With roughly 600 new condominiums actively for sale in San Francisco, the lowest new condominium inventory level since August of 2014, October sales (103) were 17 percent lower on a year-over-year basis and prices slipped 1 percent from September, according to the Mark Company’s Condominium Pricing Index.

The Mark Company’s index, which is susceptible to changes in mix, both in terms of the type of units selling and the buildings in which they’re being sold, remains 10 percent higher versus the same time last year, but that’s down from 20 percent higher on a year-over-year basis in August, at which point sales were 12 percent lower, year-over year.

There are currently 8,900 net-new units of housing under construction in San Francisco and building permits for another 5,900 units either issued, approved or in the works.

Comments from Plugged-In Readers

  1. Posted by Dave

    Things do seem to be slowing down and backing off a bit. Lots of little signs as shown by some of the SS posts.

    Is this just a fall going to winter slowdown? Will things pick up again in the spring as many here feel?

    I don’t know. I don’t think so. I think the current cycle is peaking. Admittedly, I am a contrarian of SS with regards to this.

  2. Posted by BayviewSF

    I think it is a slowdown magnified by the seasonality. Market most likely will rise again next year, but the rate of appreciation may be slower. A 5-10% appreciation is not a bad market.

    • Posted by hgh

      Agree. The market took next years increase a little early, so to speak.

      Inventory is sitting longer than normal, in part because of the climate. People are tentative. If they have to buy, that will turn to panic, and urgency, which is where the overbids come in.

      • Posted by two beers

        “Inventory is sitting longer than normal, in part because of the climate”

        Yes, those endless rains of October are to blame!

  3. Posted by taco

    Oh man, 10% YoY. Free falling.

  4. Posted by Sabbie

    Declining sales volume appears to be a leading indicator.

    In the last cycle, sales volume peaked in 2004 while prices continued to rise until 2007. In this cycle, sales volume peaked in 2013. So, 2016 is a good bet for the next peak in sales prices.

    I think the possibility of a black swan event is higher this time though, given more instability in the system due to Fed policies. A couple of dead unicorns would probably send the market into a tailspin.

  5. Posted by moto mayhem

    the stock market is the only leading indicator. when we get a sustained 15-20% drop, then be worried

  6. Posted by Jimmmy The House Flipper

    The real estate market has reached a permanently high plateau and is re-grouping for the next upward leg. You heard it here first!

  7. Posted by Dave

    Its time for a recession given the normal cycle.

    Exports and imports to China falling.

    Commodity prices falling. Hurting especially brazil and Australia as China was buying up much of their mineral base. That demand is waning.

    Jobs report good in October but this year the US is, on average, creating fewer jobs than last year.

    Impact on real estate?

    Harry Dent who happens to be a bit dramatic and has a mized record says housing prices in Silicon Valley could drop 30% or more from their peak.

    Others see the plateau happening with a march up again of real estate prices by next spring.

    I think both scenarios are wrong. Certainly so if the US slips into recession.

  8. Posted by Diverj

    And then Lumina and Arden close and the reported trend changes.

    • Posted by SocketSite

      Except the figures above include signed contracts for unfinished units, and Lumina, Arden and Rockwell “sales” are already included in the trends.

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