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San Francisco housing market off to sluggish spring start

ew Bay Area housing figures from March show that buyer demand began to rebound from the depths of the market’s winter slowdown, but with more muted demand and far fewer new listings coming on the market compared to the past two years.

The number and percentage of listings going into contract are up, overbidding percentages continued to climb and days-on-market are starting to drop as the spring selling season kicked off late last month, Compass Chief Market Analyst Patrick Carlisle said. But even though conditions have been improving, the market remains significantly weaker on a year-over-year basis.

In San Francisco, the number of new listings coming on the market continues to be very low compared to the past two years, as potential sellers hold off from listing their homes due to the doubling of interest rates since early 2022, which he said is undoubtedly holding back buying activity.
Nonetheless, the total number of active listings and “coming soon” properties listed for sale in the city as of April 1 stood at 1,082, compared to 1,121 the year prior.

In terms of condos, while the median sales price in the city is down about 7%year-over-year, the price for condos actually increased slightly, from $1,127,500 in the first quarter, up from $1,115,625 in the fourth quarter of 2022.

Vanguard Properties co-owner Frank Nolan told me that he saw a week-over-week spike in the number of units going into escrow in the city in early spring. “We hadn’t seen that many sales just quantity in a one-week period in the city since last September,” Nolan said. “We had a good amount of sales at the company — it was almost a normal spring.”

Avenue 8 CEO Justin Fichelson told me that higher interest rates have turned some buyers around, but overall, people are becoming more comfortable with the situation. “Rates are not going to go back down,” he said.

Inventory is slim outside of downtown San Francisco. He said for a home in Belvedere or Pacific Heights or NoPa, there’s not a lot out there, noting that properties without parking are especially facing headwinds right now.

Across the region, no Bay Area counties experienced median home sales price growth in the first quarter of 2023 compared to the same period last year.

In terms of price points, year-over-year declines of sales in the highest price segments have exceeded drops in less expensive home sales, and their demand-to-supply ratio is much weaker. Luxury home sales have been hit harder since the market correction began in mid-2022, though they too have been rebounding in 2023, Carlisle said.

Despite the tight inventory, significant properties are still coming to market in the city, such as an 8-bedroom, 7-bathroom Pacific Heights mansion at 2698 Pacific Ave., listed recently by Compass’ Nina Hatvany for $19.95 million.

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