Sales prices for housing in San Francisco are dropping fast, with double the number of price reductions in June compared to a year earlier.
The median home price fell 5 percent in June to $1.89 million, down from $2 million in May, the San Francisco Business Times reported, citing data from Compass. The number of price reductions spiked to 316 in June, a 102 percent increase from 156 in June 2021.
Overall, home prices in the city fell 3 percent in June compared to the same period last year
“It’s probable, though not yet certain, that one of the longest, most dramatic real estate market upcycles in history — oddly enough, supercharged by a deadly, worldwide pandemic — peaked this past spring,” Compass Chief Market Analyst Patrick Carlisle told the Business Times.
The supply of active listings on the market is also climbing rapidly, not because of a surge in new listings, but because demand has declined, as seen in the large drop in listings going into contract, Carlisle noted.
Buyer pools have thinned out, Vanguard Properties co-owner Frank Nolan said. While multiple offers have become an exception rather than the norm, pricing and expectations have changed after a season of rampant over-bidding.
“We are seeing properties priced based on comparable sales and with the expectation that they sell near the list price,” Nolan said.
Some brokers foresee a bump in sales activity before the next interest hike by the Federal Reserve, which is set to take place this month. Buyers are also choosing adjustable-rate mortgages, especially if they’re not going to live in a house long term.
In June, the number of listings accepting offers was down 32 percent from the same period last year, with houses down 26 percent and condos down 36 percent, according to Compass. In May, listings accepting offers were down 22 percent, compared to May 2021, with houses down 19 percent and condos down 24 percent.
Redfin found that San Francisco, Oakland and San Jose are among the fastest-cooling housing markets in the U.S. as mortgage rates remain above 5 percent and the stock market stands on shaky ground, according to a new report.
Downtown San Francisco has seen an uptick in new housing, mostly condominiums, over the past decade, but there’s lower demand when the units go on the market.
[San Francisco Business Times] – Dana Bartholomew
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