Across the Bay Area, markets have continued to slow and cool. As illustrated in this report, dramatic changes in demand, inventory, overbidding, price reductions, and year-over-year appreciation rates have usually occurred. Buying and selling continues: Over 5200 home sales were reported to MLS from Napa County to Monterey in July 2022 – many of them selling quickly for over asking price – but that number is down 38% from last year. Median home price appreciation rates in the Bay Area have seen steep declines from those in 2021/early 2022 – and in June/July, SF median house prices were down year over year. Changes vary in degree by location and market segment, but the direction of the shifts is near universal.

This report will review year-over-year changes in prices, and in supply and demand, reflecting the significant adjustments from the heated (often overheated) conditions recently the norm, but also look at longer-term trends to provide greater historical context. There is also a comparison of home prices within the local market, as well as across the Bay Area.

As of early August, the average, weekly mortgage rate for a 30-year fixed rate loan fell below 5% for the first time since April, and stock markets have seen large rebounds since early July – but these and other indicators have been subject to sudden and often dramatic volatility, and their future directions can’t be taken for granted. Within this report is a link to a review of many of the macroeconomic factors at play.

According to some agents, buyer interest has begun to rekindle with the decline in competition, increase in inventory, and economic changes mentioned above, but if this is part of a broader recovery in demand, it has not yet shown up in the statistics – which are lagging indicators of what’s occurring on the ground right now. Monthly data can be volatile, fluctuating according to a wide variety of factors, including market seasonality. Longer-term trends are more meaningful than short-term fluctuations.

Mid-late summer is usually a much slower period compared to the spring selling season. Autumn typically sees a very substantial spike in new listings and sales prior to the big mid-winter slowdown.

Our reports are not intended to convince you regarding a course of action or to predict the future, but to provide, to the best of our ability, straightforward information and good-faith analysis to assist you in making your own informed decisions. Statistics should be considered very general indicators, and all numbers should be considered approximate. How they apply to any particular property is unknown without a specific comparative market analysis.

San Francisco Median House Price Trends

Median House Sales Prices, 2018 – Present, by Month

Median sales price is that price where half the homes sold for more and half for less. It is a very general statistic that disguises a wide range of prices in the underlying sales, and can be affected by other factors besides changes in fair market value. Monthly and seasonal fluctuations are common, and it is not unusual for median sales prices to peak for the year in spring. Longer-term trends are more meaningful than short-term changes. Short-term, monthly changes should be considered preliminary until substantiated over the longer term.

San Francisco Year-over-Year Appreciation Rates since 2020

YOY Percentage Change in Monthly Median HOUSE Sales Price*

As common across Bay Area markets, the year-over-year appreciation rate plunged in recent months. Comparing the monthly median house sales price with the same month of the previous year to calculate the percentage change.

IMPORTANT: Single-month median house sales prices (and y-o-y appreciation rates) can be volatile and prone to anomalous fluctuation, especially in SF, which often sees relatively low monthly sales volumes. The y-o-y %change in any 1 or 2 months should be considered preliminary until substantiated over the longer term.

San Francisco Year-over-Year Appreciation Rates since 1990

YOY Percentage Change in Annual Median HOUSE Sales Price*

Annual appreciation rates often varied widely between submarkets within the county. How this chart applies to any particular property is unknown without a specific comparative market analysis.

1990 to 2021, the average annual inflation rate was approximately 2.5% (per WorldData.info).

San Francisco House Market

May – July 2022 House Sales by Price Segment*

Sales by Bedroom Count

• 2 BR: 154

• 3 BR: 265

• 4 BR: 161

• 5 BR: 57

• 6+ BR: 15

San Francisco Median Condo Price Trends

Median Condo Sales Prices, 2018 – Present, by Month

Median sales price is that price where half the homes sold for more and half for less. It can be affected by other factors besides changes in fair market value. Monthly fluctuations are common: Longer-term trends are more meaningful than short-term changes. Short-term, monthly changes should be considered preliminary until substantiated over the longer term.

San Francisco Year-over-Year Appreciation Rates since 1990

YOY Percentage Change in Annual Median CONDO Sales Price*

New condos have been built in the tens of thousands over the period illustrated, constantly changing the mix of units sold, so year-over-year comparisons are not necessarily apples to apples. San Francisco is the only Bay Area County in which condo sales outnumber house sales.

San Francisco Condo, Co-op, Townhouse & TIC Market

May – July 2022 Sales by Price Segment*

Approximately 88% of these sales were condos, 9% TICs, 2% co-ops, and 1% townhouses. Many factors affect values, but particularly in larger projects, the floor a unit is on – and the views it offers – is a major one.

Sales by Unit Size

• Studio 33

• 1 BR 222

• 2 BR 368

• 3 BR 189

• 4+ BR 30

Bay Area Median Home Values

May - July 2022 Sales, by Property Type & Bedroom/Bath Count*

*Sales reported to NorCal MLS Alliance by 7/25/22. Counties contain submarkets of widely varying values. Median values can fluctuate for other reasons besides changes in fair market value. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers are approximate, and may change with late reported sales.

New Listings Coming on Market

San Francisco Market Seasonality

The number of new listings typically climbs rapidly through spring, drops in summer, spikes up dramatically in early fall, and plunges in mid-winter.

Active Listings

San Francisco Market: Year-over-Year Comparison

This is a snapshot measure of how many active listings can be expected on any given day of the specified month. As of August 1, 2022, there were 1310 active and coming soon listings posted to MLS: 76% of these listings were condos, co-ops and TICs, and 24% were houses. Comparing July 2022 with July 2021, the number of active listings on a given day of the month was up about 29%.

Active Listings on Market – Longer-Term Trends

San Francisco Real Estate Market Dynamics & Seasonality

This is a snapshot measure of how many active listings can be expected on any given day of the specified month. The number of active listings on a given day is affected by 1) how many new listings come on market, 2) how quickly buyers snap them up, 3) the sustained heat of the market over time, and 4) how many sellers pull their homes off the market without selling. The number typically ebbs and flows by season.

Price Reductions on Active Listings

San Francisco Market Dynamics: Year-over-Year Comparison

Increasing price reductions is a clear indicator of market cooling, though they also typically ebb and flow according to seasonal trends.

Monthly Sales Volume*

San Francisco Market Dynamics: Year-over-Year Comparison

Comparing July 2022 with July 2021, the number of home sales was down about 33%, with house sales down about 27%, and condo, co-op and TIC sales down about 36%.

Sales in one month mostly reflect accepted-offer activity in the previous month.

Monthly Sales Volume – Longer-Term Trends

San Francisco Market Dynamics & Seasonality

As illustrated, sales volume usually ebbs and flows by season: Up in spring, down in summer, back up in fall, and way down in mid-winter.

Listings Accepting Offers (Going into Contract)

San Francisco Market Dynamics: Year-over-Year Comparison

Comparing July 2022 with July 2021, the number of listings accepting offers was down about 36%.

Listings Accepting Offers- Longer-Term Trends

San Francisco Market Dynamics & Seasonality

The number of listings accepting offers is a leading indicator of sales volume in the following 3 to 6 weeks. It’s not unusual for market activity to slow down dramatically in mid-late summer, before rebounding during the autumn market (prior to the big mid-winter drop.)

Higher-Price Home Sales Volume

San Francisco Market Dynamics: Sales $3 Million+

Comparing July 2022 with July 2021, the number of homes selling for $3 million+ was down about 48%. Sales in one month mostly reflect accepted-offer activity in the previous month.

San Francisco Higher-Price Home Sales

Homes Selling for $3 Million+: Market Dynamics & Seasonality

The number of higher-price sales typically ebbs and flows dramatically by season. Sales usually follow the time of offers being accepted by 3 to 5 weeks.

Luxury Home Sales Volume

San Francisco Market Dynamics: Sales $5 Million+

Comparing July 2022 with July 2021, the number of reported home sales for $5 million+ was down 50%. Sales in one month mostly reflect accepted-offer activity in the previous month.

Overbidding List Prices in San Francisco

Percentage of Home Sales Closing over List Price, since 2018

In the latest month, 57% of sales closed over final list price, down from 73% in April.

Average Sales Price to Original List Price Percentage

San Francisco Overbidding: Market Dynamics & Seasonality

Houses have much higher average overbidding percentages than condos. Both have seen large declines since April 2022 – 13 points for houses, 7 points for condos. This statistic fluctuates by season, and is a lagging indicator of market activity 3-6 weeks earlier. This statistic is affected by both demand and by strategic underpricing.

Average Days on Market

San Francisco Market Dynamics & Seasonality

Houses have much lower average days-on-market readings than condos. Numbers have been climbing from April 2022. Chart illustrates 2-month-moving trend. This statistic ebbs and flows seasonally, and is a lagging indicator of market activity 3-6 weeks earlier.

Statistics are generalities, essentially summaries of widely disparate data generated by dozens, hundreds or thousands of unique, individual sales occurring within different time periods. They are best seen not as precise measurements, but as broad, comparative indicators, with reasonable margins of error. Anomalous fluctuations in statistics are not uncommon, especially in smaller, expensive market segments. Last period data should be considered estimates that may change with late-reported data. Different analytics programs sometimes define statistics – such as “active listings,” “days on market,” and “months supply of inventory” – differently: what is most meaningful are not specific calculations but the trends they illustrate. Most listing and sales data derives from the local or regional multi-listing service (MLS) of the area specified in the analysis, but not all listings or sales are reported to MLS and these won’t be reflected in the data. “Homes” signifies real-property, single-household housing units: houses, condos, co-ops, townhouses, duets and TICs (but not mobile homes), as applicable to each market. City/town names refer specifically to the named cities and towns, unless otherwise delineated. Multi-county metro areas will be specified as such. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers to be considered approximate.

Many aspects of value cannot be adequately reflected in median and average statistics: curb appeal, age, condition, amenities, views, lot size, quality of outdoor space, “bonus” rooms, additional parking, quality of location within the neighborhood, and so on. How any of these statistics apply to any particular home is unknown without a specific comparative market analysis.

Median Sales Price is that price at which half the properties sold for more and half for less. It may be affected by seasonality, “unusual” events, or changes in inventory and buying trends, as well as by changes in fair market value. The median sales price for an area will often conceal an enormous variety of sales prices in the underlying individual sales.

Dollar per Square Foot is based upon the home’s interior living space and does not include garages, unfinished attics and basements, rooms built without permit, patios, decks or yards (though all those can add value to a home). These figures are usually derived from appraisals or tax records, but are sometimes unreliable (especially for older homes) or unreported altogether. The calculation can only be made on those home sales that reported square footage.

Compass is a real estate broker licensed by the State of California, DRE 01527235. Equal Housing Opportunity. This report has been prepared solely for information purposes. The information herein is based on or derived from information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy or completeness of the information. Compass disclaims any and all liability relating to this report, including without limitation any express or implied representations or warranties for statements contained in, and omissions from, the report. Nothing contained herein is intended to be or should be read as any regulatory, legal, tax, accounting or other advice and Compass does not provide such advice. All opinions are subject to change without notice. Compass makes no representation regarding the accuracy of any statements regarding any references to the laws, statutes or regulations of any state are those of the author(s). Past performance is no guarantee of future results.