Having ended 2018 with around 36 percent more homes on the market in San Francisco than there were at the end of 2017, which is right in line with the trend we’ve been tracking over the past couple of years, the number of homes currently in contract to be sold is starting 2019 down around 10 percent with the average list price per square foot of all the homes in contract hovering around $880, down 5 percent versus the first week of 2018.
And despite the seasonal culling of unsold listings, most of which are destined to return to the market as “new” over the next quarter or two, the percentage of listings in San Francisco which have undergone at least one price reduction is now running around 25 percent, up 8 percentage points versus the same time last year and versus a 5-year average of 19 percent at the start of the year.
2019 might be interesting. It seems like many factors are coming together that might result in a price decline for SF real estate.
-Rising interest rates
-Tech stocks getting clobbered hurting RSU income
-Weakening Chinese economy reducing foreign investment
-The US’s own potential economic woes
-New tax laws taking effect reducing home ownership benefits
-Increasing supply of homes for sale, especially new condos buildings coming online
Let’s see what happens.