Real Estate Market Update for March 2021
What’s New in San Francisco Real Estate
Analytics and charts from Compass
At the beginning of the new year, it is common for buyer demand to outpace new listings, a dynamic which typically accelerates as spring gets underway.
When new listings lag behind demand it can create strong interest for desirable homes. This imbalance in supply and demand adds considerable pressure to the market, with overbidding and price increases becoming more common. This is happening right now, particularly in the single family home market. My recent listings were inundated with showings and attracted multiple bids and preemptive offers; buyers are looking to move quickly on turnkey homes. As we move into spring, and as San Francisco continues making progress in vaccine distribution, we may see this trend continue.
The economic landscape continued to provide signs of hopeful optimism last week. The labor markets posted further improvements with fewer workers filing for unemployment. Home sales rose during the first week of March compared with last year. Fewer homeowners were in forbearance and, most importantly from a general economic perspective, the number of new coronavirus cases and deaths continued to fall. Higher mortgage rates and slowing mortgage applications took some of the luster off last week, but overall, the data was positive and mortgage rates remain comparatively low.
Although the rise was not as significant as reported in some other sources, the typical contract rate for a 30-year mortgage rose above 3% last week to 3.02%. This is still relatively low by historical standards, but it does represent a jump from the all-time lows of 2.65% just a few months ago. 10-year bond rates remain elevated and spreads have compressed as well, which suggests mortgage rates could rise by another 10-20 basis points in the coming weeks.
Although the market continues to see fewer and fewer homeowners in forbearance, the improvement is starting to lose momentum. Overall, the percentage of mortgages still in forbearance fell from 5.23% the previous week to 5.20% last week. In addition, portfolio lenders continue to see a rise in forbearance rates suggesting that those customers are not able to benefit as directly from the various options available to borrowers looking to exit forbearance.
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.
