Bye Bye Bunny, Hello Dragon! San Francisco Real Estate Market Report for 2023 and Forecast for 2024
San Francisco is NOT California When it Comes to Housing
Forget the cable car, buckle up for the San Francisco real estate market in 2024 because 2023 was a year that defied gravity, flipped the script, and left even the savviest agents scratching their heads. Buckle up, because we're diving deep into this tale of two cities, price paradoxes, and a potential comeback that might just spark bidding wars hotter than a cioppino in North Beach!
Despite modest appreciation averaging 2.2% the last four years, San Francisco home prices saw a dramatic plunge of 8.6% – a drop nearly six times steeper than the state's average. However, 2023 ended with the median price for single-family houses up $25,000 in price from 2018!
Hold Your Horses, Sellers: The Bidding War Dragon Might Be Stirring
Remember those "Sold!" signs disappearing faster than fog on Twin Peaks? Bidding wars might be snoozing, but don't count them out just yet. Here's why:
- Interest Rate Rollercoaster: If rates dip, brace for a buyer stampede. Pent-up demand could erupt, turning those "For Sale" signs into dust faster than a Dungeness crab molts its shell.
- San Francisco Siren Song: Our City's magic hasn't faded. Tech titans, cultural gems, and that undeniable charm are still drawing people in. This influx could fuel competition, reviving the bidding war frenzy. (San Francisco saw a net increase of nearly 5000 people between July 2022 and July 2023!)
- Whispers of the (Wood) Dragon: Reports of multiple offers are already surfacing in certain neighborhoods. These whispers could be the dragon waking, so stay alert, sellers! This is the year of the dragon after all.
The Tale of Two Cities: Houses Hold, Condos Tumble
San Francisco's a chameleon, and its housing market is no different. While single-family homes clung to their recent (pre-Covid) prices of 2018-2019 like fog to the Golden Gate Bridge, condos took an 8% nosedive. This hints at shifting buyer preferences and potential opportunities for condo hunters.
A Silver Lining for Buyers in the Golden Fog?
Prices remained close to 2018 levels, but activity plummeted. Listings, sales, and even pending sales dropped significantly. This supply-demand dance kept prices afloat, but created a competitive environment for buyers.
While inventory may be tight, overall prices are down from their 2022 peak of combined median prices. (Though prices separately for houses and condos were at their highest in 2021 at $1.8 and $1.21 million respectively.) This could be your chance! But be prepared for competition – multiple offers are making a comeback.. Add in the possibility of lower interest rates in 2024 (election year!), and hesitant buyers might just be tempted back into the market. (And no longer be scared rabbits. )
The median house price dropped a mere $3,000, while condos saw a steeper 8% dip. This hints at a shifting preference for houses, as we build no more and Covid created a frenzy of house buyers who wanted more space both indoors and out.
Listings decreased by 12.6%, but don't be misled. This doesn't necessarily signal a lack of interest. Many sellers are simply waiting for the right moment.
History Whispers: A Glimmer of Hope on the Horizon?
Remember 2008? San Francisco was the last Bay Area city to feel the price drop, and the fastest to recover. With pent-up demand and whispers of multiple offers, could 2024 see a similar resurgence?
Remember: San Francisco's allure remains strong, with a growing population and the American dream of homeownership alive and well. So, whether you're a buyer navigating the fog or a seller preparing for the potential storm, stay informed, stay flexible, and who knows, you might just catch the wave (or avoid getting swept away) when the San Francisco real estate market takes its next wild turn.
P.S. This is just a glimpse into the wild ride that was 2023. Stay tuned for further dives into specific neighborhoods and market trends!