San Francisco January '24 Real Estate Update Ascend RE

Inventory

As expected, new listings dipped in December but will likely increase as we enter 2024. We also saw a decrease in pending sales, which is to be expected from October to January since many pending sales are typically delayed behind new listings. We look forward to seeing this number increase starting in February as we enter the Spring Market. On trend for the season, listings sold have decreased beginning in October 2023 and are likely to continue to do so until February. Following suit with pending and sold listings, active listings fell in December, hitting their lowest point since December of 2015! This most likely reflects a years worth of low inventory combined with many homes being removed from the market prior to December to be rented or re-launched in the Spring. Anecdotally, we converted several listings into rentals near the end of 2023. Month’s supply is down to 1.6 months, trending downward since September. We can conclude that this is not due to strong demand but a low amount of inventory on the market during the month of December. We are likely to see month’s supply tick back up in the Spring Market.

Sales Price

Average sales price fell significantly from October through December, going from $1,400,000 to $1,175,000. The downward trend is fairly normal for the time of year and it will probably continue to drop into January before rebounding upward in the Spring. It is worth noting that this is an abnormally large drop, which may point to many anxious sellers seeking a quicker sale. On average, homes sold at about 2% below list price, which is similar to December of 2022, but still low. In most years past, San Francisco properties tended to sell higher than list price even during the slow winter months. The percent of homes sold over list price dipped to 35% in December and had remained low for the entirety of 2023. Although average price per square foot hit a typical December low, this low point has only been matched in Dec 2022 and Dec 2017. Much like the other market measures above, we expect price per square foot to pick up in the Spring Market. This isn’t positive news, Days on market increased as we rounded out the year. This is normal during December as properties that close in December generally see longer marketing periods and price reductions to get them to close.

The Bottom Line

December of 2023 saw relatively normal market trends with some uncharacteristically low outliers. These include a significant drop in average home prices and a large decrease in inventory throughout the year. Many sellers felt understandably anxious about the state of the market toward the end of 2023. We are assuming many homeowners will see recent decreasing interest rates as a positive sign to re-introduce their homes into the market this year or finally list their home if they’ve been on the fence. We can also predict a healthy jump in inventory and prices for 2024. Spring may pose a better time to sell for a higher value and buyers should take advantage of recently dropped interest rates for a lower monthly mortgage payment. As always, we are here to help you make your real estate goals happen, simply click here to get started with a consult.