Nothing like a global pandemic to turn the world upside down. The real estate market in San Francisco was no exception. Interestingly, after the initial shutdown that destroyed the traditional “spring selling season,” we seem to have gone back to some semblance of a normal fall selling cycle, with November 2020 giving us the slowdown typical of the holiday season. Here’s what else current data shows both for San Francisco market and the nine Bay Area County housing markets in 2020. Price points are different for each, but the trends are strikingly similar.
Median Home Price Appreciation
Here’s a look at percentage changes for median house sales prices since 1990. The big takeaway? In the early 90s, the median house price in San Francisco was about $300,000. Fast forward to 2020, and it’s running about $1.65 million.
SF Median* Condo Sales Prices Compared to All Housing
This chart compares median sales prices of condominiums for the third quarter of the past three years (2018-2020) broken down by bedroom count and compared to the median price of the housing stock as a whole. Why is this interesting? The pandemic changed buying trends significantly. Buyers realized they require both more space and more separation of space. It’s also significant because more condo inventory came to market faster than we saw during the Great Recession of 2008 to 2012, but the median prices of condos as a whole barely budged. A deeper dive into those numbers shows why. High-end condo sales increased significantly, propping up the median sales price, while one bedroom and studio condos have decreased by 12%, which is more in line with what one might anticipate with the increase of inventory San Francisco experienced.
Median House Sales Prices
Here’s a look at third quarter median house sales prices for each of the nine Bay Area counties, with Santa Cruz, SF Bay Area aggregate, and SF condo prices as separate line items, as well as California and the US as a whole. Note that San Francisco and San Mateo have alternated in recent years, but San Francisco always has the highest median condo pricing in the area.
New Listings Coming on Market
This chart highlights the November nosedive, although what isn’t noted is the new listing activity that ticked up in the first week of December. Still below pre-November numbers, but activity nonetheless.
Market Dynamics and Seasonability
This chart measures market activity based on listings going into contract — it’s significantly higher if we take a year-over-year look ( a whopping 40%!) but also it shows that historically, prices rise the most in Q2 — aka spring — sometimes helped along by the fact that luxury home sales are incredibly seasonal. Think long summer vacations and winter get-aways in the Alps as one of the many reasons for that.
Here’s the thing about data and statistics in the world of real estate. Context is everything —without it, you really are just looking at a number and anyone can (and many often do) cherry pick a statistic to support one argument, bias or theory. Any meaningful trend will be reflected over the longer term and across a wide range of supply and demand statistics.
Best practices are to use any charts or graphic as an indicator — and the longer the better. Stay away from average sales prices, which can be wildly misleading. For example, a single large sale with a small sample size (say, nine home sales in a particular area) can change an average sales price by $500,000! The median sales prices are much better indicators and rolling median sales are best, though even they can be misleading and/or misused intentionally if you don’t know what you’re looking at.
In looking at these graphs, keep in mind that the year-to-date data is most reliable, rolling averages rank second, and monthly data is close to useless, as it fluctuates so wildly.
If you need help interpreting market data and what it means for you reach out, I’d love to chat.