Wait for it...Home prices in San Francisco have just dropped for the first time in four years.
According to Redfin, home prices fell 1.8 percent year-over-year in March for the first time in four years, Business Insider reports. Additionally, the share of Redfin offers on San Francisco properties facing competition has dropped from 94 percent in 2015 to 77 percent in March. According to Redfin Chief Economist Nela Richardson, this suggests that the price drop has nothing to do with inventory, but with buyers finally saying enough is enough when it comes to the absurdly high home prices in San Francisco.
While sales continued to grow at an impressive clip of seven percent in 2015, the low inventory will not allow a similar pace in 2016. Regardless of homebuyer demand, if there is nothing to buy, the sales will not continue to grow.
Unless a new influx of listings occurs nationally, competition and homebuyer demand will remain strong, but sales may begin to stagnate or even decline in some markets.