San Francisco's Real Estate Market is On Fire
On Monday, we read about the housing markets in Portland and Seattle, and how fewer and fewer homes are selling for below their asking price. The same trend is happening with homes for sale in San Francisco, and the change has been dramatic.
According to ZipRealty’s data, the rate of home selling below asking has positively plummeted from 55 percent in May of 2011 to just 34 percent in May of 2012. This was the largest decline for the metros where we have full data!
Now you might be saying to yourself, But San Francisco is a desirable market, known for its competitiveness and high prices. You’re right, of course. But the recent change has been quite remarkable.
The sell/ask ratio works like this. If a home is listed (asking price) for $650,000 and sold for that much, the ratio is 100%; if under that, then homes are being sold for less than the list price, and if over, then homes are being sold for above the list price. You can see that even in a pretty steady real estate market, San Francisco’s sell/ask ratio has shot up in just the last few months!
So what’s happening? Is it the severe inventory shortage? Are sellers under-listing their homes? Are home values increasing?
I asked ZipRealty agent, Scott Yeh, for his perspective on the San Francisco real estate market, and here’s what he had to say: “Well, you can’t ever pin it on just one factor. Inventory, prices, seasonality are always going to affect the market. But I will say that I’ve written about 35-40 offers this year alone.”
“I’ve never seen so many all-cash buyers in the market,” Scott continued, “and if you have an accurately priced home in a desirable neighborhood, you might have something like 15 offers. There’s only one winner per house, so you’re likely going to have 14 qualified buyers heading back into the market again.”
Scott confirms the intense competition that we’ve been writing so much about over the last month, which could account, in part, for the skyrocketing sell/ask ratio. Of course, just like any trend, there are still pockets of San Francisco where homes are selling for below asking at a fairly high rate just as there are neighborhoods that are on fire with competitive, qualified buyers.
Here are the top six hottest neighborhoods for the first quarter of this year, ordered by the neighborhood with the fewest homes selling below asking (or: the most homes at or above asking!):
San Francisco is en fuego!
- With Fewer Homes Selling for Below Asking, the Pacific Northwest Market is Heating Up
- Competition on Homes for Sale Heating Up: Are You Ready?
- As inventory remains low, San Francisco homes sell ever faster!
Sarah Louise Green lives in the San Francisco Bay Area and writes about national real estate trends, home financing, advice for buyers, and DIY projects for the home and garden. Follow Sarah on Twitter:@slouisegreen