Home Prices by City; Short-Term & Long-Term Appreciation; Migration In & Out of the County; Price Reductions; Supply & Demand.
Home Prices & Appreciation Trends by City
Short-Term & Long-Term Trends in County Median Home Values
People Moving In & Out of Napa County
Using new U.S. Census estimates released 8/29/19, this chart attempts to identify U.S. counties, states and international regions with the highest number of residents migrating to and from Napa County. In the Bay Area, there is a general trend outward from more expensive to more affordable places, while in-bound migration is deeply affected not only by exchanges between Bay Area counties, but people arriving from other parts of the state, country and world. Areas often have large two-way exchanges of residents.
Selected Market Statistics
The chart below compares supply, the number of active listings on the market, with demand, as measured by the number of sales. This is a seasonally adjusted graph that smooths out normal monthly fluctuations to provide clearer historical trend lines. As context, the data below begins in 2013, after the market recovery was already well underway. If the data went back to the 2009 – 2011 period, during the post-crash market recession, the divergence between the two lines would be much, much greater than at any time illustrated here.
Neighborhood House & Condo Prices; Short-Term & Long-Term Appreciation Trends; Population Migration In & Out of the City.
After the heat of the spring market, activity typically slows down markedly in July and August. In September, listings start pouring on the market again to fuel the relatively short autumn selling season – in fact, September is typically the single month with the highest number of new listings. Autumn is also a very important time for the luxury home market – luxury house sales often peak for the year in October.
What occurs in the next 2 months, before the mid-winter holiday doldrums begin, will be the next major indicator of market conditions and direction.
Migration: People Moving In & Out of San Francisco
Using new U.S. Census estimates released 8/29/19, this chart attempts to identify U.S. counties, states and international regions with the highest number of residents migrating to and from our county. In the Bay Area, there is a general trend outward from more expensive to more affordable places, while in-bound migration is deeply affected not only by exchanges between Bay Area counties, but people arriving from other parts of the state, country and world. Areas often have large two-way exchanges of residents.
Foreign in-migration is a huge issue in SF and the Bay Area, but it will be another year before any impact of new U.S. immigration policy on foreign in-migration in 2018 shows up in census numbers. The census estimates foreign in-migration in this analysis, but not foreign out-migration.
Short-Term & Long-Term Trends in Median Home Prices
San Francisco is out-performing the Bay Area – most of the other counties have seen 3% to 5% declines in median home prices since peaking in spring 2018, while the city saw a new monthly peak in June and a new quarterly peak in Q2. It has been suggested that the differentiating factor in SF has been the high number of large, local, high-tech IPOs occurring this year since early spring.
In the next chart, the 2019 YTD median sales prices should be considered preliminary until full year data is in. Note that it is more difficult to compare annual median condo prices on an apples-to-apples basis because of the huge number of new construction condos – many at higher prices – coming on market in the last few years. Comparing 2019 YTD to 2018, the median house sales price is about the same, even though new monthly and quarterly peaks were hit year to date.
Supply & Demand Dynamics since 2005
The chart below compares supply, the number of active listings on the market, with demand, as measured by the number of sales. This is a 12-month-rolling graph that smooths out normal monthly fluctuations to provide clearer historical trend lines.
San Francisco Home Prices & Appreciation by Neighborhood & District
The next long series of charts and tables looks first at house prices by neighborhood, and then at condo and co-op prices. We’ll start with our neighborhood/ Realtor District map for easy reference.
San Francisco Median House Sales Prices by District & Neighborhood
San Francisco Median Condo Sales Prices by District & Neighborhood
Note that it is not unusual for median home sales prices to peak for the calendar year in spring (Q2). This is due not only to heightened buyer demand, but also to the extreme seasonality of the luxury home market – more luxury home sales (as a percentage of total sales) pull overall median sales prices up.
Year-over-Year Median Home-Price Appreciation (or Depreciation) Rates
Markets in late 2017 through spring 2018 were very hot virtually throughout the Bay Area – perhaps the hottest they’ve been since 2000, the height of the dotcom boom. In the second half of 2018, markets cooled considerably – besides issues of simple affordability, financial markets saw nerve-wracking volatility and large declines, and interest rates jumped dramatically. Then, in 2019, stock markets recovered to hit new peaks and interest rates hit multi-year lows, and markets heated up again.
However, generally speaking, except for those markets most affected by the slew of local high-tech IPOs – San Francisco and the greater Oakland market – most markets saw either no significant year-over-year appreciation or year-over-year declines in median house sales prices. (Santa Cruz County bucked this trend.) The next major indicator of market direction will come from autumn selling season data: The season runs from early-mid September to early-mid November. Markets then typically go into the mid-winter holiday doldrums for a couple months.
Bay Area & California Long-Term Median House Price Trends
Median House Sales Price Trends by Bay Area County
Compound Annual Home Price Appreciation Rates
When calculating these rates, results can vary enormously depending on the year the calculation begins with. These start with the year 2000 – if we started with 1995 – prices rapidly appreciated between 1995 and 2000 – the rates would jump; if we began with 2007 – the height of the subprime boom – then the rates would drop. (The same issue exists with calculating stock market returns.)
These very approximate calculations do not reflect any of the tax benefits that have applied at various times to home ownership and to the sale of one’s primary residence. And they are based simply on the all-cash purchase price and the sales price, without adjusting for closing costs (or the effect of not paying all cash upon purchase).
Bay Area House & Lot Sizes
Bay Area Median Condo Values
Bay Area Median Dollar per Square Foot Values
Bay Area Luxury Home Markets
Median Sales Prices for Large Homes in Expensive Bay Area Markets
High-end home markets in outlying counties – the four with the lowest percentages in the chart below – have softened considerably, and would typically be considered to be in buyer’s market territory – much more supply than demand. This doesn’t mean, however, that some luxury homes there don’t sell quickly at excellent prices. It does mean that many luxury homes don’t sell without price reductions, or don’t sell at all.
In many ways, average dollar per square foot values give a better indication of what one actually gets for one’s dollar in different counties.
Bay Area & U.S. Home Prices, Appreciation Trends & Affordability
The next chart illustrates the dramatic divergence since 2012 between Bay Area home price appreciation – supercharged by the high-tech boom – and the national trend line.
Median 3-Bedroom Home Sales Prices around the Country
Active Listings on the Market
Home Sales Volumes
Bay Area Home Sales by Price Segment
Bay Area Real Estate Market Indicators
Below are a wide variety of standard market statistics broken out by county or region to illustrate respective market conditions, as well as overall trend lines to illustrate the general market direction and the effect of seasonality on supply and demand.
Looking just at 2019 YTD stats, the greater Oakland-Berkeley market has been the strongest in the Bay Area. In San Francisco, the picture is muddied a little by the fact that the city’s house and condo markets have somewhat different dynamics: New-condo construction has increased supply in that segment, while the supply of house listings has declined markedly since 2010, making houses the scarce resource in a high-demand environment.
Price Reductions & Listings Expiring without Selling
San Francisco Bay Area Median House Sales Prices by City
Bay Area Median List Rents
Selected Economic & Demographic Factors
Behind the real estate boom is the stupendous boom in hiring, specifically in the high-tech fields.
Home Prices, Appreciation & Ownership Costs; Affordability Percentages, Household Incomes, Interest Rates, Rents & Homelessness. August 2019 Report – including 30 illustrative charts.
Housing affordability may be the largest social and political issue in the Bay Area, and the effects of low affordability also greatly impact the general economic picture in a wide variety of important ways – from hiring and business relocation, to the ability of “normal working people” (not enriched by the high-tech boom) to live here. Significant demographic shifts are also taking place as some groups move out and others move in.
Generally speaking, affordability percentages – the percentage of county households who could afford to purchase a median-priced house – ticked up in Q2 2019 as compared to Q2 2018: Median home sales prices were relatively stable year-over-year – some counties up a bit, some down a bit, some the same – but interest rates dropped very significantly over the 12 month period. However, affordability percentages remain low by historical standards – and the Bay Area typically has among the lowest in the nation.
Note: Counties contain cities, and cities contain neighborhoods of varying values, market conditions and trends.
Calculations on affordability percentages, home payments and household incomes are based upon the California Association of Realtors Housing Affordability Index, measuring the percentage of county households able to afford to buy a median priced house with a 20% down-payment at prevailing mortgage interest rates.
The next 2 charts are excerpted from the very in-depth report, “Bay Area Homelessness: A Regional View of a Regional Crisis” put out by Bay Area Council Economic Institute, published April 2019.
It is impossible to know how median and average value statistics apply to any particular home without a specific comparative market analysis. These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term.
Sales & Values by City, Price Segment & Lot Size; Luxury Home Sales; Market Seasonality; Market Indicators by City; Foreign Homebuyers.
A Breakdown of Sales by Price Segment
Sales, Prices & Home Sizes by Lot Size
In San Francisco, houses selling for $8 million and houses selling for $800,000 can both be found on lots under 1/8 of an acre. In Napa and Sonoma Counties, lot size is a major factor in home size and price.
Higher-Price Home Sales
Seasonality, Inventory & Buyer Demand
New listings coming on market, the total number of active listings, and the number of listings going into contract – these all ebb and flow very dramatically by season. Activity typically peaks in late spring or summer, then begins the decline that hits its annual low point in mid-winter.
Though year-over-year inventory levels have been higher than in the past two years, they are not particularly high by historical measures.
As measured by listings going into contract, it was a strong spring. (These numbers will adjust downward a bit if transactions subsequently fall out of contract before closing sale.)
Selected Market Indicators by City
Though there are many factors at play, it’s not unusual for more expensive markets to have softer dynamics as measured by the 2 standard statistics below. The more expensive the home, the smaller the pool of potential buyers. It is also true that more expensive markets are often more prone to overpricing. These are generalities: Some high-end listings grab buyers’ attention and sell quickly.
Market Dynamics by Price Segment
Around the Bay Area in recent years, the supply and demand dynamic has often been closely associated with price range. Generally speaking, buyer demand as compared to the supply of listings available to purchase has been weaker as homes get more expensive.
In the $2 million to $4 million segment, for every 10 homes that sold in Q2 2019, 8 were pulled off the market without selling.
Home Purchases by Foreign Nationals Tumble
According to a new report by the National Association of Realtors – based on a survey of its member agents – the purchase of U.S. homes by foreign nationals plunged in the 12 months through March 2019. California, and the Bay Area in particular, have been top destinations for international homebuyers.
Stock Markets Hit a New High
The last 12 months have been an extremely dramatic time for financial markets as illustrated below. The alternating confidence and fear generated by its swings have been considerable factors in real estate markets. A parallel dynamic has occurred with the large swings in interest rates.
Sales & Values by District and Price Segment, Special Circumstance Sales, Market Seasonality, the Luxury Home Market & Foreign Buyers. The May Case-Shiller Home Price Index was released in late July for the 5-county SF metro area. This chart illustrates the difference in appreciation rates between the Bay Area (higher price markets) and the entire country. Case-Shiller does not use median sales prices but its own algorithm to calculate appreciation. January 2000 home price = 100; 250 = a home price 150% above that of Jan. 2000.
Needless to say, there are many factors behind home sales and values in different communities. Home size is one of them, and median sales prices are not apples to apples comparisons: For example, in Pacific Heights, the average house size is over 4000 square feet, while in Sunnyside, it runs about 1500 square feet.
Note that it is not uncommon for median sales prices to peak for the year in Q2.
Market Dynamics by Realtor District
Q2 is commonly the hottest market of the calendar year, and the statistics below generally reflect a very strong spring 2019 market.
Home Sales by Price Range
Of homes selling for under $1,000,000, over 80% were condos, co-ops and TICs, and most of those were smaller units.
Tenants, Fixer-Uppers, Homes without Parking, Homes with Golden Gate Bridge Views
Market Seasonality: The Autumn Spike, Then the Winter Doldrums
Though spring is the biggest overall selling season in San Francisco, the single month with the highest number of new listings is typically September. This big surge fuels the relatively short autumn selling season – highlighted by the dramatic spike in sales in October. In November, activity begins to plunge for the mid-winter holidays – though homes continue to sell in every season.
Seasonality: New Listings by Month
New Listings – Long-Term Trends, 12-Month Rolling Figures
Seasonality: Listings Going into Contract by Month
Higher-Price Home Sales
The central greater Noe-Eureka-Cole Valleys district now has the highest number of home sales over $2 million, but the northern Pacific Heights-Cow Hollow district dominates sales of $5 million and above.
The SF luxury home market is even more dramatically driven by seasonality than the general market. September often sees a tremendous burst of new listings. October is sometimes the single month with the most luxury house sales.
Long-Term Appreciation Trends by District
Though prices vary, appreciation trend lines since the recovery began in 2012 are often relatively similar.
In the next chart, we combine house sales across the swathe of older, prestige neighborhoods that run across the north of the city – generally speaking, a region of larger houses and higher prices. (Putting them on the chart above would flatten the other trend lines due to issues of scale.) None of these neighborhoods have that many sales – and some have very, very few – so we combine them to increase statistical reliability. Though they are all high-price, prices do vary considerably between them.
Median Two-Bedroom Condo Prices by Realtor District
There is significantly less variation in condo prices in most of the neighborhoods of SF than there is with houses. Much of this has to do with all the new construction that has occurred in the last 20 years. Probably the greatest differences in condo values are between those on lower floors and those on higher floors of new luxury high-rises.
Percentage of Sales Selling for Over List Price by Property Type
Median Percentage of Sales Price to List Price by Property Type
Foreign National Home Buying Tumbles
According to a new report by the National Association of Realtors – based on a survey of its member agents – the purchase of U.S. homes by foreign nationals plunged in the 12 months through March 2019. The drop was particularly steep for Chinese nationals, for whom California (and the Bay Area, in particular) has been the top destination.
Stock Market Hits New High
The last 12 months have been an extremely dramatic time for financial markets as illustrated below. The alternating confidence and fear generated by its swings have been considerable factors in Bay Area real estate markets. A parallel dynamic has occurred with the swings in interest rates.
The spring burst in high-tech IPOs in San Francisco also played a role in the heat of the Q2 market.
The county Q2 2019 median house sales price was a tad above that of Q2 2018, but remains below the peak reached last summer.
Home Sales by Property Type & Bedroom Count
Sales Volumes: General Market & Higher Price Segments
For the overall county market, spring sales volume in 2019 was a little above spring of last year, but both were down from levels seen in previous years. In 2018, Napa home sales volume peaked for the year in Q3, the summer market.
As illustrated in the next two charts, sales of higher priced homes peaked in the second half of last year. Year-over-year, Q2 2019 sales were well down from Q2 2018.
In the $2 million+ market, there were twice as many active listings in Q2 as sold in the last 12-month period. This price segment is deep in “buyer’s market” territory, with supply currently out-pacing demand.
Selected Market Indicators
The market strengthened considerably in spring – as is typical – but, generally speaking, standard measurements of demand show an appreciably softer market year-over-year. This is a very common dynamic around the Bay Area.
Overpricing: Negative Effects for Sellers & Opportunities for Buyers
We performed longer-term analyses of the effects of overpricing – as indicated by the need for price reductions before the property sold – on every major market in the Bay Area and the results were uniformly similar. As would be expected, there were dramatic differences in the sales price to list price percentage and time on market before sale. But there were also substantial differences in the average dollar per square value realized upon sale.
Overpricing lowers values for sellers, which also signifies opportunities for buyers who keep an eye out for price reductions and react accordingly.
Mortgage Interest Rate Trends
A sudden, steep drop in interest rates since late 2018 has reduced home ownership costs considerably for home buyers, thus helping to increase demand throughout the country.