June 27, 2019

As your local real estate experts, we feel it’s our duty to give you, our valued client, all the information you need to better understand the complex San Francisco real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information, so we’ve put together this monthly analysis breaking down specifics about the market. It’s all part of our mission to give you the very best in personalized service. We would love to know what you think!
– Carren Shagley & Jennifer Burden, DRE #0858254 / DRE #01407698
Welcome to our June newsletter. In this month’s issue we spotlight:
  • San Francisco home sales surpass last two years, inventory is tighter
  • A look at San Francisco homes on the market

San Francisco home sales in April surpass last two years, inventory is tighter

As we move through the summer months, we focus on a turn of events steering the market in an interesting direction: San Francisco home sales are up significantly compared to both 2018 and 2017, and inventory is tighter than this time last year.

Let’s take a look at a year over year comparison, comparing April of this year to the same time last year.

Prices have held up well through a period of rate hikes during the second half of 2018. Year-over-year, median home prices for single family homes decreased 1 percent. This stability will persist into the remainder of the summer buying months with interest rates remaining low at 4.2%.

The median sale price for a single family home fell on a month-to-month basis for both single family homes and condos.

This is a change from the explosive month-over-month growth that we saw in the winter months. Prices are again near all time highs where price appreciation seems to hit a ceiling.

Andrew LePage, analyst at CoreLogic, explains there is a limit to how high prices can go. Observing the recent slowed growth, LePage offered “Did we hit more and more people’s limit? Sure.”

Prices settling near their limits is not a bad thing. While some potential buyers may hold off buying, believing we are headed towards a correction, strong April sales data shows us there is stability in settling prices.

This brings us to the real story for the month: the sales and inventory data. Let’s start by taking a look at the last five years of sales data for San Francisco. From the chart below, we see the seasonality in home sales. Sales dip in the winter months, usually bottoming out in January, and are strongest in the spring and fall months.


Paying attention to 2019, we can see January experienced the lowest low over the last five years but bounced back to the highest high since 2014.

In the case of condos, in January of this year, there were only 94 units sold in San Francisco. This is the lowest number of units sold of any month over the last five years. By April, condos sales rose to 284 units—a 300% increase in sales between January and April. This level of increase has only been seen one other time since 2014.

If we look at the last six months of sales data, compared to the previous year, we see a big turn around in the condo market. Condo sales were down by 20 percent in the winter, and things were looking like they were finally slowing down. In the month of April, that trend reversed, and condo sales jumped up 7 percent compared to 2018.


Single family home sales have been more resilient which is why April kicked things into high gear with home sales up almost 20 percent year-over-year.

Let’s review a couple factors influencing the increase in sales.

The first is low mortgage interest rates for buyers. As we highlighted in the past two newsletters, interest rates fell in March and have remained low through June.

The second is the influx of cash from tech employees’ IPO payouts. Fred Brousseau, director of policy analysis at San Francisco’s Budget and Legislative Analyst’s Office, shared in an April memo to SF lawmakers that big-ticket IPOs are likely to drive up the price of homes in SF:

“We applied the most conservative average increase per IPO […] (1.8 percent) to San Francisco’s median sale price for a home to estimate the possible impact of up to six high visibility IPOs that have occurred or could occur in 2019. […] The higher estimate would represent an 11.3 percent increase in the median sale price for a home in San Francisco. This increase would be spread over one to two years, depending on when employees would be allowed to exercise their options.”
Regardless of the exact makeup of reasons, increased sales is having an impact on inventory. Inventory is the term used for the numbers of active homes listed on the market. When the number of homes on the market is relatively low, median prices will typically rise over time.

Let’s take a look at the last five years of inventory data for San Francisco to get a good look at the seasonality of inventory. Like home sales, inventory dips in the winter months with less people listing their home around the holiday season. Inventory usually bottoms out in December and rises through the spring months.


From the chart above you can see the seasonal lows and the highs in each year. Paying attention to 2019, we can see the unseasonable dip in inventory between February and April of this year.

San Francisco is shedding the excess inventory that it had this winter. The number of single family homes on the market is 3 percent lower than this time last year.

If we take a look at the last six months of inventory data and compare it to the previous year, we see another big turnaround. Inventory was 20 to 40 percent higher in the winter months compared to 2018. By April of this year, things have completely reversed course. The number of single family homes, for example, is down 4 percent.



Another factor contributing to tightening inventory is the persistence of less new homes being put up for sale.



Reviewing the chart above, you can see the number of new listings in April was down significantly from the same time last year for both single family homes and condos.
A Snapshot of San Francisco Homes on the Market

Let’s take a look at San Francisco homes on the market in more detail and review the city’s active listings by:

  • Price Range
  • Square Foot
  • Number of Bedrooms



The takeaway for this month is that even though median prices fell 1 percent year-over-year the market is not showing any signal of sustained price declines. Sales are increasing, and inventory is tightening.

A tighter market means sellers can expect more when it comes time for offers. Listings priced correctly means there is a better chance of receiving multiple offers and selling the home more quickly.

Motivated buyers have access to relatively cheap financing because interest rates remain low at 4.2 percent.

It is an environment that looks healthy and stable for everyone.


Let's Talk

You’ve got questions and we can’t wait to answer them.