When examining the current state of the San Francisco real estate market, it is evident that buyer demand has been steadily recovering from its lowest point in late 2022. Although mortgage applications still lag significantly behind the previous year's figures, many prospective buyers have come to terms with higher interest rates as the new normal and have decided to proceed with their purchasing plans. A small but notable portion of buyers are opting for all-cash transactions, taking advantage of reduced pricing and avoiding interest rates altogether.
Moreover, the number of new listings hitting the market has dropped from recently established norms. This can largely be attributed to homeowners with exceptionally low, long-term, fixed-rate mortgages being hesitant to sell their properties and subsequently purchase new ones at significantly higher prevailing interest rates. This decline in new listings has weighty implications for the dynamics of supply and demand, further intensifying the pressure on prices even in an environment of reduced overall activity.
Mortgage rates have been hovering around 6.39 percent for a 30-year fixed-rate mortgage. FreddieMac reported last week, 'The 30-year fixed-rate mortgage averaged 6.39 percent this week, as economic crosscurrents have kept rates within a ten-basis point range over the last several weeks. After the substantial slowdown in growth last fall, home prices stabilized during the winter and began to modestly rise over the last few months. This indicates that while affordability remains a hurdle, homebuyers are getting used to current rates and continue to pursue homeownership.'
YEAR-OVER-YEAR COMPARISON
SINGLE FAMILY RESIDENCES
MONTH-OVER-MONTH COMPARISON
SINGLE FAMILY RESIDENCES
CHANGE IN PAST MONTH:
SALES PRICE -5.7%
DAYS ON MARKET No Change
MEDIAN AREA VALUES
SINGLE FAMILY RESIDENCES
Q1 2023
* Denotes small sample size; Use caution when interpreting results.
YEAR-OVER-YEAR COMPARISON
CONDOMINIUMS/TIC/COOPs
MONTH-OVER-MONTH COMPARISON
CONDOMINIUMS/TIC/COOPs
CHANGE IN PAST MONTH:
SALE PRICE -5.7%
DAYS ON MARKET No Change
MEDIAN AREA VALUES
CONDOMINIUMS/TIC/COOPs
Q1 2023
* Denotes small sample size; Use caution when interpreting results.