From Pacific Union International Chief Economist Selma Hepp – Oct. 15, 2018
While most Bay Area regions saw sales slow in the third quarter, activity in San Francisco was on par with last year, with continued increases in higher-priced sales. Buyers were finally presented with more options, as single-family home inventory rose compared with the same period last year.
Buyers of homes priced between $2 million and $3 million were more restrained than those in lower or higher price ranges. As a result, there were fewer bidding wars and more price reductions. By contrast, buyer demand for homes priced below $2 million remained steady, with eight in 10 homes selling for more than asking price for an average 16 percent premium.
Condominium sales maintained strong momentum in the third quarter, and buyers continued to compete, leading to an increase in the share of units selling for more than asking price. Supply also improved compared with last year, giving buyers more choices.
Looking Forward: Demand for San Francisco real estate remains steady despite some rebalancing of market expectations elsewhere in the Bay Area. With a lack of desirably priced inventory, sales activity going forward will be constrained, although continued economic strength will help fuel buyer demand.