The Beginning Of A Market Shift, By The Numbers

Summer is here, and with it comes relief for home buyer hopefuls. Tuned-in house hunters have surely noticed an increase in ‘hit or miss’ listings in San Francisco over the past couple months; one home will sell with multiple offers, and a similar property will receive no offers at all. This is entirely consistent with buyers becoming more discerning as the tide turns in their favor, finally. FINALLY! Even without surging mortgage interest rates and waning consumer confidence throwing cold water on the market, Q3 is historically an opportune time to find deals. Talk to us today to get started.

NEW LISTINGS

Per Realtor.com Research: https://www.realtor.com/research/data, listings published on site. Data from sources deemed reliable, but may contain errors and subject to revision. May not include Coming Soon listings published to MLS. All numbers should be considered approximate.

Monthly new listings in San Francisco this past spring have largely tracked 2021 figures year over year. That said, the 13% drop in new listings from 844 in May to 736 last month is ominous. Looking ahead toward the end of 2022, buyers may well find themselves with significantly fewer fresh options than in years past, and fewer options overall as listings are eventually bought up or withdrawn. If a property comes up for sale that meets your needs, don’t let it pass and assume you’ll find a better one for less later — inventory is always low in San Francisco.  

ACTIVE LISTINGS

Per Realtor.com Research: https://www.realtor.com/research/data, listings published on site. Data from sources deemed reliable, but may contain errors and subject to revision. May not include Coming Soon listings published to MLS. All numbers should be considered approximate.

The chart above shows how many Active listings can be expected on any given day of the specified month. In June, those 1,285 listings represent a 10% increase from May and a 25% increase year over year. Alongside last month’s drop in new listings, this indicates a cooling in the absorption of listings. Last year — and even earlier in 2022 — it wasn’t all too uncommon for a property to go under contract within 5 or 10 days of hitting the market. Now, a swift sale is increasingly the exception rather than the norm.

PENDING SALES

House, Condo, TIC, Townhouse and Coop activity reported to NorCal MLS Alliance, per InfoSparks, as of 1 July 2022. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers should be considered approximate.

Hand in hand with rising inventory as a function of the slowing absorption is a decline in pending sales. Unsurprisingly, unsold listings in San Francisco are overwhelmingly Condos, TICs and Coops — they make up the majority of the city’s housing stock. Those property types represent approximately 72% of the 1,400+/- residential listings either Active or Coming Soon on the MLS as of 1 July 2022.

More than any other measure of the market, however, the number of listings taking price reductions reveals the market shift. Price reductions doubled from June 2021 to June 2022. It’s important to note that declining appreciation does not always precede declining prices, although it might. We’ve covered numerous stories at vulcca.com/news about homes struggling to recapture their previous purchase price. It’s too early to say if those examples of declining prices will show up market-wide, but a 5-10% pullback would be consistent with historical cycles (if such a correction takes shape).

PRICE REDUCTIONS

It’s impossible to pinpoint some future bottom or top of a market. But, to be sure, sellers who have an urgency to sell will be competing for buyers throughout the summer. Rising inventory levels will keep that pressure to reduce prices dialed in. So, if you’ve been in the market to buy, with fewer buyers out looking and everyone feeling the heat of economic volatility, it may prove a very, very good time to bargain hunt — just saying.

You can always live chat with us to get real-time data and a qualitative take on the market. Our agents are embedded in the real estate landscape, identifying unique opportunities and making deals happen. We know what’s good! Subscribe to broker insights, top headlines, off-market listings, and new development launches delivered monthly to your inbox.