Here’s one to turn heads: Real estate site Realty Hop has declared San Francisco one of the coldest home markets in the nation for the last four months in a row.
The listing site measured the difference between a home’s listing price and final sales price. “In theory, stronger markets should exhibit fewer price drops and smaller percentage discounts,” according to Realty Hop.
In February, the average San Francisco home sale scored 5.07 percent less than its original asking price, a difference of about $61,000. That puts the city in sixth place nationally. (For comparison, the “hottest” market under this standard was Gilbert, Arizona, where the median decline before sale came in at 1.69 percent, a median of approximately $8,500.)
When people imagine buying and selling homes in SF these days, they usually picture bidding wars and ever-escalating prices, so the idea that the city leads the nation in discounted sales seems surprising. In 2018, Sotheby’s International Realty reported that nearly 80 percent of houses in San Francisco sold their over asking prices.
But these recent declines aren’t much of a mystery; according to Compass Real Estate’s most recent report on the SF market, it’s common to see this type of dip during winter months.
In fact, nearly the exact same cycle has happened over the past three years, with springtime months bringing a rebound of homes selling well over asking prices. This trend is also common in most other cities.
It is potentially significant that SF’s seasonal price drops are some of the largest nationwide, though. Especially since the SF bounce back in spring of 2019 was much more modest in previous years, and declined significantly in the summer, according to those Compass figures. If 2020 contracts more, it’s possible the balance could dip into negative in other months, which could get a little scary.
It’s worth noting that these statistics are prone to manipulation; for example, some realtors will opt not to cut a home’s price but instead yank it off the market for a month or two and then list it later as an allegedly new offering. Pretty sneaky, pretty common.
And, of course, some sellers will price a home at less than its value to make sure it sells for a coveted “over asking” price figure later. Numbers don’t lie, but they don’t always tell the whole truth, either.