Real Estate Market Update for June 2020

On the heels of the drop-off in activity after the shelter-in-place order, market activity increased significantly in May. However, even with this recent increase, activity is still well below May 2019 numbers.

With the gradual easing of the shelter-in-place guidelines and the market adjusting to our new circumstances, it is expected that recovery will continue to surge closer to normal levels. 

From what I’ve seen, buyer demand is surging back and home prices have not been greatly impacted. Buyers are eager for homes, more space, and are looking to take advantage of the historically low mortgage rates.

Although median sales prices for both houses and condos dropped in San Francisco in May, these figures are based on a very low volume of closed sales in the month. Adding further to this is the significant drop in higher-priced home sales, which put downward pressure on median prices; right now, this does not indicate a change in fair market value. In San Francisco, the median house sales price in May 2020 was actually $28,000 more than the year-2019 median sales price.

It’s also important to note that the May 2020 sales and sales prices mostly reflect the market in April, at the height of the impact of shelter in place. Sales prices are a lagging indicator reflecting the market 3-6 weeks earlier. Based on the large jump in accepted-offer activity in May (and especially for more expensive homes), the coming months will offer a better indication of whether changes in fair market value are occurring.