Besides the surge in home price appreciation in San Francisco, some interesting things have happened in recent years regarding the mix of property types selling. New house construction in the city has been tiny, and the new houses that have been built have generally simply replaced existing house, so the inventory has remained basically static. Condo construction has soared in the last 15 years, with thousands being built in the 2000 to 2008 time frame, and thousands currently under construction or planned. If we included new-condo sales that were not reported to MLS, total condo sales probably exceeded total house sales about 9-10 years ago. Looking at sales reported to MLS, which are almost exclusively re-sales, condo sales overtook houses in 2012. That trajectory is going to continue in future years: in a land constrained city, it rarely makes sense (to a builder) to build one house, where one could build multiple condos, if zoning permits. Besides new construction, there is also the conversion of existing multi-unit buildings and TICs into condos -- adding some hundreds of new condos each year. San Francisco is one of the few counties in the country where condo sales outnumber house sales.
The other two main category of residential property sales, TICs (tenancies-in-common with exclusive right to occupy), which are found virtually no place else except San Francisco, and 2-4 unit building sales, have been changing as well. Each year, there are fewer 2-4 unit buildings in the city -- meaning multiple unit buildings with non-condo and non-TIC use. Virtually none are being built new any more and every year some are turned into TIC units and some into condo units. In the chart below, one can see how sales have fallen over the past ten years. This trajectory, though it will fluctuate, is bound to follow a generally downward path.
TICs were virtually invented in San Francisco in the 1990's -- taking a multi-unit apartment building and turning it into a commonly held building occupied by owners who have exclusive rights to occupy their units. Sellers sold TIC units because they got more money for them than by selling a multi-unit building to a single buyer; buyers bought them because they were similar to condos, but significantly cheaper. As can be seen in the chart below, TIC sales grew rapidly until crashing after the 2008 financial markets crash -- the few lenders who lent on TICs either stopped doing so or raised the interest rate premium they demanded, so much higher that it affected the difference in cost between condos and TICs (which was the reason for creating TICs in the first place). Also affecting TIC inventory and sales: every year a number of TICs are allowed by the city to convert into condos. TIC sales have not yet recovered from the 2008 crash, but still continue to sell in their hundreds each year. Whether this dynamic will change remains to be seen -- there are a variety of complex financial issues (lender) and legal/ political issues (quality of title, renters' rights vs. owner's rights, condo conversion rules) involved with TICs.
Statistics are generalities that sometimes fluctuate without great meaningfulness and may be affected by a variety of seasonal, inventory and economic factors. How they apply to any particular property is unknown without a specific comparative market analysis. All data from sources deemed reliable, but may contain errors and is subject to revision.
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