Is San Francisco Housing Market topping?

Question

I had reached out to a realtor around 3 weeks ago for a prime location apartment in an apartment complex.

He called me again yesterday.

Are we topping?

Chris Mason · Answer

Real estate market in the Bay Area is cooling.

What exactly that will translate to is anybody's guess. My guess, and it's just that a guess, is that appreciation is going to slow and the balance of power will shift away from listing agents and be more balanced between buyer/seller (shift has already happened in no small part, actually).

Edward Liu · Answer

Across the country, not just in the bay area, real estate is cooling.  I have investments in TX, Kansas City, Ohio, a number of east coast cities, FL, etc.  Every city is reporting signs of slow down - longer DOM, seller reducing prices, etc.

I can not speak for SF.  Below are 2 example I have personal knowledge on:

My uncle just sold his home in Cupertino (Apple headquarter) in October after house was 2+ months on the market.  A 2300 sq ft one floor 4 bedroom home with swimming pool and big lot (8000+ sq ft).  Asking price was $2.7M, it was sold for about $2.3M.

I see similar price reductions in Palo Alto, where I live.  In Nov 2017, my real estate agent told me she sold a home in Palo Alto, 2 bedroom 1 bath about 1200 sq ft with 5500 lot for $2.8M!  She told me about 2 weeks ago that she is listing a home 1 block away from it, 3 bed 2 bath 1600 sq ft  with 6500 sq ft lot.   Home is completed remodeled inside.  Price reduced from $2.6M to $2.3M, still no buyers.  Seller has just pulled it from market.

High end home prices seems to have dropped quite a bit in the bay area.

Ethan Cooke · Answer

@Neel Jain - I have been a homeowner in San Francisco for 20 years and have followed the market for SFH’s during that time. I’ve seen the same pattern that @Frank Wong is referring to....a long run-up, then a modest 2-year drop, then a 2-year return to the previous high, then another long run-up. Barring an earthquake or other natural disaster, I think homes in SF will continue to be a solid investment over 10, 20, 30 years. But the numbers always have to be right. And given how hot the market is, that is more true than ever.

Frank Wong · Answer

The SF market has slowed down and prices have come down from its peak a few months back. Does this mean it has topped? We don't know this can be a slow down before it bounces back its upward trend. The market can remain flat.

What I do know is that prices cannot continue at the pace that it was on.  Pullbacks are healthy and a balanced market is good.  Maybe this is a good lesson for all new investors who have seen only one UP market to know that real estate doesn't always go up.  It can go down or sideways.  Yes, I get it if you look at a 20yr chart real estate has a nice beautiful uptrend.  Short and intermediate timeframes up, down, and sideways come in every real estate market.

Amit M. · Answer

socketsite = suckitsite btw

self serving sanctimonious editor

adds no value to discourse

Gi'angelo Bautista · Answer

You can check the market reports here at this website to make your own opinion. https://www.bayareamarketreports.com/

Jay Hinrichs · Answer

Keep in mind that we were in a market that was not normal and not sustainable we are just retreating back to a normal market were market time is normally 90 days for DOM .. that's been more normal.. its not normal to list a property and have 17 offers first day..

and along with that its the time of year it always slows down right about now.. the turn key folks I know though are still plowing through their inventory.. as investors are buying for cash flow and as long as the numbers work they pull the trigger.

Matthew Ryan · Answer

@Neel Jain - We barely have an inventory problem. Still one of the lowest ranking cities for supply delivery. NYC and Denver, last I saw, were #1 and #2.

Amit M. · Answer

As far as the actual city itself, the story is mixed. The higher end (> $4 mil) has softened, but starter SFH’s in the cheaper hoods ($1-1.5 mil) are still selling like hot cakes. And some neighborhoods are doing better than others (in the mission for instance, $2-3 mil SFH’s are selling briskly.) Overall it’s not as crazy as a few years past, and the IPO effect isn’t easy to measure, yet.  But if you’re a buy and gold (unintentional typo, but I’ll keep it ;) investor, who cares?

Don’t rely on crap media like socketsite, aka suckitsite for the San Francisco market. The editor is an insufferable a**hole, who deletes contrarian comments like he’s swiping mosquitos in the Florida heat.

Paul Vang · Answer

I'm glad the market is slowing down a bit. All the homes I've been following in the Sacramento area has dropped 10-15k+ and they still have not sold.  The same floor plan home in the same neighborhood were in contract within the week of posting in the beginning of the year but now they have been seen on the market for a few months with only a few offers.

Is San Francisco Housing Market topping?

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