SF Condos: Post-Pandemic Market Recovery

It’s been a wild past 18 months for the San Francisco real estate market. Demand for Single-Family Homes remained strong despite reports of exodus as buyer preferences shifted in favor of more room to spread out and private outdoor spaces. The Condo/TIC/Coop market didn’t fare so well… but it does appear the worst in behind us.

The combination improved affordability in certain areas of the city and low mortgage rates has created a window of opportunity for savvy buyers. The return of jobs will translate to demand for housing, which in turn will drive home prices higher. With FDA approval for Pfizer’s COVID-19 vaccine and a growing list of businesses calling vaccinated employees back to the office in the near future, the time to strike a deal is now.

So where where are these opportunities? We’ve broken it down by district with median sales price trends and analysis, below.

Best Opportunity to Buy The Dip: District 5, District 8, District 9

Best Bet to Buy Under $1 Million: District 3, District 4, District 10

Most Affected by COVID Pandemic: District 5, District 6, District 7, District 8, District 9

Least Affected by COVID Pandemic: District 1, District 10

Most Recovered: District 1, District 6

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DISTRICT 1

Central Richmond, Inner Richmond, Jordan Park / Laurel Heights, Lake Street, Lone Mountain, Outer Richmond, Sea Cliff 

It’s safe to say that “traditional” neighborhoods weathered the COVID pandemic much better than those closer to the city’s core that historically rise and fall with economic cycles. In regard to District 1, this is due in part to the inventory of real estate being almost exclusively older and loaded with charming details that are hard not to love. They don’t make them like they used to! Combine these classic San Francisco homes with quieter residential streets, a plethora of nearby shopping, dining and transit, and with approximately 2,500 acres of public parks — you’ve got a winner in even the toughest of times.

DISTRICT 2

Central Sunset, Golden Gate Heights, Inner Parkside, Inner Sunset, Outer Parkside, Outer Sunset, Parkside

With fewer than 50 Condo/TIC/Coop unit sales in 2021 year-to-date, the sample size for median sales price in District 2 is not large enough to draw any substantive conclusions regarding the pandemic’s impact. That said, approximately 38% of sales have been less than $1 million, mostly 1- and 2-bedrooms under 1,000 square feet.

DISTRICT 3

Ingleside, Ingleside Heights, Lake Shore, Lakeside, Merced Heights, Merced Manor, Pine Lake Park, Stonestown

Perhaps the region of San Francisco with the smallest number of Condo/TIC/Coop units, District 3 has had only approximately 30 such sales in 2021 at the time of publishing this piece. With so few transactions, median price data can swing dramatically. Approximately 60% of those sales were under $1 million, made up mostly of 1-bed and 2-bed units. Larger and more expensive 3- and 4-bed condos on Summit Way that were built in 2017 and have all sold for $1.1+ million (per data reported to SFAR MLS) are predominately responsible for upswings in the chart below. Generally, the farther south you go within San Francisco city limits, the more affordable homes become; District 3 is just about as far south as you can be.

DISTRICT 4

Balboa Terrace, Diamond Heights, Forest Hill, Forest Hill Extension, Forest Knolls, Ingleside Terrace, Midtown Terrace, Miraloma Park, Monterey Heights, Mount Davidson Manor, Sherwood Forest, St. Francis Wood, Sunnyside, West Portal, Westwood Highlands, Westwood Park

While District 4 consists overwhelmingly of Single-Family Homes, you will most often find Condo/TIC/Coop units in Diamond Heights and — less commonly — Sunnyside. These units are generally at a lower pricepoint which makes them a fantastic option for first-time buyers and helps them to hold value. For example, condos in Diamond Heights Village often sell from about $500,000 for a studio and $700,000 for a 1-bedroom, and 2-bedrooms regularly sell for less than $1,000,000. Year to date, 75%+ of unit sales in District 4 have sold for less than $1 million. Note: District 4 is second to District 3 with respect to the fewest Condo/TIC/Coop unit sales in 2021, making median price data of limited use.

DISTRICT 5

Buena Vista / Ashbury Heights, Clarendon Heights, Cole Valley / Parnassus Heights, Corona Heights, Duboce Triangle, Eureka Valley / Dolores Heights, Glen Park, Haight Ashbury, Mission Dolores, Noe Valley, Twin Peaks

Having dropped over $150,000 from Q1 2020 thru Q4 2020, approximately 10% off the pre-pandemic high median sale price, District 5 is among the hardest hit areas… but it’s coming roaring back! With consideration to the region’s abundance of character-rich Condo/TIC/Coop homes at mid-tier prices and attractive central location rich with amenities, homebuyer demand typically runs high. Certain neighborhoods popular with a younger demographic have seen more movement, but homes that are a good value don’t linger on the market.

DISTRICT 6

Alamo Square, Anza Vista, Hayes Valley, Lower Pacific Heights, North Panhandle, Western Addition

District 6 is the only region with a large sample of Condo/TIC/Coop transactions (300+) so far in 2021 that has seen its median sales price fully recover from the pandemic drop and reach a new all-time high. The magnitude of the drop was similar to that of District 5 directly to the south, and having a qualitatively similar housing stock and locational appeal, we taking this as an indicator of where District 5 is headed sooner rather than later!

DISTRICT 7

Cow Hollow, Marina District, Pacific Heights, Presidio Heights

Like Districts 5, 6 and 9, unit median sales prices took a hit of approximately 10% between Q1 and Q4 2020. Little more than half of the lost value has been recovered. While the District 7 neighborhoods on the north side of town appeal to homebuyers for being quintessentially San Francisco, we’re betting on a longer recovery here for the following reasons: distance from the city’s economic core, challenging hills, and higher pricepoint.

DISTRICT 8

Downtown, Financial District, Nob Hill, North Beach, North Waterfront, Russian Hill, Civic Center, Telegraph Hill, Tenderloin

District 8 takes the cake for the most dramatic fall in median home price from Q1 thru Q4 2020 at approximately 20% with a 437 sample size reported to SFAR MLS. That number of sales has already been exceeded year-to-date in 2021 at 501. At present, the median Condo/TIC/Coop sale price is still $100,000 below the pre-pandemic high. Having a large inventory newer construction homes that present good value at present like those in District 9, we’re calling District 8 a good opportunity to buy the dip.

DISTRICT 9

Bernal Heights, Dogpatch, Inner Mission, Mission Bay, Potrero Hill, South Beach, South of Market, Yerba Buena

Given that District 9 was the epicenter of San Francisco’s startup and tech industry, we’re frankly surprised the median price didn’t drop more when everyone decided to go work remotely. Historically, home prices follow rents; average 1-bed rents in San Francisco fell by some 27% between early 2020 and early 2021. District 9 recorded 1,921 unit sales in 2020, and so far in 2021 about half as many have sold. Newer construction homes like those that dominate District 9 tend to face challenges selling in economic downturns due to there being so many like-kind units, but can be a tremendous value play when things start to turn around.

DISTRICT 10

Bayview, Bayview Heights, Candlestick Point, Crocker Amazon, Excelsior, Hunters Point, Little Hollywood, Mission Terrance, Outer Mission, Portola, Silver Terrace, Visitacion Valley

Most Condo/TIC/Coop units in District 10 are found in the Bayview / Hunters Point and Candlestick areas. Of those, the lion’s share sold recently are at 5800 Third, The Shipyard (Phase 1, Phase 2), and Candlestick Point complex (including 1 Crescent Way). These units are generally at a lower pricepoint which makes them a fantastic option for first-time buyers and helps them to hold value. Of the 69 unit sales year-to-date, all but six have been under $1 million.