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The West Portal/Inner Parkside Annual State of the Neighborhood

Year-End Real Estate Market Update for 2019

By Eric Castongia, Zephyr Real Estate

West Portal/Inner Parkside remains highly desirable, but buyers are finding it harder and harder to break in.  Buyers on the edge are moving to other neighborhoods and are more willing to leave San Francisco.  We’ve had market fluctuations over the year, but the trend line remains up.  Here are our neighborhood stats for the year:

  • The market took off like a shot at the beginning of 2019 and it calmed down just as quickly in July, with the illusion of slowing throughout the balance of the year.  2016, 2017 and 2018 had similar patterns; the historical ‘second bump’ after Labor Day seems to be a thing of the past.  There was less buyer traffic in listings after July, but the serious buyers were still aggressive on the best properties.
  • The total number of sales in the neighborhood for 2019 was 34, way down from 47 in 2018. 
  • The average number of annual sales has historically been around 50.  The last time we had sales in the 30’s, was in 2007 and 2009.
  • Multiple listing data is showing the number of available listings shrinking.  Supply and demand strains are making housing more expensive.  As housing prices go up, even those that own homes have fewer options, so only those who have to sell, are.  Everyone else is staying put, remodeling, and making do. 
  • 26 of the 34 (76%) sales for the year were multiple offers and 28 (82%) of them were over asking.  In 2018, 24 of the 47 (51%) sales for the year were multiple offers, and 32 of them (68%) were over asking.  This is a clear comparison that as the inventory shrinks, activity generally goes up.
  • Four of the year’s transactions identify as ‘failed to sell’.  Fewer ‘failed to sell’ transactions generally indicate that both buyers and sellers are motivated.  Between 2012 and today, that number has ranged from one to seven annually.  From 2006 to 2011, it ranged from 10 to 19; with 19 being at the height of the market of the market cycle in 2006.  A higher number means sellers are holding out for more money in their sale.  In this case, it was also the start of the coming recession.
  • For sales reported as all cash; there were six reported for the year (18%). Last year there were 9, but adjusting for the number of sales, pretty close to the same percentage (19%).  The high point since I’ve been tracking cash sales were highs in 2014 and 2015 at 23-26%, with the low point in 2016 at 4%.
  • In the last quarter of 2019, there were eleven sold properties, nine of them received multiple offers and 10 of them sold over asking.  The amount of overbids ranged from as low as $105,000 to a high of $425,000.  Noting the loss of value from fall to winter quarter (and I’ve noted this for several years), this would be a great time for buyers to buy.
  • 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, values are up year to year about four percent, while from fall to winter quarter, it’s down about five percent, indicating some fluctuation during the year.
  • North of Ulloa, there were no direct comparable properties from year to year; quarter to quarter, values remained even.
  • The age-old disagreement as to whether there has been a slowdown in the market continues.  I think yes, partially, but we have to think of the market as both seasonal and selective.  1) Less desirable properties are selling slower and for less than desirable counterparts; and 2) desirable properties are still in demand unless they are overpriced.
  • In the 2018 year-end article, we were starting to talk about transparent pricing, meaning the list price is what a seller would accept.  We’ve been trying it, but it isn’t working yet.  Active buyers who have lost in competition are still bidding over, while the buyers who haven’t been rung out to dry yet, are writing at asking and getting rejected.  In the end, listing traffic is still being generated with listings that are priced lower to get buyers in the door.
  • The market so far in 2020 is a reflection of the past few years.  Open houses are busy, over bids are occurring and inventory is still not high enough to satisfy buyer demand.

Eric Castongia, Broker Associate at Corcoran Global Living (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.

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