San Francisco median home price hits plateau?

Fri, 30 Aug 2013 06:19:28 +0000

After soaring to the sky like Icarus, the San Francisco median price for sold homes has finally fallen. Not as dramatically as Icarus fell, mind you– more like a gentle downward current pushing that price point from $915K (for both condos and single-family homes) in May of this year, down to $870K in June and then slightly up from there to $879K in July, staying fairly flat into August.

Meanwhile, a perusal of the MLS for San Francisco homes listed within close range of the current median of $879K reveals a market still rather over-heated. For instance, this unit on Ashbury is 2 beds, 2 baths, 1,300 square feet, listing at $899K. It is a recent conversion to a condo, and includes a shared yard, 1-car parking and extra storage. Still, that’s almost $700 per square foot.

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For luxury high-rise condos, we have this example in the SoMa Grand building, a 1,031-square-foot 2-bed/2-bath that includes use of community features like a lounge, gym, courtyard and spa. Listing at $895K, this one also comes with an HOA of $678 per month.

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Crazier still, but perhaps down to its location, is this listing on Homestead in coveted Noe Valley, a single-family home. No interior shots yet, as the house is still marked “coming soon,” the listing does reveal that it’s only 708 square feet. And the price, $949K, would make it $1,340 per each of those squares.

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As Paragon Real Estate Group explains:

Monthly median prices are often subject to fluctuation without great meaningfulness, but after the big, definitive jump early in the year, the median sales price has been within a 4-5% spread for five months, including a drop from an April-May spike. The idea of a plateau contradicts the recent Case-Shiller Index reports of continuing increases, but

1) the C-S Index is about 3-5 months behind current realities

2) San Francisco is only a tiny part of the 5-county SF Metro Area Index

3) The city itself has strongly outperformed C-S Index since the turnaround began – having appreciated so much faster than other places, we may be due a flattening of appreciation before other areas. And, of course, this also may be true for different SF neighborhoods which began their rebounds at different times and have accelerated at different speeds – some may be plateauing while others are still appreciating.

Other factors to consider in this slight cooling of what’s been a red-hot market: seasonality, higher-interest rates, and buyer burn-out due to low inventory, or buyers becoming more willing to push back against high prices. “We may have reached a plateau or bumped into a ceiling of what buyers are willing to pay, thus transitioning into a somewhat different market from spring’s overheated frenzy,” hypothesizes Paragon. But of course, time will tell.

What Should We Expect for Fall?

Chime in, readers: what should be next for San Francisco home prices? Have we hit the ceiling yet, or will Icarus fly still closer to the sun?

Bumped our head on the ceiling? Data via Paragon Real Estate Group. http://www.paragon-re.com/Market_Updates/

Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert

Article source: http://blog.sfgate.com/ontheblock/2013/08/29/san-francisco-median-home-price-hits-plateau/

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San Francisco median home price hits plateau?

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