San Francisco Housing Market 2022: Prices, Trends & Forecast
The San Francisco housing market has made headlines for more than a decade. Those headlines are well-deserved, but they’ve gotten a bit repetitive. The San Francisco housing market made a booming recovery in 2012 and has continued to outpace other housing markets in terms of prices. Houses have been consistently in high demand in this desirable area, the supply has remained low, and price increases have broken one record after another.
However, what goes up must come down, which might be the case for the San Francisco housing market. Prices are continuing to climb, and homes are appreciating year over year. However, sales are down, which could signal that this overheated market is finally cooling off.
San Francisco Housing Market Price
So far, in 2022, the median home value for homes in the San Francisco area is slightly above $1.5 million. That’s a decrease of around 3% year over year.
Single family homes saw a decrease in price of 10%, but they are still the highest priced houses on the San Francisco market. The median price of single-family homes is $1.6 million.
The price for townhouses in the San Francisco area has surged year over year. The median price of a townhouse is almost $1.4 million, which is almost a 50% increase in price year over year.
Condos and co-ops are currently the cheapest housing types on the market at a median price of $1.2 million. That’s a year over year decrease in the price of 0.33%.
The market is still somewhat competitive. Approximately 57% of the homes in the San Francisco area are selling for above the list price. However, the number of homes with a price drop has also increased. About 23% of homes on the market have been sold with a price drop.
Sales in eight of the nine counties in the San Francisco area fell by 30%. For those homeowners that need to sell their home quickly in San Francisco, they may consider selling directly to an investor to save time and possibly on fees.
San Francisco Housing Market Trends
The housing supply has remained low. There is an approximate supply of 1.2 months worth of housing available. Year over year, this is a decrease of almost 6%.
New listings have seen a decrease of almost 28% year over year. There were an estimated 295 new listings so far this year.
Active listings were at approximately 2,200. While that might sound like a lot, it was almost a 41% decrease year over year.
Fewer homes were sold year over year. According to Redfin, approximately 437 homes were sold, a decrease of about 13.1% year over year.
Most homes are spending an average of 30 days on the market. That’s twelve more days than they spent on the market last year.
Single-family homes saw the most significant decrease in demand year over year. Only 181 homes sold were single-family homes, for a decrease of approximately 23%. These homes spend a median time of 17 days on the market, which is up 5 days from last year.
Although the price of townhouses has surged, few of them are sold. Only 2 houses sold this year were townhouses. They spend a median time of 36 days on the market, which is 29 more days than they spent on the market last year.
The number of condos and co-ops sold year over year has also decreased. Only 220 of the homes sold this year fall into that category. That’s almost a 35% decrease year over year. They spend approximately 42 days on the market, up 13 days compared to last year.
San Francisco Housing Market Forecast
The housing market will continue to be hot for the following year. San Francisco is a desirable place to live, and many people are simply choosing to rent instead of buy.
This is because of the continued increase in mortgage rates, inflation, and people not making enough money. The average salary for the area is approximately $112,000.
However, prices will drop slowly as the next twelve months unfold. Zillow has predicted a decrease in price by 1.8% by July 2023.
The lack of people buying homes in the area will help the supply of homes increase. Previously, real estate agents were barely able to keep up. Now, things will start to slow down to a manageable pace.
An inventory of six months is necessary for the housing market to be considered a healthy market. This gives buyers ample housing options to consider and allows them more say at the negotiating table. As the inventory continues to climb, buyers will slowly discover that they can negotiate lower prices.
Houses will spend more time on the market. Buyers will see more houses with price drops and will find that they can afford houses again in the long run. We buy San Francisco homes for cash, so it’s all the more important that we purchase at the right price.
It will take years for the market to balance out, but we are starting to see the beginning of that.
According to Bloomberg, this is due to a lack of demand in the housing market. For years, tech workers flocked to the area and the desirable work-from-home positions. It left few houses on the market for everyone else. Mortgage rates have combined with the low supply to make most homeowners cautious about entering the market.
However, that cautious approach will help them land better prices in the long run.
The San Francisco housing market trends have surprised everyone for years. Prices continued to climb for a decade. Appreciation rates soared to record-breaking levels throughout the bay area. This led to people buying houses before prices increased further. Investors swiped up houses to make money.
However, most buyers have felt defeated in the overheated market and resorted to things like renting. Now, the housing supply is increasing, and prices will start slowly falling again. Remember that this doesn’t mean the housing market will suddenly crash. The bay area will continue to be popular.
It’s time for investors to start looking into ways to sell a house without a realtor to ensure they can pocket more of the money when they sell. Buyers can start preparing to buy a house now for the price decline that is on its way. Building a house is always a great idea too!