Pending Home Sales Hold, Inventory Ticks Up in San FranciscoMay 22, 2023
With the number of single-family homes and condos in contract to be sold in San Francisco having effectively held over the past week in the absolute, down around 40 percent on a year-over-year basis, the net number of single-family homes and condos on the market ticked up 3 percent and continues to trend higher.
That being said, overall inventory levels are 9 percent lower than at the same time last year, driven by a drop in listing for condos, with would-be sellers either unable or unwilling to accept a drop in the values that buyers are either able or willing to pay, but with 25 percent more single-family homes on the market than at the same time last year and around 40 percent more inventory than average over the past decade, with a drop in the average asking price per square foot, which has been trending down.
Comments from Plugged-In Readers
Interesting to see the slowdown in condo listings. Without a lot of forced selling the market can continue to ride in limbo with current owners shielded in the short term by the low rates of mortgages borrowed during the late-covid, pre-inflation era.
It seems reasonable to expect residential psf pricing to continue to be under pressure, but nothing like the downward dislocations in office prices we currently observe.
Bubble Bubble .. Pop!
A good argument can be made that SF recovery/growth is now directly limited by the speed of the price correction …
I still think that the speed of price level correction is going to be pretty slow compared to previous corrections, because in the past, you had lots more forced sellers.
While there are now and presumably will be forced sellers in the coming months (due to e.g., job loss), the pace is going to be like watching a glacier melt. As noted in the last sentence in the post above, many sellers don’t have to accept a price that would force a capital loss on them this time, and so they won’t do so.
It will be slow and could take the rest of this decade to play out. The big driver will be the loss of jobs and, in particular, high paying tech jobs. When will it end, and will there be any significant influx of jobs in the years ahead? Just today Musk hinted Twitter will leave SF. The question is not if, it’s where the new HQ will land. That move along with Block and Reddit leaving mid-Market pretty much kills the Hub and reduces pressure on prices. Uber put 250K feet of space on the market last week. Space it was once going to fill with several thousand workers. The Nordstrom closures are expected to cost hundreds of jobs – though retail sector workers aren’t a factor in upward pressure on home prices in SF they are a factor in street level retail in and around the Nordstrom stores. If Ikea bails it only amplifies the problem.
Agreed. We will most likely go through a period of slow drip by drip depreciation or at best prices remaining stagnant. I don’t see prices going up at all in the next 3-5 years.
Retail adds value to residential neighborhoods. SF needs to change policies that inhibit retail. Repeal vacancy tax. Repeal rules that block franchise stores. Fast track approvals of tenant improvements. Permit private security to stop shoplifting. Keep sidewalks free of vagrants and junkies.
One of the biggest hurdles to retail, especially locally-owned non-formula, is high rent. An enforced vacancy tax will help put downward pressure on storefront rent.
There is an especial need for affordable, narrow frontage storefronts that facilitate locally-owned non-formula retail, as opposed to the wide footprint glass-fronts that are cheaper to build and are more suited to chain pharmacy, gyms, and storefront hospitals. Instead of pandering to landlords and encouraging pop-ups as a band-aid to cratered neighborhoods, the city should encourage longer-lasting small business arrangements, such as lower rent for small businesses.
I’m curious why a “wide footprint,…glass front” would be “(most) suitable” for a storefront hospital. Given the general need for privacy, I would think it would be the least desirable format.
Or maybe there’s just confusion between “desirable” and “only one willing/albe to take the space ??
Surely you’ve noticed the proliferation of opaque reflective glass on recent ground floor commercial?
The Nordstrom closures are expected to cost hundreds of jobs
333, in fact, per the EDD filing (plus 46 at the Rack)
Not able to respond direct to two beers last comment, but 2 more prominent retailers closing doors, cole hardware and banana republic, one local one corp america.
In other questionable SF policy, with potential to further damage retail recovery, no more free meter parking after 6pm, which could negatively impact restaurant recovery, as diners won’t want to risk ticket or towing.
Are SF progressive policies helping or hurting?
Isn’t Banana Republic relocating, rather than closing ?? Granted it’s relocating to a much smaller space, but still a different thing.
More complex is Williams Sonoma: closing but being replaced by Chanel; which, I tihink, is actually a relocation from a smaller space – so kind of a reverse BR. Of course WS opted not to choose one of the many vacant spaces, so certainly a net loss,