Real Estate Market Update for April/May 2021
What’s New in San Francisco Real Estate
Analytics and charts from Compass
The spring market has been incredibly busy, and sales figures are showing that the market is evening out after a volatile pandemic year.
Year over year, comparing sales in the 12 months since the start of the pandemic to the previous 12 month period, only studios/1 bedrooms saw a drop in sales volume, down 4%. Two bedroom homes, including condos, made up the largest segment, accounting for 36% of home sales.
The spring market is also showing a balance of supply and demand that indicates a much stronger market than last year when shelter-in-place began and inventory peaked.
While condo values are currently below their peak, they are showing signs of improvement from the lows of last fall and earlier this year. Home values continue to hit new highs, climbing up from a slight dip earlier this year.
Mortgage Rates Drop While Inflation Spikes
The 30-year fixed-rate mortgage averaged 2.94% for the week ending May 13, down two basis points from the previous week. The benchmark mortgage rate has fallen since the end of March, when it reached the highest level since June of last year, and has remained under 3% for a month now. The 15-year fixed-rate mortgage, meanwhile, fell 4 basis points to an average of 2.26%. The 5-year Treasury-indexed adjustable-rate mortgage averaged 2.59%, down 11 basis points from the previous week.
Inflation spikes were the highest seen in many years. The report released May 12th showed a 4.2% jump from last year. Comparing pricing today to April 2020 at the height of the pandemic could be merely showing COVID-related spikes, as opposed to long-term inflation. And while the Fed likes to see a consistent 2% rate of inflation, in the last 121 monthly readings inflation has only met/exceeded that target 14 times – this recent bump could be a sign that the economy is growing. All eyes will be on inflation to see if it will be a short-term or a long-term trend; if the latter, we can expect interest rates to rise accordingly.
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.
