An expected autumn home sales bounce enlivened by falling interest rates has failed to materialize in San Francisco.
The lower borrowing costs through early this month hasn’t driven the substantial rebound in buyer demand expected by the local real estate industry, the San Francisco Business Times reported.
Mortgage rates this month were the lowest since February last year after the Federal Reserve cut interest rates on Sept. 18. But expectations of further declines are keeping buyers on the sidelines, according to Patrick Carlisle, chief market analyst at Compass.
Home sales have not kept pace with a rise in listings for sale, he said, so listing inventory will increase, reducing competitiveness of the market.
Total home sales this year through September was up 7.5 percent from the same period last year.
But the number of active listings on the market in September was up 30 percent year over year, reaching the highest it has been in two years.
The marked increase in the number of homes for sale has given the market advantage to buyers, though many homes are still selling quickly for more than asking price, Carlisle said.
Sellers are having more success in the luxury submarket, Carlisle said, as the number of homes sold for $3 million or more in San Francisco last month was up 35 percent from a year earlier. He attributed the spike in luxury home sales to a rise in wealth from the stock market.
While autumn can be a season of home price reductions, shaved asking prices this month were up year over year in San Francisco as sellers try to move unsold homes into escrow before the big end-of-year slowdown, according to the Business Times.
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Last week, the owner of a high-profile listing at 2990 Broadway on Pacific Heights’ “Billionaires’ Row,” cut the ask from $38 million to $32 million.
San Francisco’s median home sale price in the third quarter fell to $1.58 million, from $1.65 million in the previous period.
— Dana Bartholomew