Real Estate Market Update for October 2022
What’s New in San Francisco Real Estate
Analytics and charts from Compass
Median sales prices dropped in Q3 largely due to seasonal trends as median sales typically peak in Q2 and drop in summer. Additionally, this is attributable to changing market conditions like shifting interest rates, inflation, stock market volatility, and consumer confidence.
On the supply and demand side, after a decrease in demand in the summer months, conditions have stabilized. Generally, sales numbers are no longer dropping appreciably, but days on market has increased and overbidding is dropping.
It bears repeating that the market was overheated in 2021 and early 2022 so many quarter-to-quarter and year-over-year comparisons are a bit distorted. And while comparisons to 2008 are still being made, the precipitating factors in the housing crash then are simply not present now. Mortgage payments as a percentage of income and loan delinquency rates are at all-time lows, and we aren’t seeing a frantic sell-off of properties like in 2008. With major economic changes at play, the market is currently experiencing a correction, but not a crash.
House Price Trends
While lower than the spike in 2021, house price trends for Q3 of 2022 are comparable to 2020. Compared to 2021, the Q3 2022 house price appreciation rate is down by 9%.
Condo Price Trends
Condo price appreciation is down in Q3 2022 compared to the past 3 years, but similar to Q3 in 2018. Compared to Q3 2021, condo sales price appreciation rates are down 5%.
New Listings Coming on Market
New listings are running below 2021 levels, but indicate the typical spike in new listings after the summer months.
Active Listings
As of October 1, 69% of listings were condos, co-ops, townhouses, and TICs, while 31% were houses.
Monthly Sales Volume - Longer-Term Trends
Listings Accepting Offers
The number of listings accepting offers in September was down 27% compared to last year.
Average Sales Price to List Price
While overbidding on condos and houses continues to decline, houses have a much higher average overbidding percentage than condos, averaging 108% versus 99% for condos in Q3. In addition, 74% of houses sold over list in Q3, compared to 38% of condos.
Average Days on Market
House listings in San Francisco are selling in half the time of condos, co-ops, and TICs, but days on market has increased for all properties in Q3 of 2022.
Price Reductions on Active Listings
Price reductions typically peak in October, before the usual mid-winter market slowdown starting in November.
Sales of Price Reduced Listings
Mortgage Interest Rate Trends
Per Freddie Mac, as of October 20, 2022, the average 30-year interest rate was 6.94%, the highest it has been in 20 years.
Delinquency Rate on Mortgages
As illustrated in the chart below, high mortgage delinquency rates were an indicator of the financial crisis in 2008. This rate is considerably lower now in 2022, and close to an all-time low.
The information herein is based on or derived from information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy or completeness of the information.
