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Real Estate Agent with Park North Real Estate CA DRE# 01893222

The 2023 San Francisco Real Estate Market Wrap-up

January 22, 2024

I’ve been trying to come up with a word that best describes the San Francisco and Bay Area real estate market in 2023, but even with a degree in literature the best I can come up with is: weird. It has been one of the strangest markets in many, many years, mostly due to either very high or very low interest rates. While the year started off fairly strong and typical, a series of interest rate hikes resulted in buyers either pausing their search or being knocked out of the market completely. By July, interest rates were over 7% and by October they were over 8%, the highest they’ve been in over 22 years. Rates then started lowering toward the end of the year but were mostly still over 7%.

Meanwhile, sellers who didn’t have to sell sat tight. With near-record low interest rate loans, owners made do with their current circumstances especially if they needed a replacement home. To swap that low interest rate for a new loan at a higher rate didn’t make sense financially or emotionally. As a result, inventory dropped to even lower than usual levels.

San Francisco wasn’t unique in this odd market. According to the National Association of Realtors, the number of homes that sold in the U.S. in 2023 was the lowest in 30 years. Sales overall were down here in San Francisco as well. The condo market, which plummeted soon after the beginning of the pandemic, continued to be a challenge. And yet as always here in our strange and wonderful city, there are still many stories of properties selling well over asking price and sometimes with a dozen or more offers.

This new year comes with more bulllish predictions. As inflation has eased, fears of a deep recession are also easing. Economists are now more confident that a “soft landing” is possible for the U.S.. Many are also predicting interest rates to decline especially in the second half of the year. (see my 2024 Predictions blog here). One potential snag in this theory is that it’s also a national election year and it’s predicted to be a volatile one, which can lead to uncertainty.

And now on to the 2023 wrap-up.These stats are for San Francisco, but if you are interested in a different local area or neighborhood, just reach out and I can also provide them to you.

Median Price:

Overall, median prices in San Francisco decreased in 2023. The median price dropped to $1,550,000 for a single family home, down 13% while condo prices dropped 6% to $1,125,000 on a year over year basis. But as always, these decreases were not across the board. In the single family home market the higher end of the market market ($2.5 Million or more grew slightly. In the condo market the mid-range ($1M – 1.5M) grew slightly as did the higher end, which grew 8%.

New Listings:

While median prices for properties dropped in 2023, so too did the number of listings. New single family home listings were down almost 20%, while condo listings were down by more than 30%.

Sold Listings:

As mentioned above, sold homes nationwide were at their lowest levels in 30 years. Here in San Francisco, single family home sales decreased 22% year over year, while condo sales decreased by one-third.

Percentage of Properties Selling Over List Price:

In spite of all of the doom and gloom that you hear about in the media, homes in San Francisco were still getting multiple offers and selling over list price, just not as pervasively as in years past. Sixty-three percent of single family homes sold over their list price, down 18%. About a third of condos sold for over their list price year over year, also down about a third compared to 2022.

Average Percentage of List Price Received:

Single family homes sold an average of 107% of their list price in 2023, down 6.5% year over year. Condos sold at an average of 99.8%, down 4%.

Months Supply of Inventory:

As fewer homes sold, the number of months’ supply of inventory rose compared to the previous year. Single family homes had 2 months of inventory at the end of 2023, up about a third. Condos had almost 4 months of inventory, up over 25%. It”s important to note, though, that months supply of inventory under 4-5 months is still considered a Seller’s market.

Average Days on Market:

Properties took a bit longer to sell in 2023 compared to 2022. On average, single family homes spent 31 days on the market before accepting an offer, up almost 30% year over year. Condos spent an average of 58 days on the market before going into contract, up 35% compared to 2022.

The fine print: All information deemed reliable but not guaranteed or warranted. Data comes from the MLS so does not include off-market and most new construction condo sales. The Bay Area 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.

Debra Donovan

Real Estate Agent with Park North Real Estate CA DRE# 01893222

Buying a Home in Probate

November 3, 2023November 3, 2023

You’re shopping for a new home and you see that a new listing has come to the market at an attractive price. It looks perfect for you, so you head over to the open house and you love it. The catch: it’s a probate sale. What does that mean and how does the sales process for probate properties work in California compared to more typical property sales?

What is Probate?

Probate is the court process through which a decedent’s estate is distributed to the heirs. This includes determining or confirming the individual who will be responsible for the safekeeping and administration of the estate. This person is responsible for securing the decedent’s assets, ensuring the decedent’s outstanding creditors are paid, and then distributing the remaining assets to the proper heirs. If a homeowner passes away and either doesn’t have a will (is intestate), or has a will but the home is not in a trust, then the probate courts will likely oversee the disposition of the estate.

How is a Home Sale in Probate Different from a Typical Sale?

A probate sale can differ from a “regular” home sale in several ways, including:

1. A home being sold through probate is exempt from some of the typical disclosures that you would find in a non-probate sale. The Transfer Disclosure Statement and Natural Hazards Disclosure are exempt from a probate sale, for example, so there will likely be less documentation and disclosure about the home than what you would find in a more typical sale.. The seller and their agents, however, are not exempt from disclosing any material facts that they know about the property which might affect the value or desirability of the property.

2. The sale must be approved by the heirs and the courts. In a more streamlined case, where the estate’s representative is given full authority to sell the property, then the sale can proceed with the just approval of all of the heirs. By law heirs have 15 days to object to the sale after receiving notification of the offer. The property purchase deposit (earnest money deposit) can be as low as 3%, which is standard for typical sales. If the sale has to be confirmed, the deposit is 10% of the purchase price.

If the estate’s representative has been given only limited authority to sell the decedent’s home, the sale of the property must be confirmed by the probate court. In other words, the judge has to sign off and confirm the sale of the property, and it’s the court’s job to get the best possible price for the home.

Court Confirmation:

In cases where the court must confirm the sale of the home, it now becomes a 2-step process:

Step 1: The listing agent will market the property and set an offer date like any other property sale. On offer day, a certified check of a 10% deposit made out to the escrow company must accompany all offers. The best offer “wins” and goes into contract, contingent on the probate court confirmation. The buyer can then complete and remove any contingencies that were in their offer. Once these contingencies are cleared, the estate’s attorney will schedule a court date to confirm the sale. In the meantime, the property continues to be marketed but the list price is changed to the overbid price (see below).

Step 2: As mentioned above, the court has a duty to get the best possible price on the property for the heirs. To do this, on the court date set for the sale confirmation other buyers may overbid on the property in an auction-like process. There is a specific way that the courts do this. The formula for the first overbid price that is marketed after the offer date is 10% of the first $10,000 ($1000) plus 5% of the remainder of purchase price. If there is an overbid, the judge will continue to increase the bidding price until the highest offer is bid. This may or may not be the original buyer in contract for the home. The highest bidder must then provide the courts with a 10% certified check for the overbid amount as their deposit. If it is a new buyer who prevails, their offer is non-contingent, so any buyer investigations or financing must be squared away by the court date.

Being open to probate properties is one way to expand your opportunities, especially when inventory is tight. It’s not a process for everyone, but if you do decide to pursue such a home, be sure to work with a real estate agent who understands the probate process.

Debra Donovan

Real Estate Agent with Park North Real Estate CA DRE# 01893222

San Francisco Real Estate Market First Half 2023

August 4, 2023

Home prices remained restrained and inventory scarce through the first half of 2023. It’s important to keep in mind for context that the first half of 2022 was exceptional, with prices soaring higher and higher. What we’ve seen for the first half of 2023 is median prices closer to pre-pandemic prices. How long that will continue remains to be seen. We also have record lows of new inventory. As interest rates continue to rise, it can seem impractical for homeowners to sell if they bought or refinanced in previous years and now enjoy a very low interest rate. So up-sizers and down-sizers alike are choosing to either stay put or rent their current home instead of selling it as is more the norm. And yet, in spite of all fo the doom and gloom you’ve been reading, there are many anecdotal stories of homes selling well over list price with many multiple offers recently.

Median Price:

Median prices for the first half of 2023 were down double-digits for both single family homes and condos. Single family homes saw an over 18% decrease to $1,570,000 while condo prices dropped almost 9% to $1,150,000

New Listings:

As discussed above, new inventory has been quite anemic. New single family home listings were down 27% during the first half of the year when compared to the same time frame last year. New condo listings were down almost 40%.

Sold Listings:

Due to lack of listings, the number of listings sold over the 1st half of 2023 was down significantly for both single family homes and condos. Single family home sold listings were down 32.2%, from 1,336 sold in the first half of 2022 to just 919 sold over the same period this year.

Percentage of Properties Sold Over List Price:

Just 60% of single family homes sold for over their list price in the first half of 2023, down 29% compared to the 86% that sold over list in the first half of 2022. Almost 35% of condos sold over their list price in the same period in 2023, down almost 39% over the first half of 2022.

Average Percentage of List Price Received:

Single family homes sold for an average of 7% over their asking price in the first half of 2023, down almost 11% compared to the same time in 2022. On average, condos sold for their list price during the same period, down almost 6% compared to the fist half of 2022.

Months Supply of Inventory:

Months Supply of Inventory, or MSI, is the inventory of homes for sale at the end of a given month, divided by the average monthly Pending Sales from the last 12 months. Also known as absorption rate. The lower the supply, the greater the competition and the more of a seller’s market. For the first half of 2023 single family homes had just 1.8 months of inventory, up over 38% while condos had 3.3 months of inventory, which is up almost 14% compared to 2022. This is more a commentary on how tight things were in 2022.

Average Days on Market:

Single family homes spent an average of 31 days on the market in the first half of 2023, up 55% compared to the same time frame in 2022. Condos spent 59 days on average on the market, up almost 60%.

Debra Donovan

Real Estate Agent with Park North Real Estate CA DRE# 01893222

Q1 2023 San Francisco Real Estate Market

April 27, 2023

The first quarter of the year was a rocky one for the San Francisco real estate market. The confluence of rising interest rates, inflation, tech layoffs, and a deluge of rain all contributed to a slower than normal January and February, with buyers waiting to see what would happen and sellers postponing their home sales due to weather. Although the weather dried and buyers were back out in force in March, overall it was a lackluster quarter.

Median Sales Price:
The median price for single family homes dropped almost 18% in Q1 2023 when compared to the same quarter 2022. Condo prices were off over 7% compared to last year.

New Listings:

New listings were down significantly for both single family homes and condos. Single family home listings were down almost 32% while new condo listings were down almost 50%. Many who have bought or refinanced for incredibly low interest rates are not as motivated to sell if they don’t have to, leaving a dearth of new properties.

Sold Listings:

The number of listings that sold also decreased in Q1 2023 vs. Q1 2022. Partly this is due to fewer homes on the market, but it’s also because January and February were rainy and slow so homes stayed on the market longer.

Percentage of Properties Sold Over List Price:

During slow Q1 fewer buyers meant fewer competitive offers and thus, fewer properties selling over their list price. Almost 55% of single family homes sold for over their asking price, down over 35% compared to the same quarter last year. About 32% of condos sold for more than their list price, down 41% compared to Q1 2022.

Average Percentage of List Price Received:

Single family homes sold for an average of 105.4% of list price, down 12.6% compared to over 120% in Q1 2022. Condos sold for an average of 99.6%, or just under list price, in the first quarter. This was down over 5% compared to the same quarter last year.

Months Supply of Inventory:

Month’s supply of inventory, or MSI, measures how quickly homes are selling through in the current market. An MSI of 5 months or less is usually considered a seller’s market, and 6+ months of inventory indicates a buyer’s market. In Q1 2023 single family homes had an MSI or about 1.5 months, still a seller’s market and yet up 25% compared to the same quarter last year. Condos had 2.7 months of inventory, up 8% compared to last year but still in seller’s market territory.

Average Days on Market:

Single family homes spent an average of 37 days on the market before accepting an offer last quarter, up over 54% compared to the same quarter last year. Condos spent an average of 63 days on the market, also up about 54% compared to Q1 2022.

Debra Donovan

Real Estate Agent with Park North Real Estate CA DRE# 01893222

October 2022 San Francisco Real Estate Market

November 28, 2022

From what you’re seeing and hearing in the media, you might think the San Francisco real estate market is in a free fall. Don’t be fooled. What is happening is a calming of the market, not necessarily a bad thing. Median prices were down year-over-year to about the same as what we saw in October, 2020. While interest rates are up, resulting in more of a balanced market than what we’ve seen in over a decade, buyers are still buying and there are still fewer sellers selling. As a result, it’s still a seller’s market though for many properties the heyday of multiple offers has passed for now and some are staying on the market longer. Still, homes that are well prepped for sale and properly priced are still seeing swift sales and some are still getting multiple offers.

So if you’re thinking of buying, now’s the time to jump into the market before interest rates rise again. You’ll have less competition than you’ve had in the past.

If you’re thinking of selling, today’s market means preparation and pricing are everything. And of course, patience.

Here are the statistics below,

Median Price:

The price for a single family home fell about 7% in October compared to October 2021, making it about the same as the median price in 2020. Condos were also down 4% year over year.

New Listings:

New listing were again down year over year. New single family home listings were down more than 27% while new condo listings were down almost 25%

Active Listings:
Like new listings, active listings -those still on the market at the end of them month – were also down though perhaps not as low as in the past. Active single family home listings were down 8% while active condo listings were down 19%.

Percentage of Properties Sold Over List Price:

Fewer San Francisco homes are selling for over their asking price. As properties sit on the market a bit longer and competitive multiple offers are not as rife, more homes are selling at or close to their offer price. Though not all. Almost two-thirds of single family homes sold for over their list price in October, down 24% compared to October 2021. Only 37% of condos sold over their list price, down almost 40% year-over-year.

Average Percentage of List Price Received:

Just as the percentage of homes overall that sold over their list price decreased, so too did the average percent of list price received decrease. Single family homes sold for 107% of their list price in October, down 8% year over year. Condos sold on average for just about their list price, 100.3%, down 5% compared to October 2021.

Months Supply of Inventory:

MSI for both single family homes and condos crept up in October. Single family homes had 2.2 months of inventory in October, up 16% year over year. Condos had 3.6 months of inventory, up 9%. To put this in perspective, last October the stats were 1.9 months and 3.3 months respectively, so while the change seems significant it really isn’t.

Average Days on Market:

Like months supply of inventory, the average days on market that a property was on market before accepting an offer also increased. Single family homes spent an average of 28 days on the market, up 40% compared to October 2021. Condos spent 42 days on the market on average, up 24% year over year. Like median sales price, these statistics were also about the same as October of 2020.

Debra Donovan

Real Estate Agent with Park North Real Estate CA DRE# 01893222

Q3 2022 San Francisco Real Estate Market

October 17, 2022

Rising interest rates and a volatile stock market shifted the San Francisco real estate market in the third quarter. Buyer demand waned as their spending power fell while interest rates rose. Seasonality may also have played a role because the summer months are typically slow.

Meanwhile home sales slowed a bit and properties took longer on the market to get into contract compared to the same quarter last year. Even so, we are still in sellers’ market territory here in San Francisco.

Median Price:

The median price for a single family home slipped almost 9% percent in the 3rd quarter compared to the same quarter last year. Condo prices dropped 5% to $1,147,500.

New Listings:

New listings for single family homes and condos were also down for the quarter. There were fewer than 850 new single family home listings in Q3, down 16%. Fewer than 1100 condos came on the market in Q3, down 22.7%.

Sold Listings:

Sold listings decreased for both single family homes and condos. Single family home sales were down about 28% while condos sales were down 34%.

Percentage of Properties Sold Over List Price:

As demand slows and home options for buyers pick up, we are seeing fewer bidding wars for properties, resulting in the percentage of properties selling over their list price to decrease. Just 74% of single family homes sold for over their asking price, down 12% compared to the 3rd quarter 2021. Just 38% of condos sold for over their list price, down over 30%. Seasonality can play a role in this as the summer is typically quieter.

Average Percentage of List Price Received:

The average percentage of list price received in the third quarter for single family homes was 107.7%, down 7% compared to last year’s third quarter. Condos sold on average 100% of their list price, down less than 1% of what they sold for in 2021.

Average Days on Market:

Another indication of the slowing market is homes staying on market longer before accepting an offer. Single family homes spent an average of 25 days on the market in the third quarter, up almost 14% compared to Q3 2021. Condos averaged 52 days on the market, up a third compared to last year.

Months Supply of Inventory:

While the months supply of inventory, which illustrates how long it would take for the existing homes to sell through based on current demand, has increased for both single family homes and condos, it remained in seller market territory in the 3rd quarter.