I wrote this in early February, and never finished for published it - I was about to write an update on the market - but much of what I wrote two months ago is still true - so here is the old post:
Everyone wants to know the state of the San Francisco real estate market. Of course, everyone ALSO has their own opinion. Usually the opinions I hear are based on limited anecdotal information like "I heard there were 5 offers on this one property, so the market is picking up." Of course someone else will say, "this seemingly attractive property is just sitting on the market with no activity, so it's clear that the market is slow."
I have 4 listings right now, in 4 very different parts of the city, which gives me signifcantly more anecdotal information than the average real estate agent. The first thing I can say is that each listing is very different from each other. So I've realized that I simply have 4 times as much anecdotal information, and not necessarily hard-core facts, and a difinitive answer. But after much analysis of Active (for-sale) properties, and of recently Sold properties, I think I've come to some conclusions that will make some sense of the very wide variety of opinions I'm hearing. And here they are:
1. Fewer properties are selling right now, in fact, my research shows that there were 20% fewer sales in San Francisco this January vs. last January, and the last time it was this slow was 2001.
2. Prices are up 13% this January over last January
3. But, prices are down over the top of the market just a few months earlier by roughly 10%
4. Homes are taking nearly twice as long as normal to sell
5. Two mortgage brokers have told me they've got tons of new applications, but not a lot of actual mortgages - which means lots of prospective buyers who are not buying. On the same hand, I've had very active Open Houses, that aren't translating into offers.
So fewer homes are selling, and taking longer to sell, but there are lots of buyers out looking. Since some homes are selling, you start to ask why some are, and some aren't, and I think the answer is two-fold.
1. Since buyers have more time to make decisions, and aren't facing multiple offers, they can be very picky. If a home doesn't match 90% to 100% of their criteria, they're just passing over it.