Virtually across the Bay Area, Q3 median sales prices retreated dramatically from their spring peaks, and SF was hit harder than most area markets. Part of this was due to seasonal trends – median sales prices often peak for the calendar year in Q2, then drop in summer – but part of the decline was clearly due to changing market conditions prompted by shifts in interest rates, inflation, stock markets, and consumer confidence. In this report, home prices will be reviewed from a variety of angles to provide greater context. On the supply and demand side, it appears that after the big drop in demand in early-mid summer, conditions have mostly stabilized: Generally speaking, sales numbers are no longer appreciably dropping, though overbidding statistics continue to decline and days on market to climb.

When looking at recent market changes, it is important to remember how overheated the market was in 2021 and early 2022 – many quarter-to-quarter, and year-over-year comparisons are distorted by the unusual (sometimes frenzied) conditions that prevailed then. It is also wise not to jump to definitive conclusions based upon a single quarter’s data: The economy and real estate market are still in a period of adjustment.

Comparisons with the crash of 2008 continue to be made, but the precipitating factor in the 2008 crash – tens of millions of households talked into home loans they could never afford, forcing a tsunami of frantic sales during the great recession – simply does not apply today. Mortgage payments as a percentage of income, and loan delinquency rates are both close to all-time lows; most homeowners’ mortgages are held at historically low rates. There has been no surge of desperate sellers: New listing numbers are actually down from last year. Stock market declines, though substantial, cannot compare with those seen in 2008-2009, and employment remains very strong. This is not to minimize the correction the market is going through: There are certainly major economic and demographic challenges at play right now, but a market correction is not a crash, being more like a slow leak in an over-pressurized tire than a blowout on the highway at high speed.

The relatively short autumn selling season began after Labor Day and runs through mid-November. The mid-winter holiday slowdown then runs through mid-January. Though sales continues in every month of the year, listing and sale activity drops dramatically as we near Thanksgiving. Slower markets can offer opportunities to buyers, but the selection of homes for sale usually tumbles.

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.

Delinquency Rate on U.S. Single Family Mortgages

Percentage by Quarter, 1991 – Q2 2022

There were 2 huge interrelated factors in the 2008 home-price crash: an enormous flood of foreclosure and short sales during a period of economic recession as caused by the subprime lending fiasco, and the 50%+ crash in financial markets which hammered household wealth and consumer confidence. Employment also plunged.

Soaring mortgage delinquency rates, as seen in 2008-2012, are a leading indicator of crisis in both the housing market and economy. The current rate remains close to an all-time low. Recent stock market declines, though substantial, do not compare with 2008-2009. The unemployment rate is still close to all-time lows. In other words, 2022 is NOT like 2008.

San Francisco House Price Trends

Median House Sales Prices, 2012 – Present, by Quarter

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.

Seasonal fluctuations are common, and it’s not unusual for median sales prices to peak for the year in spring (Q2). Longer-term trends are more meaningful than short-term changes.

San Francisco: Year-over-Year House Appreciation Rates since 2020

Y-o-Y Percentage Change in Quarterly Median HOUSE Sales Price*

Comparing the quarterly median house sales price with the same quarter of the previous year to calculate the percentage change. There are a number of factors which can affect year-over-year median sales prices changes.

San Francisco Condo Price Appreciation

Median Condo Sales Prices, 2012 – Present, by Quarter

San Francisco: Year-over-Year Condo Appreciation Rates since 2020

Y-o-Y Percentage Change in Quarterly Median CONDO Sales Price*

San Francisco Home Price Trends – Selected District Markets

Median House Sales Prices, by Quarter, Q1 2020 – Q3 2022

Beginning with Q1 2020 and ending with Q3 2022, this chart illustrates quarterly median house sales prices.

These Realtor districts include a variety of other nearby neighborhoods to those listed.

San Francisco House Price Trends – by Bedroom Count

Median House Sales Prices, by Quarter, Q1 2018 – Q3 2022

San Francisco Condo Price Trends – by Bedroom Count

Median Condo Sales Prices, by Quarter, Q1 2018 – Q3 2022

Median sales price is that price at which half the sales occurred for more and half for less, and it typically disguises a huge variety of prices in the individual underlying sales. It is a very general statistic often affected by factors other than changes in fair market value. Quarterly and seasonal fluctuations are common. Does not include new-project condo sales unreported to MLS.

New Listings Coming on Market

San Francisco Market Dynamics: Year-over-Year Comparison

September typically sees a large spike up in new listings from the summer months. New listing activity continues to run somewhat below levels seen in 2021.

San Francisco Homes Market

Active & Coming-Soon Listings on 1st of Month*

The # of active listings on a given day is affected by 1) the # of new listings coming on market, 2) how quickly buyers put them into contract, 3) the sustained heat of the market over time, and 4) sellers pulling their homes off the market without selling.

As of 10/1/22, 69% of these listings were condos, co-ops, townhouses and TICs, and 31% were houses.

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.

Listings Accepting Offers (Going into Contract)

San Francisco Market Dynamics: Year-over-Year Comparison

Year over year, the number of listings going into contract was down about 27% in September 2022.

San Francisco Home Sales by Quarter

San Francisco Market Dynamics & Seasonality

Q3 2022 sales volume declined by approximately 29% from Q3 2021, but is similar to sales volumes in Q3 2018 and 2019.

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.

Spring 2021 saw the highest sales volume in over 16 years.

Sales of Priced Reduced Listings

As Percentage of Total Sales: San Francisco Market Dynamics

Measuring the number of home sales that occurred after price reductions, as a percentage of total monthly sales volume.

The condo, co-op & TIC market has been hit harder by price reductions than the house market.

Price Reductions on Active Listings

San Francisco Market Dynamics & Seasonality

The number of price reductions typically ebbs and flows by season, but can also be affected by specific events in the economy and the market. Price reductions usually peak in October before the mid-winter slowdown begins in November.

San Francisco Higher-Price Home Sales since 2018

Houses - $3 Million+, Condos - $2 Million+, by Quarter

Q3 2021 to Q3 2022, sales volume of these higher-priced homes declined by approximately 41%. Sales typically peak in Q2 (spring).

San Francisco Luxury House Market

House Sales of $4,000,000+, by District, 12 Months Sales*

The highest priced house sale reported during the period was in Cow Hollow at $32,000,000.

As of 9/20/22, there were 64 houses listed as active and coming-soon priced at $5 million+, and 24 priced at$10 million+.

Other districts had fewer sales in these price segments.

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

Sales Prices of $2.5 Million+, by District, 12 Months Sales*

The highest sale reported during the 12-month period was of 2 penthouse condo units in Russian Hill for $29,000,000.

242 of these sales were condos, 28 co-ops, 7 TICs, and 3 were townhouses.

There were 7 sales reported at $10 million & above.

Some new-project luxury condo sales are not reported to MLS. These projects are mostly concentrated in the greater South Beach/Yerba Buena/SoMa area.

Percentage of Listings Accepting Offers (Absorption Rate)

San Francisco Market Dynamics & Seasonality, by Quarter

Absorption Rate: The higher the percentage of listings accepting offers (going into contract), the stronger the buyer demand compared to the supply of listings for sale. Declining absorption rate indicates declining buyer demand.

Percentage of Sales Selling Over List Price

San Francisco Market Dynamics since 2018, by Quarter

Avg. Sales Price to Original List Price Percentage (SP/LP %)

San Francisco Market Dynamics since 2018, by Quarter

100% signifies an average sales price at original list price. Reduced overbidding is another indicator of reduced buyer demand. Overbidding percentages plunged in Q3 2022, though houses out-performed condos.

Average Days on Market by Quarter

San Francisco Market Dynamics since 2019

Generally speaking, the lower the average days on market, the stronger the buyer demand. House listings in SF sold in half the time of condos, co-ops and TICs, but days on market climbed across the board in Q3 2022.

More notable reports:

• Select Macroeconomic Trends

• Bay Area Real Estate Survey

• Bay Area Home Appreciation Prices Since 1990

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.