From Compass Chief Economist Selma Hepp – Jan. 15, 2019
While San Francisco maintained housing-market momentum throughout 2018, with a total 9 percent increase in sales of single-family homes and condominiums compared with 2017, fourth-quarter activity slowed year over year. Slowing sales were widespread across price ranges except homes priced above $3 million, which continued to trend higher than last year.
At the same time, inventory improvements seen across the Bay Area were also evident in San Francisco, with more single-family homes and condominiums for sale compared with the fourth quarter of 2017.
Buyers remained more enthusiastic than elsewhere in the Bay Area, with both single-family homes and condominiums commanding premiums. In San Francisco, over half of homes sold for more than asking price, with single-family homes selling for average 12 percent premiums and condominiums selling for 5 percent premiums.
Even so, more sellers reduced their initial asking prices, leading to an increase in the number of homes that sold at a discount, from about 12 percent last year to 20 percent in the fourth quarter. Still San Francisco saw fewer price reductions than elsewhere in the Bay Area.
Looking Forward: San Francisco homebuyers remain determined, brushing off financial-market volatility and other uncertainties. With recent improvements in mortgage rates and stock performance, buyers should continue to forge ahead in early 2019.