San Francisco December '23 Real Estate Update Ascend RE

Inventory

New listings have declined sharply, but this is normal for November/December. We expect this number to jump as January/February data comes out. Active listings followed suit, decreasing in November with many pulling their homes with plans to re-list in the New Year. On par with historical data, pending sales numbers have ticked down but not as drastically as the amount of new listings. We expect fewer buyers to go into contract in these winter months, but despite the drop, numbers remained fairly strong. Properties sold also dipped during November which is likely to continue throughout the remainder of 2023. Monthly supply of homes is down to about 3 months, which is historically a bit high for San Francisco where we tend to hang around 2 months for most of the year.

Sales Price

In positive news for homeowners, average sales price has gone up slightly over the course of the year (despite a slight decrease in November which is normal). Average price per square foot dipped in at the end of November but had remained stable over a 10-month period (since February). It’s not abnormal for average sales price and price per square foot to differ from each other, it may mean that bigger homes are selling at higher prices but a lower average price per square foot. Homes are selling at a slower rate which is typical annual behavior and will likely tick back up in January. On average, properties are selling at their listed price in San Francisco, only a couple percentage points over list price for single family homes and a couple points under for condos. A majority of homes are selling at or below listing price (just under 50%), very typical for the holidays as homes have sat for longer and sellers are eager to get their homes sold.

Conclusion

Overall, 2023 has followed similar trends as what we’ve historically seen. The market expanded when we normally expected it to and contracted a bit as it normally does. However, inventory and sales have been down all year. Sellers are more hesitant to sell at lower price points and buyers are more hesitant to buy due to the higher interest rates on mortgages. Going forward though, we believe 2024 is going to change. Neither Buyers nor Sellers can hold off making a major life decision forever. Some people move simply for a change of scenery but most people buy or sell because of life events. Upsizing or downsizing, job change, school change, retirement, health issue, divorce and death. At some point we figure out a strategy forward despite the market. Anecdotally, our team has connected with many families over the past few weeks about a move in 2024 who are targeting the new year as their time to Buy or Sell! If you are thinking of buying or selling in 2024, now is a great time to start the conversation. If you have a friend, colleague or family member needing help, we always appreciate an introduction.