Fog City Guide

 As a new decade starts the real estate market in San Francisco continues to show signs of strengthening. Open escrows are up 39% over January 1^st of last year. Sales in December were up 31% over December 2008 and the median price of single family homes and condos is up 7% from the median in December 2008.

That’s all good, right? But looking at the median price by district there is a steep decline in price. (Remember these are the Association of Realtors districts not the Supervisorial districts. To view click SF Realtor District Map). While many things affect pricing and watching median pricing only serves to show trends, District 5 including Noe Valley and Glen Park had been white hot. Now the number of remodeled homes that were speculative has decreased. Contractors are holding off because money isn’t available for construction loans.

The median price represents the dollar value that is in the middle of all the homes sold during a period. Looking back at the distribution of prices it’s clear that the more expensive homes sales are declining in sales while the quantity of lower price homes increases. In 2004 the sales volume peaked and in 2007 the median price peaked in the San Francisco market.  Is every property worth less now than it was or is the median skewed by the sale of more less expensive homes? I say it is not.

If you sell in this market you need to be prepared for this market. Making the property show well and positioning the price to be attractive are so important now, even more so than when every house would generate multiple offers. To get to the highest possible price the market will bear the seller needs to be strategic and the agent needs to be a very good negotiator.

So what was the median price and size in your neighborhood for December? The following chart shows the price, size and how long it took to sell the median home in your district. This was popular when I used it last month. I got comments from readers that it was handy to be able to compare your house with the one listed here as the median.

 If you are thinking about selling in the coming year all indicators say go ahead. There are buyers and the Federal tax credits are motivating people in greater and greater numbers. The activity is up as the open escrows show. In October and November there were over a thousand properties in escrow on the first day the month. That was in anticipation of the ending of the first-time buyer’s credit. Now that the credit has been extended and expanded San Francisco has over 300 more transactions in escrow this January 1^st compared to last year’s January number.

Prices are rising, inventory is tight and buyers are buying. It isn’t 2004 as far as the sales numbers go and since money is tighter it isn’t 2007 where higher end homes were sold but interest rates are really low and the market is very active.  

By the way there are some great deals outside the City too. I’ve helped clients get condos under $300,000, some under $200,000, great homes in nice established areas for fantastic prices all around the Bay Area. Second homes or investment properties a solid buys. With the additional tax credit, it might be time to move to the sunshine and transfer the tax basis from your long held City home.

This is where the median price for both single family homes and condos were every year of the past decade.