Pacific Union Market Analysis Informs Marina Times Readers
July 31, 2016
Supply and demand still has the final say, even in San Francisco’s wild real estate market.
Early this month, developer Trumark Urban is expected to begin selling a batch of units in its $200 million luxury condominium project, The Pacific, located at 2121 Webster Street in Pacific Heights. A walk or drive along Market Street in the Castro shows many new and under-construction condo projects lining the street. SoMa has been home to numerous tall cranes building even more housing units in recent years…
People who have wondered when all of the new construction would begin to reduce housing prices are finally getting an answer: Now….
This past May, home prices in San Francisco were basically unchanged from the previous May, according to online real estate service Redfin. Sales volume dropped almost 9 percent, falling for the fifth month in a row. Redfin also reported that the supply of homes — the inventory of available properties for sale — increased by 50 percent, “reaching its highest level in more than three years, as more homeowners put properties [up for sale] in an effort to catch prices at a peak…”
That’s a big switch from the go-go days of recent years past, when it was not unheard of (actually, it was heard quite often) that a home would sell within hours or days of being put on the market, and sometimes it would even be snatched up before being made publicly for sale. What we’ve seen so far this year is a move “toward market normalization,” notes real estate firm Pacific Union. It said that sales continued to be strong, albeit with longer on-sale times “especially in the city’s northern neighborhoods and popular Noe Valley. One main reason for this is that many sellers entertained unrealistic expectations and, accordingly, overpriced their homes. Consequently, bidding wars occurred less frequently than in the second quarter of last year, and price reductions became more commonplace.”
Pacific Union’s market update reported a slower pace of sales in 2016’s second quarter than a year earlier, though not significantly: “At the high end of the market, many move-up buyers stayed put, uncertain if their existing home would command enough to allow them to afford their target home. All in all, while the San Francisco market remains tilted in favor of sellers, it is slowly moving toward a more balanced state.”
Read the article at MarinaTimes.com