Year-End Real Estate Market Update
By Eric Castongia, Zephyr Real Estate
Citywide, the real estate market in 2017 got off to a slow start, and then took off like a shot in March and April. Buyers remained active and anxious until Labor Day, after which, they were more critical about property values and flaws. West Portal/Inner Parkside remains in it’s own bubble of desirability; when something comes up, it generally sells immediately-unless it’s overpriced. Here are some interesting stats for the year:
- The total number of sales for 2017 was 58, up from 46 in 2016. Adding a layer and a trend line, 2015 had 42; historic normal has been around 50 annual sales. The rise in sales could be seller anticipation of a height in the market.
- In the last quarter of 2017, there were 17 sold properties, with 13 receiving multiple offers over asking. The amount of over bids ranged from as little as $101,000 to as much as $550,000. The most under asking price was $100,000.
- 48 of the 58 sales for the year were multiple offers, and 46 of them (79%) were over asking.
- Four of the year’s transactions identify as ‘failed to sell’, however, in the final tally, two of those properties did ultimately sell-having to be taken off the market, repriced and remarketed. It is remarkable that only two properties failed to sell the whole year, indicating both motivated sellers and buyers.
- For sales reported as all cash; there were eight for the year (14%), essentially holding steady from 2016’s seven (15%). Interestingly, 26% of the market in 2015 reported cash sales.
- In most cases, buyers writing offers with loans did not include financing contingencies, taking on the risk of getting a loan, in order for their offers to look more attractive in competition.
- To determine property values from quarter to quarter and year to year, I look at various housing types (such as two story homes, or typical two bed, one bath homes with rooms down) and neighborhood sub-districts (such as core West Portal/Inner Parkside vs. North of Ulloa); I find this method more accurate than median price.
- For example, values of typical ‘two ones’ with rooms down in core West Portal Inner Parkside, seem to be level from quarter to quarter and year to year. Whereas, the same type of home North of Ulloa, which has historically been less expensive, values have increased six percent from quarter to quarter and 16% year to year, putting the prices of those homes on par with West Portal and Inner Parkside. My thought is that we could be reaching the top limit of affordability for this type of home. Buyers instead, are changing neighborhoods, ir moving out of the city out of frustration and lack of options.
- Moving to other housing types, the number of ‘super-remodeled’ homes has increased steadily, but not quite enough to compare them quarter to quarter and year to year. Since they are so different than the local housing stock, I am using them sparingly in comparisons.
- Two story homes have always been a premium. They have continued to rise in price and I’m figuring the increase from quarter to quarter and from year to year, is approximately eight to 11 percent.
- The beginning of 2018 ramped up quickly; mainly from a lack of inventory and buyers who were not successful finding a home last year. I am telling my seller clients to get on the market as soon as they can.
- Buyers need to set priorities and be willing to buy less house than they would like and very likely in areas they hadn’t planned. As affordability becomes an even bigger issue, the question is whether it will trigger a break in the market.
Eric Castongia, Broker Associate at Zephyr Real Estate (BRE Lic. No. 01188380) provided this information. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service, the County Tax Record, the internet and Eric’s observations in the marketplace. Eric can be reached by e-mail at Eric@SFHotBuy.com, or via mobile phone at (415)307-1700.