From Compass Chief Economist Selma Hepp – April 12, 2019
San Francisco’s slowing housing market activity which started in the fourth quarter 2018, continued to trend lower in the first quarter leading to fewer units sold across all price ranges. Homes priced between $2 million and $3 million saw a relatively larger decline on a year-ago basis which was the case in most Bay Area regions.
Despite slight improvements, for-sale inventory remained a challenge and buyers continued to face limited options. However, buyers remained relatively more enthusiastic than elsewhere in the Bay Area, with buyers of both single-family homes and condominiums more likely to absorb the newly available inventory and homes more likely to sell over the asking price than not. Six in ten homes continued to sell above asking price with the average premium keeping relatively steady at 13 percent. As a result, San Francisco did not see an increase in price reductions compared to last year’s first quarter, unlike many other regions in the Bay Area.
Looking Forward: San Francisco homebuyers remain determined, helped by improved home buying conditions, better financial markets, lower rates and possibly increased competition from newly minted IPO beneficiaries.