Clients, friends, and colleagues:
The changes in market dynamics that began in late spring/early summer 2022 generally continued through autumn due to the ongoing economic headwinds: high inflation and interest rates, reduced consumer confidence, and volatile stock markets. All of these factors have fluctuated significantly over the period, and some readings have recently improved.
The great majority of indicators - home prices and appreciation rates, sales volumes, overbidding, days-on-market, months of supply inventory, and so on - continue to describe a market that has substantially cooled and "corrected" since spring 2022, when it appears that a long, dramatic, 10-year market upcycle peaked. The correction in San Francisco has been somewhat larger than in other Bay Area counties (note that a "correction" is not remotely similar to a crash, such as was seen during the subprime loan/foreclosure crisis). In recent months, luxury home sales have seen larger year-over-year percentage declines than the general market. But thousands of Bay Area homes continue to sell, some very quickly at over asking price. Single-family homes under $1.5M still remain quite competitive in San Francisco, while the luxury sector, & general condo market continues to be ripe for discounts. With the shifts in market conditions, pricing correctly has become an imperative for sellers.
December typically sees the low point of new-listing and sales activity - with an increasing number of homes taken off the market to await the new year - but listing, buying, and selling continues. This can be an excellent time for buyers to aggressively negotiate prices, though the supply of listings to choose from declines. The market usually begins to wake up in mid-January and then quickly accelerates into early spring. In the Bay Area, depending on economic and weather conditions, the "early spring" market can begin as soon as February.
The single, most closely watched factor will be interest rates since they have such an outsized impact on monthly housing costs and affordability, as well as on stock markets and consumer confidence.
If you have any specific questions, I'm always here to help. Wishing you all a great holiday season and rest of 2022!
|
|
|
|
|
|
|
Statistics are generalities, essentially summaries of widely disparate data generated by dozens, hundreds or thousands of unique, individual sales occurring within different time periods. They are best seen not as precise measurements, but as broad, comparative indicators, with reasonable margins of error. Anomalous fluctuations in statistics are not uncommon, especially in smaller, expensive market segments. Last period data should be considered estimates that may change with late-reported data. Different analytics programs sometimes define statistics - such as "active listings," "days on market," and "months supply of inventory" - differently: what is most meaningful are not specific calculations but the trends they illustrate. Most listing and sales data derives from the local or regional multi-listing service (MLS) of the area specified in the analysis, but not all listings or sales are reported to MLS and these won't be reflected in the data. "Homes" signifies real-property, single-household housing units: houses, condos, co-ops, townhouses, duets and TICs (but not mobile homes), as applicable to each market. City/town names refer specifically to the named cities and towns, or their MLS areas, unless otherwise delineated. Multicounty metro areas will be specified as such. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers to be considered approximate.
Many aspects of value cannot be adequately reflected in median and average statistics: curb appeal, age, condition, amenities, views, lot size, quality of outdoor space, "bonus" rooms, additional parking, quality of location within the neighborhood, and so on. How any of these statistics apply to any particular home is unknown without a specific comparative market analysis.
|
|
Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.
|
|
|
|
|
|
|