30+ Years of Housing Market Cycles in the San Francisco Bay Area

Below is a look at the past 30+ years of San Francisco Bay Area real estate boom and bust cycles. Financial-market cycles have been around for hundreds of years, from the Dutch tulip mania of the 1600’s through today’s speculative frenzy in digital-currencies. While future cycles will vary in their details, the causes, effects and trend lines are often quite similar. Looking at cycles gives us more context to how the market works over time and where it may be going — much more than dwelling in the immediacy of the present with excitable pronouncements of “The market’s crashing and won’t recover in our lifetimes!” or “The market’s crazy hot and the only place it can go is up!”

Note: Most of these charts generally apply to higher-priced Bay Area housing markets, such as those found in much of San Francisco, Marin, Central Contra Costa (Lamorinda & Diablo Valley) and San Mateo Counties. (Different market price segments had bubbles, crashes – or adjustments – and recoveries of differing magnitudes in the last cycle, which is addressed at the end of this report.)

Regardless of how recent cycles have played out, it is vital to understand how extremely difficult it is to predict when different parts of a cycle will begin or end. Case in point: In late 2015, when financial markets entered into a period of volatility, IPO activity stopped in its tracks, and high-tech hiring slowed, a well-respected Berkeley economist prophesied there would soon be “blood in the streets” of San Francisco: Median SF house prices have gone up over 20% since then. Boom times can go on much longer than expected, or get second winds. Even when the financial markets enter a period of “irrational exuberance,” that period can go on longer than seems possible, with huge jumps in home and/or stock values.

On the other hand, negative shocks can appear with startling suddenness, triggered by unexpected economic, political or even ecological events that hammer confidence. This leads to other market dominoes falling, the reversal of positive trends in growth, investment and employment, which then balloons into a period of decline, recession, stagnation. These negative adjustments can be of varying scale, in the nature of a crash or bubble popping, the slow deflation of an over-pumped football, or a combination of the two.

Going back thousands or even tens of thousands of years, human beings have tried to predict the future, and whether using priests, oracles, astrologers, pundits, economists, analysts or “experts” of every stripe – and currently having their “authoritative” forecasts headlined every day in the media – we show no aptitude as a species for having the ability to do so with any accuracy. We can’t even remember the mistakes of the recent past – which is one reason why we don’t seem to be able to escape cycles – much less foretell what’s going to happen tomorrow.

Confidence plays an enormous role in financial and real estate markets, and in every period of irrational exuberance, there are many who vociferously argue that the exuberance is NOT irrational. Unfortunately, it can be very challenging to determine the point at which rational confidence shifts into irrational exuberance, but when irrational exuberance abruptly shifts into fear, a stampede for the exits can follow – as an old English saying puts it: “They run all away, and cry, ‘the devil take the hindmost’.” In retrospect, the duration of periods of irrational exuberance, when market gains often accelerate into the stratosphere, seems utterly incomprehensible. Such are the pleasures of hindsight.

All the major recessions in the Bay Area in recent decades have been tied to national or international economic crises, which can take a wide variety of forms. Absent a natural disaster, it is unlikely that a sudden, major, negative, market adjustment (or “crash”) would occur due simply to local issues. However, local issues could certainly lead to less dramatic market adjustments, or exacerbate a downturn caused by a macro-economic event. The SF earthquake of 1989 intensified the national recession that began at that time; our greater exposure to dotcom start-ups did the same with the national dotcom-bubble/Nasdaq crash.

Market Cycles: Simplified Overviews
Up, Down, Flat, Up, Down, Flat…(Repeat)

The chart below graphs ups and downs by percentage changes in home prices at each turning point.

Smoothing out the bumps delivers the simplified overview above for the past 30 years.

Whatever the phase of the cycle, up or down, while it is going on people think it will last forever. Going up, “The world is different now, the rules have changed, and there’s no reason why the up-cycle can’t continue indefinitely.” And then when the market turns and goes down: “Homeownership has always been a terrible investment and the market probably won’t recover for decades” (or even “in our lifetimes” as one Nobel-Prize-winning economist said in 2012). But the economy mends, the population grows, people start families, inflation builds up over the years, and repressed demand of those who want to own their own homes builds up. In the early eighties, mid-nineties and in 2012, after about 4 years of a recessionary housing market, this repressed demand jumped back in (or “explodes” might be a good description) and prices started to rise again. (The dotcom bubble adjustment caused no lasting recession in home values.)

The nature of cycles is to keep turning.

All bubbles are ultimately based on irrational exuberance, runaway greed, criminal behavior or, not uncommonly, all three mashed together. Whether exemplified by junk bonds, stock market hysteria, gorging on untenable levels of debt, a corporate ponzi-scheme mentality, an abandonment of reasonable risk assessment, and/or incomprehensible or dishonest financial engineering, the bubble is relentlessly pumped bigger and tighter. And since human beings appear utterly unable or unwilling to learn the lessons of past cycles, it is kind of like the movie “Groundhog Day,” except that in the movie at least, Bill Murray actually grew wiser over time.

The 2008 crash was truly abnormal in its scale, and much greater than other downturns going back to the Great Depression. The 2005-2007 bubble was fueled by home buying and refinancing with unaffordable amounts of debt on a staggering level, promoted by predatory lending practices, promises of endless appreciation, and an abysmal decline in underwriting standards – and then eagerly facilitated by smug, rapacious, Wall Street flimflammery and self-abasing credit ratings agencies. Millions came to own homes they could never afford to pay for and the rot was distributed throughout the financial system. The market adjustments of the early 1990’s and early-2000’s saw declines in Bay Area home values in the range of 10% to 11%, which were bad enough, but nothing compared to the terrible 2008 – 2011 declines of 20% to 60%.

This is important context when contemplating the next adjustment: It doesn’t have to be a devastating crash. It can be more like some air being let out of an over-pressurized tire instead of a blowout on the highway at high speed. It depends on many different factors.

This Recovery vs. Previous Recoveries

The gold columns above chart the appreciation of past recoveries from the beginning of the recovery to peak value for each cycle (except for the latest cycle, for which the peak has not yet been defined), and the red bars delineate the percentage declines from those peaks, pursuant to the market adjustments that occurred. As always, note that market appreciation and depreciation rates can vary widely by county, community and neighborhood.

Over the past 30+ years, the period between a recovery beginning and a bubble popping (or a lesser adjustment occurring) has run 5 to 7 years. We are currently about 5 years into the current recovery, which started in early 2012 (in San Francisco; later in outlying Bay Area counties). Periods of market recession/doldrums following the popping of a bubble have typically lasted about 3-4 years. (The 2001 dotcom bubble/ 9-11 crisis drop being the exception.) Generally speaking, within about 2-3 years of a new recovery commencing, previous peak values (i.e. those at the height of the previous bubble) are re-attained — among other reasons, there is the recapture of inflation during the doldrums years. In this current recovery, those homes hit hardest by the subprime loan crisis — typically housing at the lowest end of the price scale in the less affluent neighborhoods, which experienced by far the biggest bubble and biggest crash — are appreciating quickly now, and just beginning to re-attain previous peak values. However, communities with higher priced homes — such as in San Francisco, Marin, San Mateo and Central Contra Costa Counties (Diablo Valley & Lamorinda) — have surged well past their previous peaks.

This does not mean that these recently recurring time periods necessarily reflect some natural law in housing market cycles, or that they can be relied upon to predict the future. Real estate markets can be affected by a bewildering number of local, national and international economic, political and even natural-event factors that are exceedingly difficult or even impossible to predict with any accuracy.

As long as one doesn’t have to sell during a down cycle, Bay Area homeownership has almost always been a good or even spectacular investment (though admittedly if one does have to sell at the bottom of the market, the results can be very painful). This is due to the ability to finance one’s purchase (and refinance when rates drop), tax benefits, the gradual pay-off of the mortgage (the “forced savings” effect), inflation and long-term appreciation trends. The best way to overcome cycles is to buy a home for the longer term, one whose monthly cost is readily affordable for you, ideally using a long-term, fixed-rate loan.

In the 2 charts below tracking the S&P Case-Shiller Home Price Index for the 5-County San Francisco Metro Area, the data points refer to home values as a percentage of those in January 2000. January 2000 equals 100 on the trend line: 66 means prices were 34% below those in January 2000; 250 signifies prices 150% higher.

1983 through 1995
(After Recession) Boom, Decline, Doldrums

In the above chart, the country is just coming out of the late seventies, early eighties recession featuring terrible inflation, stagnant economy (“stagflation”) and incredibly high interest rates (hitting 18%). As the economy recovered, the housing market started to appreciate and this surge in values began to accelerate deeper into the decade. Over 6 years, the market appreciated about 100%. Finally, the late eighties “Greed is good!” version of irrational exuberance — junk bonds, stock market swindles, the Savings & Loan implosion, as well as the late 1989 earthquake here in the Bay Area — ended the party.

Recession arrived, home prices sank about 11%, sales activity plunged and the market stayed basically flat for 4 to 5 years. Still, even after the decline, home values were 70% higher than when the boom began in 1984.

1996 to Present
(After Recession) Boom, Bubble, Crash, Doldrums, Recovery

This next cycle looks similar but elongated. In 1996, after years of recession, the market suddenly took off and continued to accelerate til 2001. The dotcom bubble pop and September 2001 attacks created a market hiccup (a short-term 10% decline, but only for high-price tier houses, and for condos), but then the subprime and refinance insanity, degraded loan underwriting standards, mortgage securitization, and claims that real estate values never decline, super-charged a housing bubble. Overall, from 1996 to 2006/2008, the market went through an astounding period of appreciation. (Different areas hit peak values at times from 2006 to early 2008.) The air started to go out of some markets in 2006-2007, and in September 2008 came the financial markets crash.

Across the country, home values typically fell 20% to 60%, peak to bottom, depending on the area and how badly it was affected by foreclosures — most of San Francisco, with relatively few foreclosures, got off comparatively lightly with declines in the 15% to 25% range. The least affluent areas got hammered hardest by distressed sales and price declines; the most affluent were usually least affected. Then the market stayed flat for about 4 years, albeit with a few short-term fluctuations. Tied to a rapidly recovering economy, supply and demand dynamics began to significantly change in San Francisco in mid-2011, leading to the market recovery of 2012.

The Recovery since 2012 (per Case-Shiller)

This chart above looks specifically at home price appreciation since 2012 when the current market recovery began. Generally speaking, the spring selling seasons have seen the most dramatic surges in appreciation. It’s not unusual for appreciation to slow or flatten in the second half of the year.

Short-Term Changes – last 13 to 14 months

Short-Term Trends by Price Segment (Tier)

In late 2015 and 2016, the greatest pressure of buyer demand started moving to more affordable home segments, as seen in this following chart. In summer 2018, trends started to change, trending down. Then in early 2019, they started to spike up again.

The Panorama: From the late 1980’s to Present
S&P Case-Shiller Index, 5-County SF Metro Area

In the chart below showing percentage year-over-year changes, each January percentage change mostly reflects the market in the previous year, i.e. the January 2002 percentage decline reflects the change in 2001 after the dotcom bubble popped.

Comparing San Francisco vs. United States
Home Price Appreciation Trends since 1987

Really quite similar except for the 1989 earthquake, the dotcom phenomenon, and the recent Bay Area high-tech boom. Of course, the huge difference is in the median house sales prices: The city’s is now over 5 times higher than the national median price.

San Francisco Median Sales Price Appreciation

The charts below look at median sales price movements in San Francisco County itself over the shorter and longer terms. These do not correlate exactly with Case-Shiller – firstly because C-S tracks a “metro area” of 5 Bay Area counties, and secondly, because C-S uses its own proprietary algorithm and not median sales prices. Median sales prices are often affected by other factors besides changes in fair market value (such as significant changes in the distressed, luxury and new-construction market segments; seasonality; buyer profile; and so on).

The Current Recovery: 2012 – Present

In 2011, San Francisco began to show signs of perking up. An improving economy, soaring rents, low interest rates and growing buyer demand coupled with a low inventory of listings began to put upward pressure on prices. In 2012, as in 1996, the market abruptly grew frenzied with competitive bidding. The city’s affluent neighborhoods led the recovery, and those considered particularly desirable by newly wealthy, high-tech workers showed the largest gains. However, virtually the entire city soon followed to experience similar rapid price appreciation.

San Francisco median home sales prices increased dramatically in 2012, 2013, 2014, and then again in the first half of 2015. In 2016, the SF market clearly cooled compared to the competitive frenzies of previous spring selling seasons, but in 2017 and so far, in early 2018, the market came roaring back again for perhaps its hottest market since 2000. In summer 2018, things cooled down significantly through the end of the year – this coincided with extremely volatile stock markets and sharply rising interest rates. The spring 2019 has been strong, but not as hot as spring 2018. So far, as of April 2019, median prices have not surpassed the highs hit in 2018.

Median Sales Price Changes – Longer-Term: 1993 – Present

Comparing San Francisco, California & National
Median Price Appreciation

Since 2012, San Francisco has been out-performing the overall state and national markets.

San Francisco Rents

Besides, home prices, home rental rates are major indicators of what is occurring with housing costs and the local economy. If anything, rents have appreciated even more extremely than home prices in San Francisco (and other areas of the Bay Area) – and, of course, renters get no advantages from low interest rates, multiple tax deductions and advantages, or home-price appreciation over time. One classic indicator of an overpriced home market is when prices outpace rents. Recent changes to federal income tax laws limiting the deductibility of state and local taxes (such as property taxes) has played a part in changing the balance between the two.

It’s interesting to note that SF rents actually dropped much further after the dotcom bubble burst than after the 2008 financial markets crash, though the latter was a much more destructive economic event. It suggests that local rents may be more affected by the simple ebb and flow of high-tech hiring and employment than by other macro-economic issues, such as stock market changes. If one loses one’s job and the likelihood of finding another in the area plunges, it may be an immediate imperative to move to a less expensive rental area (pressuring rents lower); if one’s net worth plunges with a stock market crash, one may no longer afford to buy a home (pressuring home prices lower). This is an oversimplification, but may still go some ways to explaining the different scale of reaction by purchase and rental markets to different macro-economic events.

After peaking in 2015, the SF rental market definitely cooled in 2016, with supply increasing significantly with new construction, demand softening (as the high-tech boom temporarily cooled), and rents beginning to decline, especially at the high end. SF asking rents dropped around 8 – 10% from their peaks in 2015. In 2018, some signs of recovery showed up.

Consumer Confidence

The monthly fluctuations in consumer confidence reported on in the media are relatively meaningless and without context, but longer-term movements are much more meaningful to overall economic trends. Psychology – confidence, optimism, fear, pessimism – often plays a huge role in financial and real estate markets. And events can sometimes turn consumer confidence one way or another very rapidly, whether such movements are rational or not. Generally speaking, pessimism is bad for the economy, confidence and optimism are good, and over-confidence – sometimes called irrational exuberance – is dangerous. It can be hard to draw the line between where confidence moves into irrational exuberance.

Mortgage Interest Rates since 1981

It’s much harder to decipher any cycles in 30-year mortgage rates. Rates remain very low by any historical measure, but have risen since the 2016 election. Interest rates play a huge role in the ongoing cost of homeownership (affordability) and the real estate market. The substantial decline in interest rates since 2007 has in effect subsidized much of the price increases that have occurred since 2011.

Employment Trends

Real estate market cycles have a symbiotic relationship to other economic cycles, such as illustrated in the employment chart above.

Housing Affordability Index (HAI) Cycles, 1991 – Present
for San Francisco & Bay Area, per CA Association of Realtors

Unsurprisingly, there is a reverse correlation between the trend lines for housing affordability rates and those of real estate price cycles (above). HAI rates jump higher in market recessions, peaking at the bottom of the market, and then decline as the market recovers, bottoming out when peak prices are hit. The lowest Bay Area housing affordability housing index rates (probably in history) were hit in 2007 right before the 2008 market crash (subsidized by buyers taking out loans they could not afford). The Bay Area overall is still above those lows in its current recovery.

The 2008 San Francisco Bay Area real estate crash was not caused just by a local affordability crisis: It was triggered by macro-economic events in financial markets which affected real estate markets across the country. It is important to note that in the past (certainly going back at least 50 years), major corrections to Bay Area home prices did not occur in isolation, but parallel to national economic events (though the 1989 earthquake, which occurred just before the national recession began, certainly exacerbated the local downturn). Ongoing speculation on local bubbles (and predictions of awful upcoming local crashes) often neglect to remember this.

Still, dwindling affordability is certainly a symptom of overheating, of a market being pushed perhaps too high. Looking at the charts above, it is interesting to note that the markets of all Bay Area counties hit similar and historic lows at previous market peaks in 2006-2007, i.e. the pressure that began in the San Francisco market spread out to pressurize surrounding markets until all the areas bottomed out in affordability. This suggests that one factor or symptom of a correction, is not just a feverish San Francisco market, but that buyers cannot find affordable options anywhere in the area. We are certainly seeing that radiating pressure on home prices occurring now, starting in San Francisco and San Mateo (Silicon Valley) and surging out to all points of the compass.

Significant increases in mortgage interest rates – as happened in the second half of 2018 (before then subsiding again in 2019) – affect affordability quickly and dramatically, as interest rates along with, of course, housing prices and household incomes, play the dominant roles in this calculation.

Different Bay Area Market Segments:
Different Bubbles, Crashes & Recoveries

The comparison composite chart dramatically illustrates the radically different market movements of different Bay Area housing price segments since 2000. Farther below are updated individual price charts for each price segment.

Again, all numbers in the Case-Shiller chart relate to a January 2000 value of 100: A reading of 220 signifies a home value 120% above that of January 2000. The chart above illustrate how different market segments in the 5-county SF metro area had bubbles, crashes and now recoveries of enormously different magnitudes, mostly depending on the impact of subprime lending. The lower the price range, the bigger the bubble and crash. In the city itself, where many of our home sales would constitute an ultra-high price segment, if Case-Shiller broke it out, many of our neighborhoods have risen to new peak values. Updated C-S charts for each price segment are below.

Since mid-2016, the low-price tier has begun taking the lead in home price appreciation.

Updated Case-Shiller Price-Tier Charts
Low-Price Tier Homes

Huge subprime bubble (170% appreciation, 2000 – 2006) & huge crash
(60% decline, 2008 – 2011). Strong recovery, now slightly above previous peak.

Mid-Price Tier Homes

Smaller bubble (119% appreciation, 2000 – 2006) and crash (42% decline)
than low-price tier. Strong recovery has put it significantly over its 2006 peak.

It is interesting to note that the low and mid-price house tiers basically shrugged off the dotcom bubble popping in 2001, while the high-price house tier and condos (and apartment rents) saw significant declines. This is another example of how difficult it can be to make big, general pronouncements regarding the entire Bay Area market.

High-Price Tier Homes

84% appreciation, 2000 – 2007, and 25% decline, peak to bottom.
Now far above previous 2007 peak values.

Bay Area Condo Values

Other Compass San Francisco Bay Area real estate reports with market conditions, trends, home prices and appreciation rates: 

Napa County Market June 2019 Report

Sales & Prices Increase as the Spring 2019 Market Heats Up, But Inventory Up and Sales Volume Down Year-over-Year.

Median House Sales Price Trend

In 2018, the median house sales price peaked in August, which also saw the highest number of monthly sales during the year.

Sales Volume Trend

March-May Year-over-Year Comparisons

Comparing March-May of 2019 with the same period of 2018, median sales prices were up a little and average dollar per square foot values down a little. Both are mostly explained by the 3% increase in the median size of homes sold: Larger homes will typically sell for higher prices (of course), but lower dollar per square foot values.

The Napa market held up fairly well year over year, but saw some softening in most of the indicators of supply and demand.

Higher-Price Home Markets

Looking at the Napa markets for homes from $1,000,000 to $1,999,999, and for homes $2,000,000 and above: In May, both hit new highs in the number of active listings on the market. Though the number of listings priced $2m+ outnumbered active listings in the lower price segment (first chart below), the number of sales in the more expensive segment were far lower (second chart).

Median Home Price Changes –
Selected Napa & Sonoma County Cities

Comparing annual median home prices to partial year prices is not really an apples-to-apples comparison because of the effect of market seasonality on sales prices, and in Napa, the issue is further complicated by how few sales some of our communities had over the last 5 months.

Note that full-year 2019 median home prices may be significantly different than the year-to-date figures.

Median House Sales Prices by Bedroom Count –
Houses on Lots of 2 Acres or Less

Average Dollar per Square Foot Values –
Houses on Lots of 2 Acres or Less

Click here to go to our updated map of Bay Area median house prices.

Selected Market Indicators

Besides providing context to market dynamics over recent years, these next 2 charts also are excellent illustrations of the extreme seasonality of the Napa County real estate market: Supply and demand usually climbing from February through mid-late summer, then quickly dropping to their mid-winter nadirs.

Selected Economic & Demographic Snapshots

This chart below illustrates historical trends in unemployment rates, using larger counties to the south as examples, but the trend lines are similar across the Bay Area.

In April 2019, the Napa County unemployment rate was 2.7% – very, very low by historical standards, as were the rates for all other Bay Area counties.

The 3 North Bay counties have the highest median ages in the Bay Area, and the lowest percentages of their populations made up of millennials – Marin County most of all. The counties most affected by the high-tech-hiring boom have seen a significant influx of younger workers – especially in San Francisco.

June 2019 San Francisco Market Report

High-demand/low-inventory spring market brings median home sales prices bouncing back to 2018 peaks. San Francisco luxury home sales hit new monthly high.

Median Home Sales Prices

We consider 3-month rolling median sales prices to be more reliable than single month figures, which are much more prone to less meaningful fluctuations. Both houses and condos are basically back up to the peak prices they hit last year at this time. June sales will mostly reflect accepted-offer activity in May, so it will be interesting to see that final bit of spring data. Market activity typically begins to significantly slow for the summer, hitting its mid-year low in August.

Median House Sales Prices since 1990 – The Long-Term Perspective

Luxury Home Sales Hit New Monthly High

For the purposes of this chart, we looked at all home sales of $2,500,000 and above: May 2019 sales were approximately 13% higher than the previous peak in May 2018. More data on the spring luxury home market can be found in the table further down in this report: High-price house sales saw the big jump this spring.

Comparing Year-over-Year Spring Markets

Last year’s spring 2018 was a very, very hot market – around the Bay Area – which created a large burst in home-price appreciation. Spring 2019 in SF has also been very strong, with many of the supply and demand statistics only slightly cooler – a few more days on market, a bit less overbidding, etc. – plus an increase in high-end home sales. Median home sales prices are much the same as last year, re-attaining, but so far, not exceeding previous peaks to any significant degree.

Median Price Changes in Selected Districts

Comparing annual median home prices to partial year prices is not really an apples-to-apples comparison because of the effect of market seasonality on sales prices, but the below analysis is still an interesting look at home-price trends.

We chose these districts to illustrate a range of price points in areas with a good number of sales. Some are up, some are down, some have relatively unchanged median sales prices: It fits in with the overall, city price stability mentioned earlier. Full-year 2019 median home prices may be significantly different than the year-to-date figures.

Further down is a link to an updated San Francisco home price map, featuring the last 12 months of sales.

Neighborhood Home Prices – by Bedroom Count

Following are 2 sample tables breaking out median house and condo sales prices over the past year in 3 city districts by bedroom count. Some neighborhoods had relatively few sales of a particular home size.

Below the tables are links to our complete analyses for all 10 Realtor districts with their 70-odd neighborhoods.

Click on the links below for our complete review of San Francisco neighborhood home prices.

SF Neighborhood HOUSE Prices
SF Neighborhood CONDO Prices
SF Neighborhood Home Price Map

Selected Market Indicators

Besides giving more perspective to longer-term trends, these two charts are also excellent illustrations of how seasonality affects supply and demand statistics.

Selected Demographic & Economic Snapshots

Within the Bay Area, SF has by far the highest percentage of residents aged 25 to 34, and by far the highest percentage of single-person households. It also has the lowest percentage of residents under 5 years of age of any major metro area in the country. So, not too many children, but a big population bulge of millennials.

This next chart graphs Bay Area unemployment rates from 1990 through January 2019. By April 2019, they had typically fallen another half percentage point.

Napa County Real Estate May 2019 Report

In Napa, the market typically begins to warm up in early spring, with both listing and sales volume steadily building through early-mid summer. With April’s end, we now have 2 months of spring season data unaffected by market activity at the end of 2018, when financial markets plunged. As of early May 2019, stock markets have recovered to hit new highs (though some subsequent volatility has developed) and interest rates are far lower than last year’s peak.

Monthly Median House Sales Price – 2 Years

Because the county doesn’t have that many sales in any given month, its monthly median sales prices can sometimes jump around without great meaningfulness. Right now, we are not seeing any significant increase compared to the beginning of last spring, but the next few months will provide more data. In 2018, the Napa County median house price ended up peaking, on a monthly basis, in August, and on a quarterly basis in the 3rd quarter (July through September).

Around the Bay Area, the general trend has been year-over-year stability in median sales prices or small percentage declines. The large y-o-y jumps in appreciation that have been common in recent years have so far not occurred in 2019.

 

This table compares the March-April market statistics of 2018 and 2019. Generally speaking, the Napa County market has cooled somewhat year over year, with the number of active listings, of average days on market, and of price reductions increasing, and the number of sales declining. But the median house sales price – based on a relatively low number of sales during the 2-month period – ticked up a little.

Home Sales by Price Segment & Bedroom Count

The most common home sale in Napa County over the past 12 months was a 3-bedroom, 2-bath house selling between $500,000 and $750,000.

Sales Volumes, Median Prices & Median Sizes – Napa & Sonoma Counties

The next chart breaks out the number of house sales over the past 12 months by city, with median house sales prices and median square footage. (Median means half the sales were for more, or larger size, and half for less, or smaller size.) This analysis focuses on the sale of homes with lots of 2 acres or less – to help keep the median sales price comparisons relatively apples to apples.
St. Helena had the highest median home price in the 2 counties – as it commonly does – and the largest median home size.

Higher-Price Home Sales in Napa & Sonoma Counties

Q1 2019 Luxury & Ultra-Luxury Homes Markets in Napa County

The more expensive the home, the smaller the pool of potential buyers, and generally, these properties take much longer to sell. Napa County has a substantial market of very expensive homes – including estates with significant acreage – but in the highest price segment, $5 million+, the supply of listings in Q1 far exceeded demand. Considering the competition for qualified buyers, correct pricing is critical to effecting a sale.

As a proportion of total active home listings, Napa has far more $5m+ listings than any county in the Bay Area: approximately 8.3% of listings in Napa vs. 2.4% in Sonoma, 5.7% in Marin, and 4.5% in San Francisco.

Home Size & Era of Construction

Many factors influence home construction size during any particular period: Affluence, economic conditions, household size, land costs, population growth, highway construction, natural disasters, etc. Generally speaking, the median sizes of houses built in the Victorian and Edwardian eras – before 1920 – were larger, and then declined into the mid-century period. Home sizes began to climb again with the large population and housing-construction increases in Napa and Sonoma Counties that occurred in the decades following. Recently built houses are larger than ever.
It is common that older homes destroyed by natural disasters – such as during the recent fires in Sonoma and Napa, or in the 1991 Oakland hills fire – are replaced by larger homes. 

Throughout the Bay Area, buyers looking for smaller homes often purchase condos or co-ops, but these only constitute about 10% of the market in Napa County.

Selected Demographic & Economic Factors

Population Change

After years of large population increases around the Bay Area, in the last 2 years through July 1, 2018, growth slowed considerably in most counties, declined slightly in Marin, and dropped more significantly in Sonoma and Napa Counties. In the last year measured by the census, the destruction of thousands of homes by fire in the wine country certainly played a role in this decline, and is presumably a short-term effect as rebuilding proceeds.

The enormous jumps in population occurred further south in counties most affected by the high-tech boom and its accompanying social, economic, quality of life and housing-market effects.

Commuting

Napa County has the lowest average 1-way commute time in the Bay Area, one advantage of living further away from the traffic-clogged hubbub further south. (However, not much use of public transport in Napa.)

Venture Capital Investment

In recent years, the Bay Area has been the biggest destination of venture capital investment dollars in the country. These tens of billions of dollars have constituted a massive factor in supercharging the creation of new companies, hiring, and, eventually, IPOs. Though the biggest effects are concentrated in SF and Silicon Valley, the creation of new wealth certainly affects Napa County as well, especially its second-home market.

San Francisco Real Estate High-Demand Spring Market Slightly Below Last Year’s Home Price Peaks

With April’s end, we now have 2 months of spring season data unaffected by the end of 2018, when financial markets plunged. As of early May 2019, stock markets have recovered to hit new highs, interest rates are far lower than last year’s peak, and our local, unicorn IPOs have begun to roll out after a media frenzy of speculation on their potential effects on the market.

The market has heated up considerably from the slowdown in the second half of 2018, with strong buyer demand for a very limited inventory of listings. Median home sales prices have returned to highs close to those in spring 2018, but, so far, last year’s peaks have not been exceeded. This is a big change from the year-over-year appreciation rates of the past 6-7 years.

However, there are still 2 months of spring sales data to come in (before the typical summer slowdown), and word on the street is that some new listings are again generating feverish bidding wars between buyers.

Monthly Median House Sales Prices

Monthly median sales prices are often affected by other factors besides changes in fair market value – for example, the extreme seasonality of luxury home sales – but the above chart helps illustrate trends over the past 2 years: Spring 2018 was one of the hottest markets in history, with dramatic year-over-year price appreciation. The market then cooled, stock markets turned scary, and interest rates climbed. 2019 has heated up again, but, so far, without any y-o-y median price gains.

The most expensive housing market in the country has, for the time being, stopped becoming more expensive.

Year-over-Year Comparisons

The table below compares the March-April market statistics of 2018 and 2019. Prices were stable, overbidding was down, and luxury home sales were up, but most statistics were remarkably similar to last year’s. The SF and Oakland-Berkeley markets are currently the strongest in the Bay Area.

Home Sales by Price Range & Bedroom Count

Below is an illustration of sales of houses, condos, co-ops and TICs over the past 12 months, by price segment and by number of bedrooms.

Condos now constitute the biggest share of sales in San Francisco, which mostly explains the high columns for 1- and 2-bedroom sales in the $500,000 to $1.5 million range.

District Sales & Median Home Prices

The next 2 charts break down the last 12 months of sales by Realtor District (delineated on the map above). Some districts were split into 2 for these analyses, but all these areas contain neighborhoods of differing characteristics and home values.

House Sales, Median Prices & Median Sizes

The two biggest districts by volume of house sales – Bayview/ Excelsior/ Crocker Amazon (D10) and Sunset/ Parkside/ GG Heights (D2) – are also 2 of the 3 most affordable districts for purchasing a house in the city. Many of the older districts with bigger, more expensive houses are relatively small markets.

Condo Sales & Median 2-BR/2-BA Condo Prices

Condo sales in SF run across a wide range of eras and styles, from Victorian and Edwardian units in small buildings, through brand new, ultra-luxury high-rise penthouses. The breakout of median sales prices pertain to 2-bedroom, 2 bath condos only.

San Francisco Luxury Homes Markets by District

We typically define the SF luxury house market as houses selling for $3 million+, and the luxury condo, co-op and TIC market as those selling for $2 million+.

SF Luxury House Sales by District

The central Noe, Eureka and Cole Valleys district (D5) dominates the market for houses selling from $3 to $4.99 million. The northern Pacific Heights-Cow Hollow district (D7) dominates the $5 million+ ultra-luxury segment. But high-end home sales are scattered across the city.

Luxury Condo, Co-op & TIC Sales by District

Luxury condo sales are concentrated in 3 districts: District 9, where most of the newer, high-rise, luxury projects are found in the South Beach/Yerba Buena area (which 30 years ago was filled with parking lots and auto-stereo shops), and in the old-prestige, northern neighborhoods of Districts 7 & 8, which include Pacific Heights and Russian Hill. (This is also where the city’s high-price co-op units are clustered).

Q1 2019 “Ultra-Luxury” Homes Markets

We start the “ultra-luxury” segments at $5 million for houses, and $3 million for condos and co-ops. There has been a large (and continuing) surge in the construction of very expensive condo projects over the last 15 years, which makes for a greatly increased inventory of high-price condos for sale – and softer market dynamics.

House Size & Era of Construction

Many factors influence home construction size during any particular period: Affluence, economic conditions, household size, buyer age, land costs, population growth, natural disasters, etc. Generally speaking, the median size of houses was larger during the Victorian-Edwardian era, and declined through the 1940’s – when enormous swathes of the city were built out in the south and southwest districts. Home sizes then began increasing again, and are now larger than ever – however, few new houses are currently built in the city.

The sizes of houses built in earlier periods have increased over the years due to renovations: Adding that 2nd bathroom, or a 3rd bedroom behind the garage.

Condos have become the major alternative for people purchasing homes of smaller size.

Selected Demographic & Economic Factors
Population Growth

SF has seen a dramatic population increase over the past 10 years, and by percentage growth, SF had the 2nd highest rate in the Bay Area after Alameda County. But new census data indicates the rate of growth is rapidly dropping.

Our latest burst of growth – an increase of about 78,000 or 10% – with all its social and economic effects, looks paltry compared to the 1940’s, when the city’s population soared by 140,000, a jump of 22% that began with WWII.

Commuting

Venture Capital Investment

In recent years, the Bay Area has been the biggest destination of venture capital investment dollars in the country – and probably the world. These tens of billions of dollars have constituted a massive factor in the local economy, supercharging the creation of new companies, hiring, and, eventually, IPOs. Venture capital is effectively seed money that has exploded into the creation of stupendous amounts of new wealth.

The San Francisco 2-4 Unit Building Market

Prices, Rents & Sales Statistics; Employment; Interest Rates and New Construction

April 2019, Q1 Report

A substantial portion of Q1 statistics reflect new listings and accepted offers occurring during the mid-winter market doldrums (Thanksgiving to mid-January). In November and December 2018, the stock market plunged drastically from its all-time high in September, and interest rates hit their highest point in years: These factors negatively affected buyer demand. Then both turned in dramatically positive directions in early 2019. So, Q1 statistics reflect economic conditions in both Q4 2018 (very negative) and Q1 2019 (very positive). It is also the quarter with the lowest sales volume.

The spring selling season – whose data starts to show up in March, but is mostly reflected in Q2 data – is the most active of the year. As always, there are many economic factors at play impacting the Bay Area housing market, some of which are discussed below.

Median Sales Prices

Median sales prices for SF 2-unit buildings have generally plateaued over the past 4 quarters.

With relatively minor fluctuations, the median sales price for SF 3-unit buildings has been relatively stable for 5 quarters. (There are not enough sales of 4-unit buildings to measure median prices on a quarterly basis.)

Listings & Sales

The number of active listings on the market in March 2019 was down about 10% from March 2018, but about the same as in March 2017. Listing activity usually increases through May-June.

The number of sales in Q1 2019 was down about 33% from Q1 2018, but, as of early April, there were 59 listings delineated as being in contract in MLS – which suggests that Q2 will see a significantly higher sales volume.

Average Days on Market

Average days on market in Q1 2019 were the highest since summer 2017, but are not particularly high by historical norms. Days on market usually drop in Q2 as the market heats up in spring.

2018 District Values & Sales

These recaps of 2018 sales will be updated in our July report.

Rent Rate Trends & Household Incomes

SF rent rates have declined somewhat from peaks in late 2015, but remain the highest in the nation. With the median list rent for a 1-bedroom apartment at about $3500, and a median SF tenant-household income at $76,400, housing affordability remains a huge social, economic and political issue.

Selected Economic Factors

The large increase in new apartment units coming on market in recent years has been a very significant factor in rent rates. 2018 saw a plunge in construction.

A gigantic factor underlying Bay Area housing markets has been the staggering increase in employed residents since 2010. Outward-bound migration trends of residents and businesses – often citing housing costs as one major motivator – have been an increasing concern in recent years, but for the time being, employment numbers have continued to grow.

A wild ride in stock prices, particularly in high-tech: Prices soared to new peaks in summer-early autumn 2018, plunged drastically in Q4 2018, and then saw the biggest Q1 jump in 20 years. Huge amounts of wealth appearing, disappearing and reappearing – another major influence on consumer and investor confidence.

A new surge of large, high-tech unicorn IPOs – mostly of firms headquartered in SF – has just started to roll out. IPOs have historically created vast quantities of new wealth in the Bay Area, though the magnitude of effect of this new wave on specific market segments is yet unknown.

There has been a stunning decline in mortgage interest rates from mid-November 2018 through the end of March – excellent news for buyers.

Market Share by Broker

The merger of Paragon, Pacific Union, Alain Pinel and Hill & Co. into Compass has created the brokerage which dominates the market for multi-unit residential properties in San Francisco.

San Francisco Real Estate Home Prices, Sales & Statistics; Stock Markets; Interest Rates and Unicorns in Spring

A substantial portion of Q1 statistics reflect new listings and accepted offers occurring during the mid-winter market doldrums (Thanksgiving to mid-January). In November and December 2018, the stock market plunged drastically from its all-time high in September, and interest rates hit their highest point in years: these factors negatively affected buyer demand. Then both turned in dramatically positive directions in early 2019. So, Q1 statistics reflect economic conditions in both Q4 2018 (very negative) and Q1 2019 (very positive). It is also the quarter with the lowest sales volume.

The spring selling season – whose data starts to show up in March, but is mostly reflected in Q2 – is the most active of the year, and also typically sees the highest rates of appreciation. As always, there are many economic factors at play impacting Bay Area markets, some of which are discussed below.

Year-over-Year & Longer-Term Trends

Median Sales Prices

Median house sales prices dropped dramatically from last spring, but then spiked up again in March 2019. Spring is typically the season when median prices increase most.

The biggest change since last spring as been a switch from high year-over-year quarterly appreciation rates to zero appreciation and a slight decline in the last 2 quarters. What occurs this spring will be critical to understanding market trends.

New Listings Coming on Market

Year-over-year, there was a plunge in the number of new listings coming on market in Q1 – new listings almost always climb from January through March, but not this year. Were sellers waiting for a hoped-for rush of new IPO millionaires to appear? Will new listing inventory jump now that the IPOs have begun to occur? Q2 will provide much more data regarding the media-frenzy “IPO effect.”

Luxury Home Sales

There has been a significant drop in MLS sales of luxury condos. The jump in the number of new, luxury (and ultra-luxury) condos being built is creating a surge of supply that has increased the competition between sellers for buyers’ attention. (Many new-project luxury condos are neither listed nor their sales reported to MLS, and so are not reflected in this chart.)

Selected Economic Factors
Stock Markets & Unicorn IPOs

A wild ride in stock prices, particularly in high-tech: Prices soared to new peaks in summer-early autumn 2018, plunged drastically in Q4 2018, and then saw the biggest Q1 jump in 20 years. Huge amounts of wealth appearing, disappearing and reappearing – a major influence on consumer confidence and home-buyer demand.

A new surge of large, high-tech unicorn IPOs – mostly of firms headquartered in SF – has just started to roll out. IPOs have historically created vast quantities of new wealth in the Bay Area, though the magnitude of the effect of this new wave on the SF housing market is yet unknown – but currently fiercely disputed. Anecdotally, there have certainly been reports of buyers moving more quickly to beat the “rush of new millionaires” and of sellers waiting to list in order to catch the rush (see New Listing chart above).

Employment

A gigantic factor underlying Bay Area housing markets has been the staggering increase in employed residents since 2010. Outward-bound migration trends of residents and businesses – often citing housing costs as one major motivator – have been an increasing concern in recent years, but for the time being, employment numbers have continued to grow.

New Home Construction

Due to a number of factors, including a rapid increase in land and construction costs, new housing construction in SF dropped dramatically in 2018. The quantity of new homes being built plays a significant role in the supply and demand equation, and thus home prices.

Interest Rates

There has been a stunning decline in mortgage interest rates from mid-November 2018 through the end of March, from 4.94% to 4.06% – to the enormous advantage to buyers. Big drops such as this have helped to recharge buyer demand in the past.

Housing Affordability & Household Incomes

This chart calculates the income required to buy a median-price house in Q4 2018. Median condo prices are substantially less in every county and would require lower incomes.

County median household incomes are broken out below for homeowners and tenants – some Bay Area county incomes are among the highest in the country. However, comparing the chart below to the one above illustrates the disparity between prevailing incomes and the incomes required to purchase in the Bay Area.

Health & Economic Indicators

According to a 2018 ranking of state health conditions by the Commonwealth Fund, California ranks 14th in the nation (1st being best – Hawaii). According to CountyHealthRankings.org, Bay Area counties are at the top of the list within CA for Overall Health Outcomes: Marin, San Mateo and Santa Clara rank 1, 2 & 3, while SF is 8th. On the less positive side, SF has the highest income inequality ratio in the state.

The San Francisco Real Estate Spring Market Begins

Spring 2018 was one of the hottest markets in SF and the Bay Area in the last 2 decades. Then the market began to cool in summer and autumn – demand, sales and appreciation rates generally dropping, while supply and price reductions increased – before the mid-winter doldrums took hold. The magnitude of these changes varied by county, with SF less affected than many others, but still certainly affected.

Since the recovery began in 2012, spring has typically been the most active season of the year, and usually the period during which appreciation gains have been the largest. The spring 2019 market is just getting started amid a diverse set of economic indicators. Financial markets have, so far, recovered in 2019, interest rates have dropped, and big local IPOs loom. We will know much more soon.

Long-Term, Annual Median Price Trends

Short-Term Median Price Trends
3-Month Rolling Figures

Looking at 3-month rolling median sales prices, the SF median house price was virtually unchanged on a year-over-year basis, while the median condo price (second chart below) ticked up a little – but the critical issue is what will happen in the spring months, when sales volumes are much higher.

Median Sales Price Appreciation
1998 – 2018, by District

Markets appreciate due to a wide variety of local and macro-economic reasons: economic cycles, industry booms, inflation, consumer confidence, interest rates, employment, gentrification, new construction, comparative affordability (to other nearby markets), population growth, buyers’ median age, commuting, fashion, and so forth. The combination of factors affecting any particular neighborhood or district in the city is often specific to that market.

In SF and around the Bay Area, more expensive homes have generally appreciated less than more affordable homes, especially over the last 3-4 years. On the other hand, during the last downturn after 2008, the prices of more expensive homes usually declined significantly less. These appreciation percentages should be considered very approximate.

House Median Sales Price Changes
1998 – 2018

Condo Median Price Changes
1998 – 2018

What’s for Sale in San Francisco
as of March 1, 2019

Active Listings by Price Segment
March 1, 2019

The number of active listings fluctuates daily, and the numbers below are increasing as more new listings come on market. These next 3 charts are snapshots of active listings on March 1st.

Houses for Sale by District
with Median LIST Prices. 3/1/19

The supply of listings available to purchase varies widely between city districts, which can be a simple reflection of market size and/or an indicator of supply and demand dynamics. If median LIST prices (below) are well above 2018 median SALES prices (delineated earlier in this report), it is typically a sign that the balance in listings for sale is disproportionately weighted towards higher priced properties, where demand is softer – and/or a sign of overpricing beyond what buyers consider fair market value.

Condos for Sale by District
with Median LIST Prices, 3/1/19

Market Seasonality
New Listings Coming on Market

New inventory usually starts pouring into the market right now, in early spring, to fuel the biggest selling season of the year.

Active Listings on Market

Sales Volume by Month – General Market

The number of sales in the first 2 months of 2019 was down from the same period of 2018, but these are the 2 lowest sales-volume months of the year. A much more significant indicator will be what occurs over the next 4 months during the classic spring selling season. Sales are a somewhat lagging indicator, as they mostly reflect new listings and accepted-offer activity in the previous month or two.

Luxury Home Sales by Month

Market Statistics by City District

In SF and around the Bay Area, higher-priced areas have generally had somewhat cooler markets than more affordable markets in recent years, which is reflected in the next 4 charts. But home price is certainly not the only factor at play in these different neighborhoods.

Sales Price to Original List Price %

Any percentage over 100% reflects overbidding of asking price. Though these percentages have declined somewhat in the past 6 months, they are still incredibly high compared to most other places in the Bay Area and the U.S..

Unlike the house market, various city districts have seen high volumes of newly constructed condos in the last 3 to 4 years, and the increased supply has affected the condo markets in those areas.

Average Days on Market by District

Comparing Bay Area Markets
Homes for Sale under $1 Million
as of March 1, 2019

Bay Area Luxury Homes for Sale
as of March 1, 2019

Bay Area Median Sales Prices, Q4 2018

On a quarterly basis, the highest median house sales price in the Bay Area has been alternating between San Francisco and San Mateo Counties.

County to County Migration

People move to SF and the Bay Area from all over the country and the world, and people leave to move to a vast number of locations, for differing reasons. This analysis looks at those counties with the greatest number of people moving to and from SF. In many cases, there is a large exchange between 2 counties, with residents going in both directions. Often, but not always, the outward flow is greater to counties with more affordable home prices, but there are many factors – such as schools, employment and quality of life issues – at play. (Cook County is where Chicago is located.)

Demographics Snapshot
Educational Attainment
San Francisco vs. U.S.

San Francisco, as well as the greater metro area, is very highly educated against national norms.

Education & Income
Disparity between the Sexes

An indicator of the income-generating value of education, along with an unhappy indicator of where progress remains to be made in income equality. (As an aside, real estate is certainly one of the first professions that saw income equality established between the sexes: Women have been holding their own and sometimes dominating rankings of top Bay Area agents for many decades.)

The statistics in this report are very general and approximate indicators based upon listing and sales data pertaining to assortments, of varying size, of relatively unique homes across a broad spectrum of locations and qualities. How these statistics apply to the current value, appreciation trend, and prevailing market conditions of any particular property is unknown without a specific comparative market analysis.

Marin Real Estate Heading into the 2019 Market

As of early February, the government shutdown is over – at least for a couple more weeks – the stock market has recovered dramatically from its late 2018 plunge, and interest rates are well down from November highs. A good number of large, local, high-tech “unicorns” continue to plan IPOs in 2019. All these are positive economic indicators for the Bay Area real estate market. However, indicators have proven to be volatile over the past 5 months, and their future direction should not be taken for granted.

As detailed in recent reports, there was some cooling in the market in the second half of 2018, after a very hot spring. The month of January typically has the fewest sales of the year, sales which mostly reflect activity during the December market doldrums: We don’t consider its data to be a reliable indicator of conditions or trends. But activity is picking up, and the beginning of the spring sales season – typically the strongest market of the year – will soon provide more direction as to where the market is heading.

Market Overviews

Median sales prices often fluctuate by month or season, and such short-term changes often have little to do with changes in fair market value: There can be other supply and demand factors at play. But these charts illustrate the longer-term trends in appreciation in the Marin market.

This median condo value chart has the monthly fluctuations smoothed out.

Since San Rafael and Novato are by far the largest markets in Marin by sales volume, they have an outsized impact on county median sales prices. Further down in this report, median prices are broken out by city and town. The dominant home sale in the county is the 3-bedroom house, with 4-bedroom houses not far behind.

Annual Sales by Price Segment since 2012

Since 2012, home sales under $1 million have dropped by half as prices have steadily appreciated. This chart shows the migration of sales to higher price segments.

Annual Luxury Home Sales since 2012

Home sales at prices of $3 million and above in 2018 were about the same as the number sold in 2017. The big jump was in the first couple years of the recovery, 2012 to 2014.

Marin Home Sales by Size

One of the many differences between Marin and San Francisco is that Marin has much higher percentages of larger homes: 60% of SF sales in 2018 were of homes smaller than 1500 sq.ft., while in Marin the percentage was only 32%. Factors behind this are age of construction, the quantity of condo construction in recent decades, household affluence and median household size.

This next chart illustrates how the extremely hot spring 2018 market in Q2 cooled off in the second half of the year. This cooling is a relatively common dynamic each year, and Q3 and Q4 2018 readings are very similar to those in Q3 and Q4 2017. Some other Bay Area counties have seen more market softening than Marin since last summer.

Median Price, Average Dollar per Square Foot & Median Home Size by City

City values are influenced by many factors, including location, of course, but median home size is another basic consideration. All things being equal – especially pertaining to the quality of location – a smaller home will sell for a lower price, naturally, but a higher dollar per square foot value. The fact that Belvedere has the largest median home size and close to the highest average $/sq.ft. value (plus the highest median home sales price) establishes it clearly as the most expensive market in Marin (and one of the most expensive in the Bay Area). But there are several very affluent communities – Ross, Tiburon, Kentfield and so on – close behind it. And of course, communities with lower median or average values often contain extremely expensive homes as well.

How Quickly Homes Sold, by City

With average days on market, the lower the number, the faster buyers are snapping up new listings coming on the market. It is not uncommon for more expensive homes to have higher average days-on-market readings: The pool of buyers is much smaller, and the sellers of large, gorgeous homes are somewhat more prone to overpricing.

With the percentage of sales occurring within 30 days of being listed, the higher the percentage, the stronger the demand as compared to the supply of listings. Again, more expensive homes will often see lower percentages.

A Very Multi-Cultural Place | Bay Area Demographics

Before looking at the next charts, here is the demographics quiz question for today: What 4 nationalities account for the origin of the highest numbers of Bay Area residents?

Stock Prices & Interest Rates

Financial markets and interest rates often influence real estate markets. Changes in the S&P 500 since the 2016 election have been very dramatic. The queasy volatility seen in stock prices – and its effect on household wealth – since they peaked in early autumn has been a wild ride for investors, and for many home buyers.

The changes in the stock prices of some of our Bay Area high-tech giants over the past 3 years make the fluctuations in the S&P 500 look modest. If the big, local unicorn IPOs go forward in 2019 as currently expected, and are received enthusiastically, they could have a substantial effect on housing markets.

Interest rates are a major factor in housing costs and the ability to qualify for home loans. After hitting its most recent high in November, rates have dropped off considerably. Such declines sometimes spark renewed buyer motivation to move forward quickly.