“The city’s on sale. There’s some incredible values out there.”
“We are able to attract the most eyeballs on our listings, share market data and resources with fellow agents and keep better tabs on the pulse of the market,” Patsel said. “Inventory is shared internally amongst agents before it hits the general market and deals are often done before a property hits the market.”
TRD identified the city’s top 10 brokerages based on buy- and sell-side transactions for residential properties in San Francisco’s Multiple Listing Service over the 12-month period ending March 23. Off-market deals and homes that sold for less than $100,000 were not included in the analysis.
Sotheby’s finished second with slightly over $2 billion in volume across nearly 800 on-market sales. The firm’s total would have been higher were off-market deals included, according to regional manager Jeffrey Gibson, who said it’s not uncommon for 25 to 30 percent of its volume to be pocket listings. The firm specializes in high-end properties, where sellers often prioritize privacy.
Market swells at both ends
After a long and stormy winter that kept buyers hunkered down at home, Gibson said luxury sales really started to pick up in May. He’s been encouraged by the number of high-end deals that have gone through recently, including a $34.5 million Presidio Heights home listed by Compass that sold in March to a buyer brought by Sotheby’s — the city’s biggest deal so far this year.
“We’re doing some really large deals and when that happens, to me that means there’s confidence from the smartest guys and gals in the room that plunking down $20-, $30-, $40 million on a San Francisco home is still a good investment,” he said.
Third-place Vanguard handled almost as many on-market deals as Sotheby’s, but the lower average sales price brought its volume down to just over $1.2 billion. The brokerage represents homes at all price points, but listings over $4 million have been quiet of late, according to president Frank Nolan.
“The market below that is where all the energy is,” he said. “The city’s on sale. There’s some incredible values out there.”
Compared to the “industry-wise, nationwide banner year” in 2021, last year “looks awful” according to Randall Kostick, CEO of Corcoran Icon Properties, which ranked fourth. But Kostick noted that last year’s figures are more in line with pre-pandemic prices and volume. Still, low inventory remains a challenge, as some would-be sellers are now “married to their interest rates” and staying put.
Shakeups and breakups
On top of nail-biting over nationwide and local economic conditions, Corcoran’s Northern California agents had to contend with the dissolution of its partnership with Corcoran Global Living, the embattled franchise that was hit with multiple lawsuits alleging fraud and breach of contract over withheld commissions.
“This has happened to companies in the past and I watched it and I couldn’t believe it was happening to my own organization, but it did happen,” Kostick said. “We grew too fast and couldn’t sustain it.”
Corcoran Icon formed in December with all eight former Corcoran Global Living affiliates in the Bay Area coming aboard. Kostick said his firm’s $835 million in volume over 542 transactions is a tribute to the fact that “people are loving the new company and getting back local control of our operations.”
Coldwell Banker just had its own management shakeup, with former Sotheby’s president Kamini Lane taking on the CEO role in March after Ryan Gorman was let go. The change will help Coldwell focus on its identity, according to Jennifer Lind, president of Coldwell Banker Northern California, which fell just behind Corcoran in the rankings with nearly $789 million in volume over 506 transactions, rounding out the top five.
“Who you are as a brand is really, really important,” she said. “I think sometimes in real estate we try to be all things to all people and, unfortunately, there’s never a good end to that story. We’ve got a lot of new leadership with a vision of who we want to become.”