As we explore the current state of the San Francisco real estate market, several key trends have become apparent, especially in the single-family home and condo segments. Here's an in-depth look at the market dynamics as the year draws to a close.

Single-Family Home Prices: On the Rise

The past three months have seen a significant 14% increase in the median price of single-family homes. This growth follows a period of adjustment from May 2022 to January 2023, influenced by rising mortgage rates. Since January, prices have surged by 15.9%, with the bulk of this increase occurring in the last quarter. In contrast, condo prices have shown remarkable stability throughout 2023, with only minor fluctuations.

Inventory Trends: Tightening Market

One of the most notable trends this year is the decrease in active listings. From September to October, condo listings have neared a record low, with a 21% year-over-year drop in overall inventory. This scarcity highlights the challenges buyers face in a highly desirable market like San Francisco.

Market Dynamics: Evolving Trends

The Months of Supply Inventory (MSI), a key indicator of market balance, has undergone a significant shift. For single-family homes, the MSI now suggests a market favoring sellers. However, the condo market continues to exhibit traits of a buyer's market, although this could evolve with the current trends.

Sales Activity: October Surge

Sales of single-family homes have followed typical seasonal patterns but at lower levels due to limited inventory. Notably, sales and inventory peaked unusually early this year, in May, with new listings reaching their peak in September. This scarcity of new listings has been a pivotal factor in market dynamics, with a 32% increase in new listings in September leading to a 37% rise in sales in October. Year over year, both sales and new listings have seen a decrease of 10% and 28%, respectively.

Pricing Power: Sellers Regain Leverage

The pricing power has shifted slightly in favor of sellers. Earlier in the year, sellers were receiving around 96% of the list price, but this figure climbed to 102% by June. Although it dipped below the list price in September, October witnessed a rebound to 101% of the list price, indicating a competitive market for buyers.

The MSI Indicator: Sellers' Market Returns

The MSI for single-family homes has dropped below three months, indicating a return to a sellers' market. This shift is significant, considering that the long-term average MSI in California is around three months, denoting a balanced market. The condo market, however, remains in favor of buyers, a trend consistent since April 2023.

Conclusion

Navigating these market conditions requires strategic insight for both buyers and sellers. For those considering selling their homes, particularly in the single-family segment, the current market presents favorable conditions. If you're thinking about selling and want to maximize your return, text me for an exclusive presentation of my approach to selling your home for top dollar. Together, we can navigate this dynamic market and achieve your real estate goals.

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