Content

Go to https://maxarmour.com/market-insights for the full reports.

Author 

Max Armour

Luxury Property Specialist

max.armour@compass.com

(415) 290-6058

In Max’s two decades of experience, he’s built a reputation as an agent who delivers value in every transaction by giving each client everything he has. His professionalism, work ethic, and drive have led to him being consistently ranked in the top 1% of San Francisco real estate agents for over a decade. Instilled with youthful energy and unrelenting dedication, he’s a sought-after agent and expert at garnering exposure in San Francisco’s highly-competitive market, with over $2 billion in sales for clients in his career.

Max blends an innovative approach—constantly evolving and utilizing the latest trends in real estate—with a focus on truly understanding each client’s unique priorities. Whether you’re buying or selling, he understands that in a time of transition, you need someone who will exercise discretion, while turning over every stone to ensure your success.

As a Russian Hill native and Northside expert, Max has unparalleled understanding of the city’s niched neighborhoods and nuanced microclimates. He enlists his extensive network of relationships and deep knowledge of every neighborhood, street, and house in the area to stay ahead of the game and deliver value for his clients.

MAY 2023

Summary of the Spring Market – It continues to recover. 

Buyer demand has continued to rebound from its late 2022 nadir. Though mortgage applications are still well down year over year, many buyers have accepted higher interest rates as the new normal and decided to move forward – and in the last two months, rates have been trending downward. A significant minority of buyers are paying all cash. 

Open houses are seeing increased traffic, more listings are selling, and selling more quickly with multiple offers. Median sales prices have generally been ticking back up in 2023, though still down across the Bay Area from the market peak last spring. San Francisco was more negatively affected by the pandemic with lower rates of appreciation during the pandemic boom. And due to its specific economic circumstances has typically seen somewhat larger price declines since the market shifted in mid 2022. 

Even with the increase in demand, sales activity remains far below last spring due to a number of economic and supply constraints. While increasing from mid-winter lows, with some very big sales occurring, luxury sales volumes have generally seen larger declines as compared to the peak of the pandemic boom, when luxury sales often hit spectacular new highs. 

The number of new listings has also dropped from historic norms. This is mostly ascribed to the mortgage lock-in effect, i.e., owners with very low long-term fixed rate mortgages are reluctant to sell and then buy at a much higher prevailing rate. This decline in new listings has major ramifications for supply and demand dynamics and increases pressure on prices, even in a reduced activity environment. 

Some uncertainty clearly continues with inflation, interest rates, stock markets, bank crises, high-tech layoffs, and now as of early May, federal debt-limit negotiations. But so far, the 2023 housing market has mostly been moving in a positive direction. 

Market cycles. 

Over the past 40 years alone, the San Francisco bay area has seen four major upcycles or housing booms. In each, there have been enthusiasts who argue that this time, the boom times will never end, but each ended, typically after hitting a final peak of what economists call irrational exuberance. Upcycles were followed by market corrections or down cycles during which many predicted, often gleefully, that the Bay Area was on an endless decline spiral, but recoveries followed. 

Housing and financial markets have always run in cycles, both economic and psychological, but so far since the days of the gold rush, despite all its boom and bust, the Bay Area has always rebounded once more. 

The Bay Area is one of the world’s great metropolitan areas, as a financial and cultural center surrounded by the spectacular beauty of its setting and surrounding open space. It is a hothouse of innovation, diversity, openness and opportunity. And despite this current round of challenges, we expect it will continue to be so for a long time,  

San Francisco House Price Trends

Year over year, the 3-month rolling median house sales price in April 2023 was down about 20%, but has started to tick back up.

San Francisco Condo Price Trends

Year over year, the Q1 2023 median condo sales price was down about 7% from Q1 2022.

However, condo prices have started to tick back up.

Highest Home Sales in San Francisco Neighborhoods, 2023, YTD

Presidio Heights $34,500,000

Sea Cliff $20,000,000

Cow Hollow $9,995,000

Pacific Heights $9,500,000

Russian Hill $6,500,000

Glen Park $5,800,000

Jordan Park/Laurel Heights $5,650,000

Highest Condo/CO-OP Sales in San Francisco Neighborhoods, 2023, YTD

Pacific Heights $11,000,000

Yerba Buena  $7,750,000

South Beach $6,100,000

Cow Hollow $6,000,000

Financial District $4,950,000

Nob Hill $4,500,000

New Listings on the Market

Year over year, the new-listing volume in April 2023 was down 43%. Which is highlighting the low inventory of properties for sale currently. The number of new listings coming on the market continues to be low, as many potential sellers hold off from listing their homes due to the doubling of interest rates since early 2022: This constitutes a huge factor in the market dynamics and is undoubtedly holding back sales activity.

Pending Sales

The volume of pending sales is greatly reduced which means that buyers and sellers are not making any decisions or feeling any pressure to take action right now. Compared to the pandemic spring of 2021 where there were many actively making decisions. Buyers are more scrupulous. Inventory is the same, but sales volume has been reduced by almost 50%.

Price Reductions

The number of price reductions has been climbing.

San Francisco House Price Appreciation

• Year over year, the 2022 median house sales price was down about 1% from 2021.
• The median price in San Francisco has plateaued.

San Francisco County – Home Sales Pricing By Bedroom Count

Houses – 5 or more bedrooms/ 4+ bathrooms

• Median sales price – $3,750,000
• Median square foot – 3,900 SF
• Median $ per square foot – $997/SF
• Highest sale in period – $34,500,000

Houses – 4 bedrooms/ 3 bathrooms

• Median sales price – $1,850,000
• Median square foot – 2,058 SF
• Median $ per square foot – $987/SF

Houses – 3 bedrooms/ 2 bathrooms

• Median sales price – $1,400,000
• Median square foot – 1,580 SF
• Median $ per square foot – $940/SF

San Francisco County – Condo Sales Pricing By Bedroom Count

• Condos – 2 bedroom, 2 bath
• Median sales price – $1,250,000
• Median square foot – 1,182 SF
• Median $ per square foot – $1,032/SF

Supply and Demand

Months Supply of Inventory – Determines how long it would take to sell the current inventory at the average monthly sales rate over the past 6 months.

By price

• $10,000,000+ – 35 month
• $5,000,000 to $9,999,999 – 12.8 months

By type

• Houses – 2.25 months
• Condos – 4.2 months

Marina District

Only 1 house sale in the period @ $2,800,000

10 condo sales in the period.

Median Condo Sales Price: $1,962,500 

Median Condo $/Sq.Ft. Value: $1231/sq.ft 

Median Condo Size: 1455 sq.ft.

Cow Hollow

5 house sales in the period.

Median House Sales Price: $4,980,000 –

Median $/Sq.Ft. Value: $1329/sq.ft. –

Median House Size: 3543 sq.ft.

High Sale in Period: $9,995,000

8 condo sales in the period.

Median Condo Sales Price: $1,600,000 –

Median $/Sq.Ft.: $1236 –

Median Size: 1587 sq.ft.

Pacific Heights

8 house sales in the period.

Median House Sales Price: $4,300,000 –

Median House Sales $/Sq.Ft. Value: $1534/sq.ft. –

Median House Size: 3878 sq.ft.

High Sale in Period: $9,500,000

38 condo sales in the period.

Median Condo Sales Price: $1,500,000 –

Median Condo $/Sq.Ft. Value: $1143/sq.ft –

Median Condo Size: 1312 sq.ft.

Russian Hill

16 condo sales in the period.

Median Condo Sales Price: $1,635,000 –

MedianCondo  $/Sq.Ft. Value: $1178/sq.ft –

Median Condo Size: 1584 sq.ft.

2 house sales in the period @ $5,550,000 & $6,500,000

Nob Hill

1 house sale in the period @ $3,400,000, 3265 sq.ft.

20 condo sales in the period.

Median Condo Sales Price: $1,030,000 –

Median condo  $/Sq.Ft. Value: $954/sq.ft –

Median Condo Size: 1158 sq.ft.

Presidio Heights

Only 3 house sales reported in the period @ $2,288,000, $7,200,000 & $34,500,000

2 condo sales in the period @ $1,400,000 & $1,800,000

Sea Cliff

Only 3 house sales in the period.

Median House Sales Price: $12,250,000 –

Median House $/Sq.Ft. Value: $1530/sq.ft. –

Median House Size: 7540 sq.ft.