Once again, despite a pronounced slowdown in the relative number of condos and single-family homes that have been newly listed for sale over the past three weeks, a slowdown that has been driven by sellers either being unable or unwilling to accept an ongoing drop in values, the net number of homes on the market in San Francisco ticked up another 2 percent over the past week and is now 7 percent higher than at the same time last year, driven by an even greater slowdown in the pace of sales.
As such, inventory levels are still 30 percent higher than prior to the pandemic and nearly 50 percent higher than average over the past decade, with 25 percent more single-family homes on the market than at the same time last year as well.
And having ticked down in four of the five past weeks, the average asking price per square foot of the homes on the market in San Francisco is now hovering right around $1,000 per square foot, which is around 3 percent lower than at the same time last year but still 10 percent higher than the average asking price per square foot of the homes which are in contract, an expectation gap which has dropped 3 percentage points over the past month, driving by a drop in list prices.
Expect inventory levels to climb over the next couple months, with properties that failed to sell at the end of last year re-listed anew and new listing activity climbing as well, the absorption of which should provide some key insight into the lasting impact of higher mortgage rates. We’ll keep you posted and plugged-in.