San Francisco February '24 Real Estate Update Ascend RE

Inventory

As expected, new listings increased in January after the holiday season. In fact, new listings were slightly higher than they were in January of 2023. This year’s levels were on par with new inventory levels in pre-covid years (2018/2019). Pending sales also jumped in January after hitting a low in December! A couple things to note here: January is typically the slowest month for properties to go into contract and December is still very active for 2-3 weeks prior to the start of the holidays. Not only did we see an early start to the Spring market, but also it’s a busier start than we’ve seen even in the years leading up to Covid. Sold properties in January were way down, even compared to pre-covid years. This likely is a ripple effect from a slow December market, but is not affecting the energy of the January market we are seeing. Active properties took a steep decline in the winter months and began to increase in January. Still at a relatively low mark, we are optimistic that this will start increasing in February, ramping up to a high in the Spring. Days on market also saw a significant increase in January (totalling an average of 67 days). Though this may seem like a negative trend, it really means that a lot of old inventory that sat on the market in Nov/Dec of last year ultimately sold in January. We can expect days on market to decrease in the more active Spring market. Months supply is low, which is normal at the end of the holiday season. Most sellers removed their homes from the market right before the holidays and will wait until after the Superbowl to relist them.

Sales Price

Average sales price has ticked back up in January, which is also a very interesting piece of data. January tends to be the low point of the marketplace for the entire year then prices tend to jump back up in February in the lead up to Spring. However, this year prices in January have rebounded to almost their highest point since the market began declining in June 2022. From this, we can forecast further rebounding of prices in the Spring and the market heating up earlier than usual this year! Listings are selling 97.4% of their original price on average, this is the second lowest level since 2012…This is another lagging indicator from the December market. Looking at the bigger picture, we can conclude it’s a domino effect from how poorly the fall 2023 market fared. We do expect to see a fast jump in this trend soon. Only 33.7% of homes on the market sold above asking price, also at the second lowest level since 2012 and an indication of a weak Fall 2023 market. In positive news, price per sqft has increased in January, rebounding earlier than in previous years and another indicator of a strong Spring market.

The Bottom Line

The bottom line? One word: Competition. Sellers are seeing a hotter and more competitive market than we’ve seen in almost 2 years! If you have put off selling, but feel ready now, this is THE time to start the conversation. On the buyer’s side, Fall 2023 may have likely been the market’s lowest point. Prices for many assets are still great buys, but we are seeing a quick turnaround which we expect to continue. It’s crucial to work with an agent that can spot opportunities and act fast!