A sign of recovery? Condo closings tick up in last leg of 2020
February 1, 2021
By Laura Waxmann – Staff Reporter, San Francisco Business TimesJan 29, 2021 Updated Jan 29, 2021, 4:05pm PST
While San Francisco condo prices continue to fall — a trend that’s been steady through the pandemic — the number of sales increased in the fourth quarter in much of the eastern half of the city, which saw a total of 502 deals, according to a report from Compass Development.
The fourth quarter closings represent an 8.7% increase year-over-year. That resurgence does not apply to valuations, which continued to decline in the quarter. The average price per square foot fell 10.4% year-over-year during the quarter, down to $1,056 — the lowest recorded in the last five years, per Compass’ data.
Still, is the uptick of activity a sign for the market’s gradual revival? Sandra Eaton, western regional head of Compass Development Marketing Group, thinks so.
“We are seeing it continue into January. In fact, one of our projects is the fastest-selling project right now and we have 13 contracts that have gone out in the last month,” said Eaton, referring to 555 Fulton St., a 139-mixed use development in Hayes Valley.
She said historically low interest rates and availability is driving the market.
“At the very beginning of Covid, the market was very reactive. People didn’t know what to do and those who could were just jumping out of personal and professional situations that were making them uncomfortable,” Eaton told me. “They were looking to control that part of their lives. I think that became a very important part of decision-making. Now we are starting to see people who are looking to balance that initial reaction. We are starting to see people come back to urban cores.”
Those touring condos right now are looking to upsize, as well as access to views and open space, she added.
Compass’ market report focuses on sales of new and existing condos in the districts 6 through 9, which includes SoMa, downtown, Mission, Potrero Hill, Hayes Valley, North Beach, Dogpatch, Mission Bay, Western Addition and Bernal Heights neighborhoods, among others.
Per the report, condos priced under $1 million saw the largest year-over-year increases in sales, increasing by 36% in those neighborhoods tracked in the report, with 203 closings reported in the fourth quarter.
The largest increase in the number of sales was in district 6, where 292 closings were recorded in 2020, a 23.2% increase from the previous year.
In district 9, the number of sales plummeted by 26%, with 735 closings reported in 2020.
Overall, those core districts combined in 2020 saw their lowest annual number of sales recorded in the past five years. Sales were down 17.7% year-over-year, decreasing to a total of 1,632 closings.
As I reported on Wednesday, Bay Area rents have also increased slightly for the first time since the start of the pandemic, with the average rent for a one-bedroom apartment in San Francisco increasing by 0.8% heading into February. In Oakland and San Jose, median one-bedroom rents ticked up by 2.56% and 1.9%, respectively.Back to Top