2017 is now in the books, so here’s a look back at how real estate fared last year. Not surprisingly it was all about inventory…or lack thereof.
Median Sales Price:
Unless you’ve been living under a rock, you probably already know that home sale prices increased in 2017. Single family homes ended the year with a 12-month rolling median price of $1,420,000, up 7.2%. Condos and lofts prices were up 5.5% to $1,155,000 for the year.
2017 Median Price by Number of Bedrooms:
I thought it would be interesting to see what the annual increase in median price for homes were when broken out by number of bedrooms.
Single Family Homes:
Two bedroom single family homes saw the greatest percentage of increase in median sales price, followed by 4+ bedrooms, and then 3-bedroom homes.
One could assume that the clamor for 2-bedroom homes shows a large number of buyers competing to get into the entry-level of the market, but it’s also interesting to note that there was a correlation between the number of homes that came on the market and the percentage increase in sale price.
For example, only 654 2-bedroom single family homes came on the market last year while the median sales price increased 12.4%. There were 955 3-bedroom homes that came on the market and the median sales price rose only 2.4% over the course of 12 months. In the middle were 4+ bedroom homes, of which there were 855 new listings over the year, and the median sales price increased 6.8%. Perhaps the relative scarcity in available homes of a certain size also had an impact on how much more buyers were willing to pay for them.
Condos and Lofts:
Condos and lofts told a fairly similar story in 2017. There was seemingly (in comparison) a glut of 2-bedroom units, 1,379, that came on the market last year with the median sales price increasing 4% over the year. 573 3-bedroom units hit the market with their median sales price increasing 12.7%. But a measly 65 units with 4 or more units came on-market and their median sales price decreased 2.5%. Thanks to an influx of newly constructed condos, which are typically not included in MLS sales, resales of condos and lofts cooled slightly in 2017, particularly in the higher end of the market.
New Listings Overall:
Overall, the number of new listings that came to market in 2017 decreased compared to the previous year. Single family home listings were down almost 5% and condo/ loft listings decreased about 6%.
What’s in Store for 2018?
I hope I’m wrong but it doesn’t appear that there will be a dramatic rise in inventory supply in the coming year (the exception being new construction condos that are slated to be completed).
What could change, however, is a decrease in demand. It remains to be seen how the new tax laws will affect buyers’ interest or ability to purchase due to the decrease in the mortgage interest and SALT deduction caps. Anticipated interest rate hikes could further dampen buyer interest. Whether this will lead to a moderation of housing price increases remains to be seen. San Francisco remains a highly desirable place to live and local IPOs could just keep the market chugging along as it has been.
The fine print: All information deemed reliable but not guaranteed or warranted. Data comes from MLS so does not include off-market and most new construction condo sales. The San Francisco real estate market is dynamic so statistics can change on a daily basis. These statistics are meant to be a snapshot of the day and time they were pulled.