Bidding Wars Continue To Drive Home Prices Higher in San Francisco
Posted by Cathy Harrington — July 19, 2013
SAN FRANCISCO, CA – Homebuyers willing to offer as much as 30-40 percent more than the listing price contributed to a dramatic increase in the median price of an existing, single-family detached home sold in the City of San Francisco during the second quarter of 2013, according to an analysis of MLS data by the research division of Better Homes and Gardens Mason-McDuffie Real Estate.
Rising prices failed to dissuade determined homebuyers, who grew in numbers as the spring home market began to bloom. Citywide, 716 existing, single-family detached homes changed hands in the second quarter, up 47 percent from 486 in the first quarter of 2012 and on par with last year’s second-quarter total of 726 homes sold.
For the third consecutive quarter, the median price of a home sold in The City surpassed the $1 million mark, rising 14 percent from $1,052,626 in the first quarter of this year to $1,201,920 in the second quarter – 21 percent higher than the $991,387 median sales price recorded in the comparable quarter a year ago.
Inventory – or, rather, the lack of it – continued to play a role in both the number of homes sold and the prices paid for those homes. Only 293 existing detached homes were listed for sale in San Francisco on the final day of the second quarter, down 21 percent from 372 homes listed on the final day of last year’s second quarter but an improvement over the 219 homes available for purchase on the final day of this year’s first quarter.
With lines of competitors for most listings, homebuyers came prepared for multiple-offer scenarios and transactions moved quickly. The average San Francisco home was on the market only 31 days before receiving a final offer to purchase, down from 43 days in both the prior and year-ago quarters.
Neighborhoods where the median sales price of a home was more than $1 million accounted for well over half of homes sold in the second quarter. District 7 (Marina/Pacific Heights/Cow Hollow) reported the highest median sales price – $3,100,000 – with 46 homes sold, followed by District 8 (Nob Hill/Russian Hill/Telegraph Hill) at $2,475,000 with seven homes sold, and District 6 (Hayes Valley/Western Addition) at $2,250,000 based on 11 homes sold. Among neighborhoods with median home sales prices in the $1 million to $1.6 million range, District 5 (Glen Park/Haight Ashbury/Noe Valley) recorded 112 completed home sales, followed by District 4 (Diamond Heights/Mt. Davidson/West Portal) with 88 homes sold and District 9 (Inner Mission/Potrero Hill/South of Market) with 83 homes sold during the second quarter.
There was plenty of activity and competition where home prices were below $1 million, In District 10 (Bayview/Excelsior/Visitacion Valley), 133 homes changed hands, followed by District 2 (Richmond) with 120 homes sold, and District 3 (Stonestown/Ingleside/Oceanview) with 49 homes sold.
Looking ahead, rising prices and tight inventory will continue to require homebuyers to be tenacious and patient – particularly if mortgage interest rates edge higher in the coming months. Buyers in today’s market require an iron constitution and an experienced REALTOR® to help them navigate and negotiate the competitive San Francisco real estate market.
While rising prices also may bring some additional sellers into the market, their numbers are not expected to be significant enough to relieve the inventory shortage. That could change should home prices continue to spike and elevate homeowners to “above-water” status. According to Jim Caldwell, Manager of San Francisco office on Union Street, “Homeowners who have been awaiting an opportunity to downsize for retirement or to right-size their real estate portfolio for tax or estate planning purposes may find a window of opportunity to sell in the coming quarters if the economic and real estate market stars align.”
San Francisco District Guide:
District 1 - Central Richmond, Inner Richmond, Jordan Park/Laurel Heights, Lake, Outer Richmond, Sea Cliff, Lone Mountain.
District 2 - Golden Gate Heights, Outer Parkside, Outer Sunset, Parkside, Central Sunset, Inner Sunset, Inner Parkside.
District 3 - Lake Shore, Merced Heights, Pine Lake Park, Stonestown, Lakeside, Merced Manor, Ingleside Heights, Ingleside, Oceanview.
District 4 - Balboa Terrace, Diamond Heights, Forest Hill, Forest Knolls, Ingleside Terrace, Midtown Terrace, St. Francis Wood, Miraloma Park, Forest Hill Extension, Sherwood Forest, Monterey Heights, Mount
Davidson Manor, Westwood Highlands, Westwood Park, Sunnyside, West Portal.
District 5 - Glen Park, Haight Ashbury, Noe Valley, Twin Peaks, Parnassus/Ashbury Heights, Buena Vista Park, Corona Heights, Clarendon Heights, Duboce Triangle, Eureka Valley/Dolores Heights, Mission Dolores.
District 6 - Anza Vista, Hayes Valley, Lower Pacific Heights, Western Addition, Alamo Square, North Panhandle.
District 7 - Marina, Pacific Heights, Presidio Heights, Cow Hollow.
District 8 - Downtown, Financial District, Nob Hill, North Beach, Russian Hill, Van Ness/Civic Center, Telegraph Hill, North Waterfront, Tenderloin.
District 9 - Bernal Heights, Inner Mission, Mission Bay, Potrero Hill, South of Market, South Beach, Central Waterfront.
District 10 - Bayview, Crocker Amazon, Excelsior, Outer Mission, Visitacion Valley, Portola, Silver Terrace, Mission Terrace, Hunters Point, Bayview Heights.
* Days on market is the number of days a property was listed on the market until it went under contract at its final listing price. This may not reflect previous listings.
**The median home price for the entire county is the mean of median home prices of districts within San Francisco County.
Data are sourced from multiple listing services and are deemed reliable but not guaranteed. All percentages rounded to nearest whole number.
Produced by the Research Division at Better Homes and Gardens Mason-McDuffie Real Estate.
About Better Homes and Gardens Mason-McDuffie Real Estate
Our heritage began with the founding of Mason-McDuffie Real Estate in 1887. In 2010, the company was named the 26th largest real estate services firm in the nation (REALTrends 500), and Number One in the San Francisco East Bay (SF Business Times). The company provides comprehensive solutions to home buyers and sellers, and handled 6,500 transactions in 2012, generating $2.8 billion in sales volume. Better Homes and Gardens Mason-McDuffie Real Estate includes joint ventures with partners Highland Partners in Piedmont and Montclair, Wine Country Group Realtors in the North Bay, and Tri-Valley Realty in Pleasanton-Hopyard and Ruby Hill, and Bahay Co. in Concord. Better Homes and Gardens Mason-McDuffie Real Estate is locally owned and has more than 1,100 real estate professionals with 30 offices in eight counties in the Bay Area and the Tahoe/Truckee region. For more information, go to www.bhghome.com.