|  |
San Francisco Luxury Homes Report
January 2010
In this report, the luxury home market in San Francisco is defined by houses selling for $2,000,000 or more, and condos selling for $1,500,000 plus. This market bounced back from the crash that occurred in the 3 - 5 months after 9/15/08, but year over year, 2009 luxury house sales were still down about 33% from sales in 2007 and 2008, and luxury condo sales were down about 40% from 2008 and 50% from 2007. Financing became more difficult for upper-end homes and obviously economic conditions affected the market, but much of the drop in sales can be explained by the 15% - 20% drop in values that occurred, i.e., a fair number of homes that were in the luxury range simply no longer qualified as such. Indeed, 2009 sales numbers are quite similar to those in 2006 before values peaked. Depending on neighborhood, peak values for the luxury market usually occurred in 2007 and 2008.
As the number of sales have declined, the average days on market, the number of price reductions, and the number of listings withdrawn from the market without selling rose dramatically -- all are signs of sellers and/or listing agents not wanting to recognize new pricing realities in the market.
Still, the luxury market in San Francisco is very much alive, and of those homes that did sell in 2009, 35% - 40% accepted offers within 30 days of going on market, and on average closed within 3% - 4% of the original asking price. The demand isn't as frantic as it was in previous years, but there is still strong demand for well priced luxury properties. A fair number is still receiving multiple offers and selling for over asking price. Values appear to have stabilized after their large drop, and may have - it's too soon to be definitive - started to tick up in the last quarter.
The data above and below is from sources deemed reliable but may contain errors or omissions, and not warranted. Sales not reported to MLS (such as many new-development condo sales) are not reflected in these statistics. Median price is that price at which half the homes sold for more and half for less. Median prices may fluctuate for other reasons besides changes in value.
|  click for larger image | Change in SF Home Sales by Price Range
With the big changes in economic conditions, sales at the lower price ranges have strengthened and those at the higher have weakened. Many first time buyers entered the market in 2009 and they typically purchase less expensive homes. And the foreclosure home market is still predominately a feature of the low end of the market, clustered in the less affluent neighborhoods. Finally, lending conditions and tax credits are mostly geared to the low and mid range home. | | |  click for larger image | Luxury Home Sales $2m and Above
This chart tracks house, condo and co-op sales of $2,000,000 plus. Here we can see the surge in sales that occurred in 2007 and 2008, the big drop after 9/15/08, and the subsequent recovery at numbers similar to those of 2006. The fourth quarter of 2009 will probably end up with 55 to 60 closed sales, generally consistent with the previous 2 quarters. | | |  click for larger image | SF Home Sales by Price Range
The luxury market by number of sales is a relatively small portion of the city market.
>>>For more information on the general SF real estate market | | |  click for larger image | Luxury House Sales by Neighborhood
High end houses are typically found in a handful of high prestige neighborhoods, which during the height of the market expanded to the Noe/Castro/Haight area. The northern neighborhoods around Pacific Heights have fared the best in 2009, with barely a budge in overall sales numbers. Other areas saw large declines. | | |  click for larger image | Luxury House Sales by Realtor District
The city is divided into 10 districts by the Association of Realtors. Some districts are more homogeneous in values, such as districts 5 and 7, while other districts contain neighborhoods of wildly varying value (district 8 includes both Russian Hill and the Tenderloin). Here is another snapshot of how those areas with significant luxury house sales fared year over year.
>>>Realtor District Map of SF | | |  click for larger image | Luxury Condo Sales by Neighborhood
The SF luxury condo market stretches east from Sea Cliff across the northern neighborhoods to Telegraph Hill, then south around the edges through the Financial District, South Beach and SOMA. Virtually of them, except for Russian Hill, saw large declines in the number of sales. The luxury condo market, like the condo market in general, has been more negatively affected by market changes than the house market. | | |  click for larger image | Luxury Condo Market by Realtor District
Four of the city's 10 districts dominate the luxury condo market. Here is how they fared year over year. As with luxury houses, district 5, a relative new-comer to the luxury home arena, was most dramatically affected. Again, this analysis only covers those sales reported to MLS. Many new-condo development sales, most of which occur in district 9, are not included. For example, the largest condo sale of 2009 was the penthouse of the Millennium in South Beach, which closed, outside of MLS, for over $9,000,000. Paragon was pleased to represent the buyer. | | |  click for larger image | Average Days-on-Market for Luxury Homes
Days on market in this chart measures the number of days between a property going on market and it being designated as "pending sale, contingencies removed." As one can see, the figure has increased dramatically over the past year. | | |  click for larger image | Expired Luxury Home Listings
With the market change, more luxury home listings are being withdrawn from the market without selling, typically due to being perceived as overpriced. The fourth quarter of the year generally sees a large surge as listings expire on December 31st. Many will be re-listed again in January. | | |
| | | | | Please contact us for assistance, information and resources regarding SF real estate of any type. | Paragon Real Estate Group
415.738.7000 | 415.565.0500 | www.paragon-re.com
|
| |
