As San Francisco workers flee the pricey city center and flood into surrounding areas, their condos, apartments, and homes are left to flood the market. National Mortgage News reports that both buyers and inventory increased significantly in San Francisco, but there are still not enough buyers to match the supply. Sales increased 30.2% compared to third quarter reports last year, yet the number of listings remains at a 15-year high. Some neighborhoods have 10 months worth of condos. The number of price drops jumped by 172% as well for both homes and condos combined.
"The issue is the inventory is increasing so much faster than the sales rate," said Patrick Carlisle, chief market analyst for Compass. "Any time you have this relatively huge overhang of supply, and demand is stable, you are going to see price reductions."
The market was bifurcated: single-family homes did better than condos; large homes were more popular than smaller homes; and many downtown high-rise offerings languished while listings in more suburban neighborhoods tended to trade faster and slightly above asking price.
The contrast between the single-family homes and condos was apparent in price, how long a property sat on the market, and whether the asking price had to be cut to attract buyers. The median sales for single-family homes inched up year over year from $1.57 million to $1.66 million while condo prices lagged, dipping slightly from $1.275 million to $1.25 million. Single-family listings sold at an average of 102.5% of listing price while condos went for an average of 97.5% of listing price.