From Pacific Union International Chief Economist Selma Hepp – Oct. 18, 2017
Stronger 2017 housing market activity in San Francisco continued into the third quarter. Still, buyers remained constrained by very limited inventory. The quarter ended with fewer overall sales than during the same period last year, and inventory for both single-family homes and condominiums fell by double-digit percentage points.
At the same time, strengthened activity and competition among buyers caused properties to sell faster than they did in the third quarter of 2016 across all price ranges except for $3 million-plus. Bidding wars were common, and seven in 10 homes sold above the asking price, with premiums for single-family homes reaching 16 percent. Buyers of homes priced between $1 million and $2 million are facing more intense competition, and most paid 20 percent more than the asking price.
As a result, the median sales price showed moderate growth. Nevertheless, prices of newly constructed condominiums continued to trend lower, while prices of existing units maintained their solid upward momentum.
Looking Forward: The Bay Area’s strong economic drivers should continue to fuel demand for San Francisco real estate. Despite newly constructed condominiums, inventory levels remain severely undersupplied, which will hold back future home sales activity.