San Francisco Real Estate as 2021 Begins

Our January report focused mostly on 2020’s annual statistics. This report will put most of its attention on quarterly and monthly indicators, which better illustrate changes occurring as 2020 progressed and 2021 began.

Of Bay Area counties, San Francisco was most negatively affected in the months immediately following the implementation of shelter-in-place. Inventory soared and sales plunged, especially in its condo market. In the second half of the year, buyers rushed back into the market.

Sales volume, very unusually, peaked for the year in December, hitting its highest point in history (for December). Home sales in January were up 67% over January 2020, a tremendous increase. Year-over-year, house median sales prices are up a little, and condo median prices, divided by size of unit, were down about 10%.

The city remains a very complex market, varying by neighborhood, property type and price segment. And vaccines may alter dynamics considerably in 2021.

New listings coming on market jumped up in January, as is the norm. The market seems to be heating up much more quickly than typical at the beginning of the new year.

This next chart illustrates the rapid growth in inventory that occurred after the pandemic struck: The spike was heavily weighted to condo listings, which hit an all-time high. In the last 3 months, inventory began dropping quickly – due to increasing demand, a drop in new listing activity, and a jump in listings being pulled off the market by sellers in December for the holidays.

Month by month, year-over-year comparison of home sales volumes – illustrating the initial pandemic crash in activity followed by the market rebound that saw monthly sales volumes climb far above the levels of the previous year. Blue columns represent monthly sales within the last 12 months, and gray columns, sales in the previous 12 months.

Sales were up 60% and peaked for the year in December (first time ever), and January sales soared 67% above January 2020.

Of the sales reported to MLS, closing in December and January, 43% were houses, 51% condos, 5% TICs and 1% co-ops.

Of the active/coming soon listings in MLS as of early February, 26% were houses, 63% condos, 9% TICs and 2% co-ops.

The chart below: Comparing 2020 to 2019, luxury house sales were up, luxury condo sales were well down, and non-luxury home sales were about flat. However, none of these statistics do justice to the rapid acceleration in market activity occurring in the second half of the year.

Sales price to original list price percentage: Over 100% – as seen in the 4 quarters of 2020 for houses – signifies an average sales price above original list price. Under 100% – as seen in the 2020 condo market – means, on average, sales prices were negotiated below asking price. Overbidding has declined substantially over the past 3 years.

As buyer demand bounced back, the number of price reductions dropped from the historic high reached in early autumn – however, on a year-over-year basis, the number remains higher than is typical for January.

A much larger number than usual of unsold listings were pulled off the market in December. We expect many of these to be re-listed early in the new year, some of them at lower prices than before.

The 2 tables below reflect market statistics and values for Q4 2020 only, by city district (each containing a variety of neighborhoods), first for houses and then for condos. Q4 stats will often be different than those for the full year 2020.

It is not unusual for more expensive markets to have softer supply and demand statistics, though this is not always the case.

City condo markets – especially in districts dominated by high-rises and large projects – often saw much cooler conditions than house markets.


Below is the first of 4 tables reviewing full-year 2020 SF home values by neighborhood. The full report along with a home price map is here:  San Francisco Neighborhood Home Prices. And for the entire region: Bay Area 2020 Home Prices.

Two major factors behind the Bay Area housing market recovery were the dramatic drop in interest rates, and the significant rebound in the stock market – especially in the stock prices of some of our local high-tech giants.

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San Francisco Real Estate in 2020

Pandemic, shelter in place, mass unemployment, terrible financial hardships for many households and small businesses, new ways of working, office buildings empty, people move, rents plunge, dreadful fires, an anxious presidential election, interest rates to historic lows, stock markets to new highs, billionaires decamp to save on taxes, IPO mania breaks out again, vaccines begin to arrive – and the real estate market in San Francisco saw complicated dynamics in supply and demand, with a strong recovery after an initial crash in activity.

2020: a year of social, political, economic and environmental extremes. Let us give thanks to those who worked so hard and sometimes risked their lives to help others.

The following analyses were designed to be self-explanatory, but please don’t hesitate to contact us with any questions.

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A Strange Year Begins Winding Down December 2020 San Francisco Real Estate

Though the pandemic upended many normal seasonal trends this year, the market did begin its typical “holiday season” slowdown in November – however activity remained well above levels of last year. It is unknown how the latest Covid-19 circumstances may affect the market in December, which is usually by far the slowest month of the year.

More importantly, we hope you and your loved ones stay safe and well during this challenging holiday season.

This first chart tracks percentage changes in median house sales price since 1990. It is based upon the Q1 2000 price being indexed to 100: A reading of 50 signifies a median price half that in Q1 2000; 200 means the price has doubled since then. In early 1990, the SF median house price was about $300,000; it is currently running about $1,650,000.

Year-over-year median sales prices for condos of various sizes, and for houses, in September through November of 2018, 2019 and 2020. A big increase in supply since the pandemic struck has led to declines in condo median sales prices.

A review of Q3 2020 median house sales prices (and SF condo prices) around the Bay Area. SF and San Mateo have been alternating in recent years for highest median house price. SF always has the highest median condo price in the region.

As is typical, the number of new listings plunged in November. In the first week of December – not illustrated on this chart – new listing activity ticked back up from the short Thanksgiving week, but remained well below pre-November numbers. December is usually the month with the lowest number of new listings coming on market.

With the decline in new listings, overall listing inventory dropped, but remained much higher than in previous years.

The number of condos on the market dramatically increased since the pandemic struck, but began to decline in November.

Market activity as measured by the number of listings going into contract is significantly higher on a year-over-year basis: over 40% higher in November 2020.

The below chart measures demand as compared to the supply of listings available to buy. By this metric, the house market has been significantly stronger than the market for condos since the pandemic struck.

Monthly home sales volume by property type:

The number of listings reducing price dropped in November, but remained elevated over previous years.

4 charts and tables looking at the luxury home markets of San Francisco and those within the larger region.

Link to Compass NorCal Luxury Home Market Report

The Bay Area counties which have seen the largest percentage increases in the sales of luxury homes since May have been Sonoma and Santa Cruz (despite the fires), and Monterey. Not shown on this chart: Lake Tahoe saw a incredible 187% jump in luxury home sales.

This next table looks highest priced listings on the market in early November, and the highest priced sales in the May-October period. Since it was compiled, a higher sale closed in San Francisco, in the Sea Cliff neighborhood, at $24,000,000.

If you’re looking for a home priced $5 million and above, these are the places where you will have the greatest choice of listings.

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San Francisco House & Condo Markets Diverge – November 2020 Report

SF house and condo markets have been affected differently by the pandemic. This report attempts a deeper dive into the data across the city and within different city districts.

The market typically starts a big slowdown in mid-November, running through the mid-winter holidays, until it begins to wake up in mid-January. High-price segments normally see the most dramatic plunges in mid-winter activity.

This year, the pandemic upended seasonality: Spring, usually the strongest selling season, saw a crash in activity; summer, which typically slows down – especially for luxury home sales – saw high demand; and the summer market accelerated into autumn. But supply has been accelerating even faster than demand.

We suspect late Q4 will see something of a slowdown, but remain more active than in past years.

Link to a comparative review of Bay Area County Markets.

General City Dynamics, House & Condo

Sales rebounded strongly from the early-spring pandemic crash: House sales are higher than in recent years and condo, co-op and TIC sales are at levels comparable to peak sales volumes over that period.

The most dramatic change is the increase in the number of listings for sale. Condo, co-op and TIC listings in MLS are at their highest point ever, approximately 85% higher than one year ago. House listings are also up, but much less dramatically, running about 20% to 25% higher than in autumn 2019.

Steady demand but soaring inventory has led to an increase in price reductions. When demand outweighs supply, buyers compete for listings, usually by overbidding. When supply outweighs demand, sellers often compete for buyers through price reductions. The condo market is probably seeing its highest number of reductions in history.

Long-term median sales price trends, 6-month rolling:

Year-over-year changes in median sales prices and average dollar per square foot values in selected home configurations. The condo market has been hit by significant declines in these 2 measurements.

Luxury Home Sales by Property Type & Price Segment

Of the luxury home segments broken out in the chart below, the market for houses selling for $3,000,000 to $4,999,999 (red line) has rebounded very strongly over the past 6 months, hitting a new peak in sales (on a 6-month rolling basis). The other segments – luxury condos and co-ops, and $5m+ houses – have seen much smaller rebounds from shelter-in-place lows, and remain far below previous peaks.

House Markets by District/Neighborhood

Within the city, there are significant differences in market dynamics by location. This report will look first at house markets, followed by a series of analyses on condo markets. How these charts apply to any particular home is unknown without a specific comparative market analysis.

By most standard measurements, the greater Sunset/Parkside district has the strongest house market in the city with house values just below the SF median house price. At the softer end of dynamics are 2 of the city’s most expensive districts, which feature the largest luxury house segments.

Link to San Francisco Neighborhood Map

Overbidding on house listings is well down from the crazed levels of recent years, but is still relatively common in more affordable districts. Some part of the overbidding percentages is caused by strategic underpricing of listings (to get buyers excited).

A breakdown of house sales, $3 million and above, by district over the past 12 months.

San Francisco Condo Markets by District/Neighborhood

Since the pandemic hit, the softest condo markets have been those dominated by larger complexes and high-rises. The greater South Beach/ SoMa/ Mission Bay area – by far the largest condo market in SF – has the weakest supply and demand dynamic, followed by the greater Russian, Nob and Telegraph Hills area, and the Van Ness/Civic Center area.

Markets dominated by smaller buildings, often with separate unit entrances and dedicated outdoor spaces, have seen stronger buyer demand.

As a statistical average, overbidding above the original list price has disappeared from the condo market. This ties in with the previous chart on price reductions.

A breakdown of luxury condo, co-op and TIC sales – $2 million and above – by district.

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