Slowly but surely, the number of properties listed for sale in San Francisco has been ticking up since the beginning of the year and is currently running two (2) percent higher than at the same time last year, with the number of single-family homes on the market eleven (11) percent higher versus four (4) percent lower for listed condos.
Of the 160 or so single-family homes currently on the market, just over half are listed for under a million dollars.
And in terms of unlisted inventory in new developments about town, such as Lumina, there are roughly 750 units on the market, twice as many as six months ago but roughly half the number at the same time of the year in 2008.
I’ve found inventory data to be highly uncorrelated to anything in terms of SF real estate. An analysis I ran a long time ago showed the opposite of what you would expect to see with inventory levels rising and falling. The conclusion I made was that the levels here are simply too low to have any material impact on prices over time. The market here is far more correlated to the financial markets than inventory levels. Plus these data points without a chart of inventory levels over time are hard to use a basis for anything. As far as I’m concerned, the more inventory the better since it continues the turnover in the city. Really an amazing time to be living in San Francisco.
Resale inventory is still very low so it won’t stop price appreciation. But the 750 new condo is huge and it may slow down new condo prices.
^^The more condos (or anything) that sell at current price points the “stickier” current price levels are likely to become which will be good thing when the next recession or housing downcycle comes along. In stock parlance, it’s known as “building a base” but it simply means people are reluctant to sell at a loss so the more owners for whom lower prices would mean a loss, the less eager they will be to sell for anything lower.
I’m not disagreeing that lots of supply may slow down price increases (and could even cause decreases if they fail to sell at the asking price) but I am describing an effect that the large number of sales will cause at the price for which they actually sell, whatever it is.
Thank you all for unintentionally proving the fallacy of supply & demand when applied to housing markets.
When you build predominantly expensive housing, it makes all housing more expensive. Building a large supply of luxury condos doesn’t lower the cost of housing: it raises both mean and median prices. Simplistic supply & demand models don’t apply
If the build-it-now! mob was honest, and just said we want to build it now to get rich quick, fine, I have no problem with that.
But when the build-it-now! mob uses spurious and simplistic supply & demand models to dupe numerically- and economically-ignorant politicians and community activists that building more will make housing affordable, it’s a flat-out lie.
The only way to make housing affordable is to build affordable housing.
Why do not you go and build a lot of affordable housing for all of us? Everyone is craving affordable housing, just go build and do not waste any time here.
There’s really no such thing as “affordable” housing. Why not just make it free to all who want it?
It’s really called subsidized housing.
I do not care you call it “subsidized housing” or “affordable housing” even though it makes me dizzy.
Just go ahead to build us lots of “subsidized housing”. We want “subsidized housing”. Just go build a lot, starting today. We do not want lip service, we do not want beer, we want lots of “subsidized housing”.
A lots of “subsidized housing”!!!
The last time I checked, building affordable housing was required when developers built market rate projects.
You’re not completely off base – building more expensive housing does in fact raise the value of all housing, assuming supply is somehow constrained. Without a constraint on supply – meaning, a bunch of projects come on the market and the buyers are quickly exhausted or become more choosy – and prices will fall. So, supply and demand still applies. If there is not enough supply to meet demand, prices rise (bidding wars, etc.). Flood any market with enough supply and prices will fall, San Francisco housing is no exception. As has been well documented on this site, our population is growing faster than our housing stock. It’s not rocket science and certainly not a fallacy – more people who want housing + not enough development to meet their demand = higher prices.
I don’t think 750 new condo’s make a dent. I think the stat I’ve been reading is over the last decade on average we’ve built 1,500-2,000 new condos a year, but to keep up with demand it needed to be more like 5,000-6,000 per year. The more the better but I don’t think 750 new luxury condo’s priced at $1,100-$1,300 psf is going to help the housing shortage
Homes and condos are still selling fast and at very high prices considering the mix. And lots over asking. Demand in prime SF continues to be strong.
[Editor’s Note: SF Home Sales Slowest In Three Years, Bay Area Slowest Since ’08.]
Maybe we should all support Campos to put a housing moratorium for the whole city? Too much inventory is bad for housing market.
Hmm, I am not sure whether this article is giving the correct info. It mentions that “160 or so single-family homes currently on the market”, but there were 331 single-family homes on the market in February 2014. So inventory is down 52%, not up 11%.
[Editor’s Note: That’s not correct. At this time last year there were 140 or so single-family homes on the market.]