Happy New Year from Dennis Eison

hello January 12, 2022

Real Estate

Happy New Year from Dennis Eison
Welcome, welcome, welcome to 2022. Low inventory here in San Francisco gave us Realtors® a short respite. I took advantage of the slowdown and spent some time tailgating and having some fun at the 49er games. 
 
For months, I’ve noted we’ve been trending toward a market with a normal level of inventory. Now, in just one month, we went from slightly high inventory to very low inventory. Active listings (inventory) dropped by 42% from November to December. The last time inventory was this low was during the holidays in 2018. Additionally, while it’s normal for new listings to hit bottom in December due to the holidays, December 2021 took it to an extreme: It was the slowest month on record for San Francisco’s MLS. Just 134 units hit the market.
Pending sales dropped by 50% going into December, the lowest level since the start of COVID. Historically for the month of December, it is a tad on the high side, but it is back into normal territory. Sold listings are dropping and should continue dropping through January due to the low inventory and low pending sales. Overall sales price dropped by 4% month over month, but a slight decrease during the holidays is considered normal. Housing prices, which have been decreasing since a June 2021 peak, dropped by 10%, while condominium prices actually trended upward. Days on market have increased substantially during the past 2 months, from 13 in October to 23 in December. Overbidding decreased to 6% over asking. I expect this good news for buyers to be short-lived, though, as this number is likely to increase again in the spring. Percent of properties that sold over list has trended downward for two months to 59%; normally, 60%–70% of properties in San Francisco sell over asking. Inventory is down to 1.5 months — the lowest amount since 2014.
 
Even as we reach two years in the COVID marketplace, surprises still abound. We have hit records for highest inventory ever seen in San Francisco and lowest number of days on market. In December, we hit some record lows for new inventory coming on the market.
 
Honestly, I think at least some of this slowdown was due to people just needing a break, be they homeowners or agents! I suspect the record low inventory won’t last, and we will see new homes hitting the market soon as spring season springs up. I don’t think inventory will be as explosive as last year, however. On the buyer side, I wouldn’t expect quite as many available options as last year, especially in the condo market. This may mean competition will be fiercer come spring.
 
It feels good to start a fresh new year, and I hope you will let us know if we can be of help to you in any way as 2022 unfolds.
 
We wish you and yours a very happy new year and good health and go 9ers!
 
Thanks,
Dennis

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