Maggie’s Market Minute: Buyers Are Ready, So Where Are the Sellers?
August’s San Francisco market tells a clear story: buyer demand remains strong, but finding the right home to buy is still the biggest challenge.
Across single-family homes, condos, and 2-4-unit properties, there were 466 sales in August. Homes moved quickly, with a typical market time of just 12 days. Buyers paid over asking in 85% of sales, and the median sale price reached 122% of list price. Cash buyers accounted for 33% of transactions.
Single-Family Homes: Limited Supply, Big Luxury Sale
Condos: More Transactions, Still Limited Inventory
THE INVENTORY CHALLENGE
The issue isn’t demand. It’s supply. Single-family home inventory was 58% below normal in August, while condo inventory was 48% below normal.
A major reason is the “golden handcuffs” effect. Many owners locked in historically low mortgage rates and are understandably reluctant to trade them for today’s rates, which are in the high-6% to low-7% range (NAR Chief Economist Lawrence Yun cautions that rates could remain elevated as inflation and other economic pressures persist. “Expect 7% as the new normal,” Yun says).
As a result, owners who might otherwise sell are staying put. Much of today’s new inventory is being driven by life events, most notably death, divorce, and other circumstances that make a sale necessary regardless of rates.
THE TAKEAWAY
Inventory remains unusually tight and competition for available homes remains strong.
The big questions heading into fall are: “How many homeowners are willing to let go of their golden handcuffs?” and "Will higher interest rates impact sales prices?"
Thinking about what your next move might be?
Let me know. I can help.
Cheers,
Maggie
Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 01527235, 01527365. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.
