What’s New in San Francisco Real Estate
Analytics and charts from Compass
Home Prices Remain Unchanged
Generally speaking, after years of high appreciation rates, annual 2019 Bay Area median home prices basically remained unchanged as compared to 2018. Amid the anticipation of a number of high-profile IPOs, San Francisco hit new quarterly price highs in the spring of 2019. However, this surge was tempered by a slower fall market. 2019 ended at about flat for houses and a little up for condos, largely driven by new condo construction. While the markets are impossible to predict, local economists expect Bay Area median prices to remain basically relatively flat this year, within a general range of up or down 2%, similar to what happened last year.
Low Unemployment and Lower Interest Rates
At the same time, compared to the beginning of 2019, the market for 2020 is starting off on more solid footing. Unemployment is hovering at a 50-year low, there is still plenty of Bay Area job growth and VC investment in the tech sector. Additionally, decreasing interest rates continue to be a boon for home buyers. According to Freddie Mac, the 30-year fixed-rate average slipped to 3.72% with an average 0.7 point, down from 4.51% a year ago. The 30-year average has been below 4% for the past 32 weeks.
Year-Over-Year Comparisons
Median House Price Changes
2019 San Francisco Sales
Home Price Appreciation
One of the big factors in San Francisco house price appreciation since 2012 is that fewer house owners are selling (as shown in the chart below in the darker green). If demand increases, but supply drops, that puts upward pressure on prices.
Overall, house prices have out-appreciated condos over the past seven years due to two factors: significant new condo construction in San Francisco, and the fact that condo owners sell their homes more often than house owners. Both of those factors increase supply to help meet increased demand.
San Francisco Home Prices by Neighborhood
Source: Compass Bay Area Market Reports
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.
