The luxury segment of San Francisco’s real estate market was
the last to peak, in 2008, while most other housing segments started to lose steam in
2006-2007. After the financial markets crash in September 2008, the city’s high-end
home market generally lost the least value on a percentage basis, 15-20%, as
compared to the 20-60% drops seen elsewhere. Then it was the first to recover in
late 2011/early 2012. Now, SF luxury home values have accelerated well past the
previous peak values of 6 years ago. The factors include the increasing
strength of the Bay Area economy; the huge, local surge in high-tech and
affiliated wealth; an increase in well-heeled foreign buyers; and the fact that
the highly affluent have, by far, profited most from the recent, tremendous appreciation
in stocks and other financial assets.
San Francisco Luxury Home Sales by Quarter & by Year
The net result: There
is an enormous amount of new and old money sloshing around the Bay Area looking
for homes to buy.
Luxury homes in San
Francisco are typically defined as condos, co-ops and TICs selling for
$1,500,000 and above, and houses selling for $2,000,000 or more. These are
relatively arbitrary thresholds since $2,000,000 might buy a small-ish, fixer-upper
house in Pacific Heights or a large, gracious home in another neighborhood. It
is also true that the significant appreciation since 2011 has simply moved more
sales into the “luxury” price category, which at current trends will soon
Adjusting your screen-view to zoom 125% or 150% will make the charts that much easier to read. A San Francisco neighborhood map can be found at the bottom of this report.
The number of SF luxury home sales in the 2nd quarter of 2014 was more than twice the number sold in the 2nd quarters of 2007 or 2008 before the market crash. Luxury condo sales in particular are skyrocketing.
San Francisco High-End Home Sales by Neighborhood
Luxury house sales in San Francisco are dominated by the swath of established, prestige, northern neighborhoods running from Sea Cliff and Lake Street through Pacific & Presidio Heights and Cow Hollow; by the greater Noe-Eureka-Cole Valleys district (which has seen explosive growth in this market segment since the mid-nineties); and, to a lesser extent, the smaller neighborhoods around St. Francis Wood and Forest Hill.
High-end condo sales have now overtaken luxury house sales in
the city because of all the new-condo construction which occurred over the past
10-15 years – and this building frenzy, which lapsed in the 4 years after the
market crash, is accelerating once again. (Very few new houses are built in SF
anymore, though the ones that are built, are typically quite expensive.) Besides
the older Pacific Heights-Marina and Russian & Nob Hills districts, and the
greater Noe-Eureka Valleys district, the newer neighborhoods of South Beach, Yerba
Buena and Mission Bay have a rapidly growing footprint in luxury condo sales.
And just very recently, high-priced, high-tech, condo buildings are being
constructed in areas such as the Mission, Hayes Valley, and the Market Street and
Van Ness corridors that were not previously considered luxury-home locations.
The first chart is for house sales, and the second is for condo, co-op and TIC sales.
Shifts in the San Francisco Luxury Home Market
These two charts show the shifts that have occurred just in the past 7 years.
Average Dollar per Square Foot Values for SF Luxury Homes
Average dollar per square foot is a very general statistic and how it applies to any particular home is unknown without a specific analysis, but this chart below gives an idea of the extraordinary values now being achieved by San Francisco luxury properties in different neighborhoods of the city.
Luxury Home Sales With & Without Price Reductions:
Sales Price to Original List Price Percentage & Average Days on Market
For the sake of simplicity, this chart looks at all SF home sales of $2,000,000 and above in the 2nd quarter of 2014. The 88% of these listings that sold without price reductions averaged a sales price 9% over
asking price, with a very low average days-on-market of 26 days. These statistics are an indication of a very high-demand market. But not every home sold quickly: Listings that were price reduced averaged a sales price 12% below
original price and spent 2.5 months longer
on the market. And then 35 listings expired without selling, typically due to being perceived as overpriced. Even in a red hot market, one can overprice one's home - and doing so will severely impact the market response.
San Francisco's Most Expensive Condo Buildings
Here one can see the effect of new, high-rise buildings such as the Four Seasons, the Millennium and the Infinity Towers, all located in the greater South Beach-Yerba Buena area, on the high-end condo market in the city. However, note that this list ranks only the largest condo buildings and since many of the condos in the older neighborhoods are in much smaller buildings, they won't show up here even though they have extremely high values as well. Besides location, premium services and expensive amenities, probably the most common element of luxury condos in San Francisco is spectacular views, which can add hundreds of thousands or even millions of dollars to the sales price. (The city's most expensive condo sale ever - a penthouse at the St. Regis - closed for $28m in 2011.)
Biggest Home Sales of 2014 YTD, by Neighborhood
These two charts of the most expensive house and condo sales so far this year are not comprehensive, but simply snapshots of highest home prices achieved in a selection of neighborhoods around the city.
House Values in the Prestige Northern Neighborhoods of San Francisco
This table includes neighborhoods of varying home values, but still gives a fair representation of high-end home-price trends over the past 20 years. Average sales prices and dollar per square foot values have blown past their previous peaks of 2007-2008.
Other neighborhoods besides the "Prestige Northern Neighborhoods" now feature significant luxury home markets. More details on those districts can be found in our Neighborhood Values section of our website, the link to which is at the top left of this webpage.
Paragon is one of the top 4 brokerages in San Francisco for luxury home sales
and has the highest Closed-to-List ratio of any of the city's major luxury property firms.
For your convenience, below is a map of San Francisco neighborhoods and a breakdown of neighborhoods in each Realtor district.
SAN FRANCISCO REALTOR DISTRICTS
District 1 (Northwest):
Sea Cliff, Lake Street, Richmond (Inner, Central, Outer), Jordan Park/Laurel Heights, Lone Mountain
District 2 (West):
Sunset & Parkside (Inner, Central, Outer), Golden Gate Heights
District 3 (Southwest):
Lake Shore, Lakeside, Merced Manor, Merced Heights, Ingleside, Ingleside Heights, Oceanview
District 4 (Central SW):
St. Francis Wood, Forest Hill, West Portal, Forest Knolls, Diamond Heights, Midtown Terrace, Miraloma Park, Sunnyside, Balboa Terrace, Ingleside Terrace, Mt. Davidson Manor, Sherwood Forest, Monterey Heights, Westwood Highlands
District 5 (Central):
Noe Valley, Eureka Valley/Dolores Heights (Castro, Liberty Hill), Cole Valley, Glen Park, Corona Heights, Clarendon Heights, Ashbury Heights, Buena Vista Park, Haight Ashbury, Duboce Triangle, Twin Peaks, Mission Dolores, Parnassus Heights
District 6 (Central North):
Hayes Valley, North of Panhandle (NOPA), Alamo Square, Western Addition, Anza Vista, Lower Pacific Heights
District 7 (North):
Pacific Heights, Presidio Heights, Cow Hollow, Marina
District 8 (Northeast):
Russian Hill, Nob Hill, Telegraph Hill, North Beach, Financial District, North Waterfront, Downtown, Van Ness/ Civic Center, Tenderloin
District 9 (East):
SoMa, South Beach, Mission Bay, Potrero Hill, Dogpatch, Bernal Heights, Inner Mission, Yerba Buena
District 10 (Southeast):
Bayview, Bayview Heights, Excelsior, Portola, Visitacion Valley, Silver Terrace, Mission Terrace, Crocker Amazon, Outer Mission
Some Realtor districts contain neighborhoods that are relatively homogeneous in general home values, such as districts 5 and 7, and others contain neighborhoods of wildly different values, such as district 8 which, for example, includes both Russian Hill and the Tenderloin.
All data from sources deemed reliable, but may contain errors and is subject to revision. Statistics are generalities and how they apply to any specific property is unknown without a tailored comparative market analysis. All numbers should be considered approximate.
© 2014 Paragon Real Estate Group