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  • Writer's pictureKevin Peterson

December 29th: Real Estate Trends In The SF Bay Area

Updated: Dec 31, 2023


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  3. I make calls and knock on doors weekly to find off market properties

  4. I constantly shop interest rates - I love helping my clients save $$$


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Executive Summary


Looking back at this 2023 holiday season, SF Bay Area real estate transactions slowed (as anticipated) in December as most focused on holidays and travel. The SF Bay Area sales prices were down month-over-month due to the lower quality of inventory sold, i.e. many of these homes needed work (e.g. new kitchen or bath). Interest rates, which peaked at 8% in October, are now back to 6.7%. Come this spring, we anticipate sales prices to be going up, up, up due to interest rate drops predicted by the FED and the overall market sentiment.


Key take aways ....

  • LOW INVENTORY - This month (December), we saw 1,653 sales, the 3rd lowest month since 1999. We hit an all-time low of 1,266 in January of 2023. For comparison to the 2008-2009 Great Recession, in February of 2008 there were 1,743 single family homes sold.

  • 30 year mortgage rates fell month-over-month from 7% to 6.7%.

  • What sold the most over asking? A Belmont townhouse was listed at $1.55M. Then it was sold at $3M 69 days later.

  • What is taking the longest to sell? San Francisco condos, especially those between $2.3-$2.8M. These took over 223 days and went for an average 6% below asking.

  • What is happening to sales prices? In general, prices are above 2021 levels. 

  • Are the holidays a good time to sell or buy?

    • Sellers have very little competition and can expect multiple offers for well priced homes. Now is a great time to test the market with an "Off Market" listing. This strategy keeps your Days On Market (DOM) low while you test what buyers like.

    • Buyers have less competition as many are "pausing their searches" until better inventory comes along in the Spring.

    • Investors are gobbling up fixer uppers at fairly aggressive sales prices. This will mean the After Repair Values (ARV) will need to be strong in the near term if planning to sell.


Off Market Properties:

  • San Mateo (4 PLEX) Two 1 bedrooms, two studios

  • Santa Cruz (1622 sqft) 4 bedroom, 5 bath, 1-car garage on oversized lot

  • Redwood Shores (1770 sqft) 3 bedroom, 2 bath townhouse

 

Table of Contents:


 

How Are The SF Bay Area Real Estate Markets?


Overall, the San Francisco Bay Area real estate markets are maintaining sales prices. Inventory levels are low due to seller's "Golden Handcuffs", aka cheaper mortgages they purchased with or refinanced. This is resulting in potential buyers competing against limited inventory.


San Francisco Bay Area December 2023 real estate trends by sales price per square foot, days on market, and number of pending


SF Bay Area Real Estate Trends - Month over Month (MoM)


The charts below are month-by-month heat maps of pricing in the SF Bay Area. They are grouped by county and property type (Condo, Single Family Home, Townhouse). The metrics are Price Per Square Foot, Days On Market, how many sold, and the List To Sales Price Ratio. Green indicates items keeping prices up in comparison to previous month's metrics. Red indicates the opposite, i.e downward pressure on sales price towards a Buyer's Market.


(Click on each county's data to make larger). Make county / location bigger than MoM.






SF Bay Area Real Estate Trends - Year over Year (YoY)

Here's the data to support the year over year price growth (supply versus demand) we are currently experiencing.


Inventory -

  • Every year we see active and sold inventory go up then down, a predictable cadence. How high or low is dependent on the next metric, Months of Inventory or the rate of change in inventory being sold.


Months of Inventory -

This metric tells us how long it would take to sell all the homes on the market if no new listings were added. Five to six months is considered a balanced market, anything less is a seller's market.


  • As active inventory goes up and the rate of sales goes down, this key performance indicator (KPI) will continue to tick upward. This metric is telling us that there are less buyers for condos right now.



% Over Asking vs. DOM -

Related to Months of Inventory and the rate of change are these next two KPIs - how much over asking a home sold for and how fast it was sold, i.e. Days On Market.


October rates peaked which resulted in less sales going over asking as well as sitting on the marker longer.



Sales Price -

If you were a buyer in February 2023 of a single family home, kudos to you!! Right now, holding stable across the 5 counties but each property and neighborhood is unique so this is a general guideline.



Please reach out to schedule your free consultation to discuss your home price or home search.

 

What's Selling The Most RIGHT Now?


Here are the pending details.


SF Bay Area Real Estate Trends
SF Bay Area Real Estate Trends - Pending volume by Price Range and county

 

FED, Mortgage Rates & The Stock Market

  • FED - THE CME Group predicts a 75% chance (as of right now) that the FED will LOWER rates come the MARCH 2024 FOMC meeting.

  • Mortgage rates are down from 7% last month to 6.67% this month.

  • Stock market has rallied through November, with the tech sector (QQQ) up over 55% year to date. This is helping buyers with their down payments. TBD if this continues into 2024 spring season.

  • When will the next Recession occur? Check out my infographics in this blog post for a brief primer. Then we can discuss the rest over our next coffee.

  • At KPeterson.realty, we know not every lender is created equal and we work with lenders who's rates today are around 6% for 10/1 ARMS. Our lenders also may value your RSUs better than others. Reach out and tap into our network.


SF Bay Area Real Estate Trends - Tech Layoffs by employee count and company count since 2022
 

How We Help Our Buyers

  • We work with the best lenders who are able to beat the current interest rates (some as low as 6% on a 10/1 ARM).

  • Search For Homes by customizing your financial situation before contacting a lender to determine what you can afford.

  • Investing or not sure which areas to look in? Explore Markets to generate reports that analyze a city by days on market, average home price, price per square foot, average number of bedrooms / bathrooms / square feet in YOUR price point.


How We Help Our Sellers

  • We have a $0 down / 0% renovation program in which you don't need to pay back for one year, giving you flexibility on when to sell. The goal is for every $1 spent on renovations to net (on average) a $2 to $4 return on investment. Every family has a unique real estate scenario based on their needs and circumstances. Feel free to schedule a consultation with me today.

  • Click "What's My Home Worth" to find out the rough value of your home and automatically monitor it monthly. It also shows you various options for your equity (refi, home equity line or loan, etc).

  • If you'd like a more specific valuation of your home, give me a call.


Check out our last few or peruse all of them at https://www.kpeterson.realty/blog



SF Bay Area real estate trends - days on market versus sale price to list price ratio - single family homesSF Bay Area real estate trends - KPeterson.realty

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