San Francisco Luxury Condo Prices & Market Trends

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San Francisco Luxury CONDO, CO-OP & TIC
Market Trends Report

Updated February 2018

Link to Paragon's main reports page



As seen in the chart above, so far in 2018, SF luxury home sales have been very strong, higher than in any previous year since the recovery began in 2012. The recent stock market volatility notwithstanding, the economic confidence that has been sweeping the nation is also showing up in our luxury home markets. For example, as of February 16th, the sales of condos, co-ops and TICs at prices of $2m and above has jumped 55% in the city, year over year, and luxury houses by 19%. Note that year-to-date data is very preliminary and much more will be known once the spring selling season really gets started in earnest. Also, if the recent financial market volatility continues and becomes even more dramatic, that may cool high-end home markets (and IPO activity) as it has in the past.

However behind the positive sales statistics, inventory statistics provide a note of caution, especially for what we call the ultra-luxury home segments: houses selling for $5m+ and condos and co-ops selling for $3m+. In those segments, the supply of listings has been surging well beyond demand, and many of these listings are expiring without selling. As an example, ultra-luxury home sales make up about 2.5% of total sales, but as of February 23rd, they made up 12% of active SF home listings (no offer accepted). It appears some sellers are getting a bit over-exuberant regarding the value of their beautiful homes. This is illustrated in the 2 charts below.Further in the report we will look at the considerable variance in market dynamics in different city neighborhoods.






Just because a luxury market segment is notated as being in buyer-advantage market territory does not mean that some listings do not sell very quickly for well over asking price, as some certainly do. On the other hand, there are listings in the lower, seller-advantage price segments that are overpriced and ignored. Ultimately in real estate, it all depends on the specific property, its specific location, its appeal, preparation, marketing and pricing. Again: different neighborhoods are often experiencing very different market conditions in the city, especially in the luxury homes segments.

How the 2018 market plays out depends on a number of factors that are susceptible to change: financial markets, interest rates, the course of the high-tech boom, whether our big, local start-ups proceed with IPOs, political developments, and so on. (Positive & Negative Factors in Bay Area Markets) For the time being, the San Francisco market appears to be off to a heated start characterized by robust demand. Here at Paragon, our 2018 SF sales volume is up 30% year over year, though admittedly we are outperforming the general market, which is up about 5%.


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Luxury Condo, Co-op & TIC Sales
by Era of Construction


The largest group of 2017 luxury sales of these property types were
condos built since 2000, many of which were brand new construction.



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Most analyses in this report are based on 6-month or 12-month rolling figures as those typically provide a better illustration of the general direction of market trends (using larger data sets), as opposed to common monthly fluctuations (based on very small data sets). Each data point is these cases reflects the average or median statistic for the 6 or 12 month period.


Overview: Luxury Home Listing & Sales Volumes
All houses priced $3m+; All condos, co-ops, TICs priced $2m+

Active Listings on Market since 2005



Sales Volume since 2005




Overview: Ultra-Luxury Listings & Sales Volumes
Houses priced $5m+; Condos, co-ops, TICs priced $3m+

Active Listings on Market since 2005



Sales Volume since 2005



The charts above illustrate overall listing and sales volume trends for 1) in the top 2 charts, the entire luxury home market, and then, 2) in the bottom 2 charts, specifically for the more costly ultra-luxury segment. There are some significant differences between the luxury condo and house markets, but, generally speaking, luxury home sales soared since the recovery began in 2012, cooled a bit in late 2015 (financial market volatility, as well as jump in new-luxury-condo construction), and then bounced back in late 2016 and 2017. The inventory of active listings on the market has risen considerably in the past 2 years, which has appreciably altered supply and demand dynamics. As a point of comparison, in the more affordable home segments (especially for houses), supply has not risen, and indeed has declined in some areas, and inventory is still very inadequate when compared to the heated demand.

Further down in this report, we deconstruct the luxury condo market further by price segment (expensive vs. very expensive) and by neighborhood, and that is where some interesting and sometimes dramatically diverging trends come to light.

In this analysis, charts will sometimes use different price thresholds for the luxury designation, depending on when the chart was first created, or whether different property types are being mixed together. Right now, we consider that luxury condos, co-ops & TICs start at about $2m, and luxury houses at $3m - that is roughly the top 10% of their markets. What we call ultra-luxury adds another $1m to condo sales prices, and another $2m to houses, and constitutes about the top 2.5%.

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Market Seasonality

The real estate market in San Francisco is noticeably affected by seasonality with significant ebbs and flows in activity, but the luxury home segment is drastically affected. As illustrated by these 2 charts below, the high-price market wakes up and heats up as the new year gets going, with spring typically being the most active season overall for sales. It then slows way down in mid-summer, spikes back up dramatically for the short autumn selling season, and then plunges for the mid-winter holiday period.

Note the delay between new listings coming on market and listings accepting offers: For example, September is typically the single month with the highest number of new listings, leading to the big October spike of listings going into contract. Sales then usually close 3 to 5 weeks after going into contract.






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New Listings Coming on Market
Long-Term Trends since 2005, 12-Month Rolling Figures

Obviously, the supply of luxury homes available to purchase plays a huge roll in market dynamics. Supply is affected by 3 large factors: 1) the number of new listings coming on market, 2) how quickly these new listings sell, and 3) how many listings are taken off the market because they cannot find buyers (expired and withdrawn listings). The chart below looks at longer term trends for new listing activity: The number of new listings hitting the market accelerated in early 2016 as the luxury segment was cooling due to financial market volatility (Chinese stock market crash, oil price crash, Brexit vote).




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San Francisco Luxury CONDO Market Analysis
Includes co-op and TIC sales as well

The following charts drill down specifically on the luxury $2m to $2.99m market, and then the ultra-luxury $3m+ condo, co-op and TIC market, and also break out statistics on the top neighborhood districts for these sales. These analyses are generated by listings and sales reported to MLS.

Note that it is somewhat more difficult to analyze this market, because of the high numbers of new-construction luxury condos coming on market in recent years (with many more on the way). The new-condo projects sometimes put their expensive condo listings into MLS, but often do not. They sometimes report their sales to MLS, but often do not. Since they often keep their sales activity close to their chests, we often do not know exactly is going on once these projects open their sales offices. However, it is clear that the surge of these very expensive listings is playing a big role in the market, since they swell the supply of listings available to buy for a relatively small number of very affluent buyers. New luxury condo construction is a huge factor in the market dynamics of this segment, especially in the areas in which new construction is heavily concentrated, such as in the greater South Beach-SoMa district.


Overview: Luxury Condo Sales Trends since 2012




The next two charts illustrate how the growth in supply (active listings) in the last 3 years started to outpace the growth in demand (closed sales), especially in the ultra-luxury $3m+ condo segment, which is by far the softest market segment in the city. When this occurs, the need to price correctly right from the moment of going on market becomes an imperative for sellers.

A wildcard in this dynamic are the new ultra-luxury condo projects currently on market, under construction and planned. San Francisco is in the midst of an unparalleled building boom for extremely costly (and gorgeous) condos, often with staggering views. One has to wonder: Are there really enough buyers for these new $3m to $5m+ condos to absorb the increasing supply? Presumably, developers are confident that there are. Some developers do not publish sales activity figures, especially in the marketing period before construction is completed, so it is difficult to have a precise picture of current demand. However, it appears that sales have been strongest in newly built projects in established, prestige neighborhoods where new construction is relatively rare, such as Pacific Heights and Russian Hill, as opposed to areas where new high-rise projects have been and are being built in significant numbers.







Overview: Average Dollar per Square Foot Values




Months Supply of Inventory (MSI)

This 6-month rolling, months supply of inventory chart illustrates 1 thing in particular: For the past 18 months, the MSI for ultra-luxury condos has ranged between 7.2 and 9.2 months of inventory, which signifies a supply above current demand for such properties. This does not include new-project condos not listed in MLS, which, if included, would almost certainly swell these MSI figures further - and there are other large, ultra-luxury, new-condo projects in the works. Note: Much of the drop in December and January is due to sellers pulling their listings off the market for the holiday season: We will now have to wait to see what occurs in the spring selling season, typically the most active of the year.





Luxury Condo Market by San Francisco District
Includes co-op and TIC listings and sales

San Francisco Luxury Condo Sales by Neighborhood


Active Listings by District


The greater South Beach, SoMa, Mission district has by far the highest number of active luxury condo listings in the city. This district is where most of the largest, luxury condo construction projects have been clustered.







Sales Volume by District


The older, high-prestige neighborhoods running across the north of the city from Pacific & Presidio Heights-Marina through Russian, Nob and Telegraph Hills have been dominating the sales of luxury and ultra-luxury condos (the top 2 lines in the next 2 charts). The greater South Beach, SoMa, Yerba Buena, Potrero Hill and Mission district comes next.







Average Dollar per Square Foot by District
Condo sales only

The average dollar per square foot values for luxury condos in the big 3 districts for such sales are currently clustered in the $1400 to $1600 range. In the Noe, Eureka & Cole Valleys district, the average is hovering around $1100 per square foot (which also applies to the Hayes Valley, NoPa and Lower Pacific Heights district, which does not appear on this chart).

Remember that averages almost always disguise an enormous range of values in the underlying individual sales. How an average or median value statistic applies to any particular property is impossible to say without a specific, tailored comparative market analysis.





Overview: Expired/Withdrawn Listings (no sale)




Listings Not Selling (Expired/Withdrawn) vs. Sales

When the number of listings expiring or being withdrawn from the market without selling (the red bars) starts to elongate in comparison to the number of listings selling (the green bars), that typically signifies that sellers want more money than buyers are willing to pay, and/or that the inherent demand for homes of that price in that area is too small to digest the inventory of listings for sale. The examples that stand out in this chart are the luxury, and, especially, ultra-luxury condo segments in the South Beach, SoMa, Yerba Buena area. We believe there are 2 main factors here: 1) the large increase in supply from new luxury and ultra-luxury condo projects coming on market, and 2) the widespread negative press on the leaning/sinking problems at the Millennium Tower - even though the issues there are specific to the building (and there are hopes that a solution has now been found), they seem to have dampened demand in the surrounding area as well. That dampening effect may already be starting to fade.

Note that listings that expire or withdrawn sometimes come back on the market at lower prices, and then sell. And new-construction projects will sometimes list a luxury condo in MLS, which then expires without selling, but when the unit does ultimately sell, the sale is not reported to MLS.





Days on Market & MSI by District

These next two charts echo the chart above: As measured by both average days on market, and months supply of inventory, the greater South Beach-SoMa district (where new construction has swollen supply at the same time the problems at the Millennium Tower has dampened demand) is the softest luxury condo market in the city: It is well into buyer-advantage territory. However, its statistics have been markedly improving since mid-2017. The Pacific Heights-Marina and the Noe, Eureka & Cole Valleys districts are in seller-advantage territory, and the Russian, Nob and Telegraph Hills district is somewhere in the middle.







Pacific & Presidio Heights, Cow Hollow & Marina
Luxury Condo Sales Trends





Russian, Nob & Telegraph Hills
Luxury Condo Sales Trends





Noe, Eureka (Castro) & Cole Valleys
Luxury Condo Sales Trends





South Beach, SoMa, Potrero Hill, Mission
Luxury Condo Sales Trends




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Annual Changes in Classic Market Statistics

The next 6 charts compare year-over-year changes in annual statistics measuring the heat of the market: How quickly do luxury home listings sell (i.e. accept offers)? What percentage of listings sell quickly? Of those listings that sell quickly, how do sales prices compare to asking prices, i.e. average overbidding percentages? What percentage of listings sell for over the final list price? And how many listings expire or are withdrawn without selling?

Generally speaking, the statistics remain generally flat from 2016 to 2017, or reflect the market getting a little bit stronger year over year, but weaker than in 2015, which was the most recent peak in market heat (i.e. demand vs. supply). However, as noted earlier in this report, the number of actual sales in 2017 was higher than in 2015, fueled by an even larger jump in listings.


Average Days on Market




Percentage of Sales Occurring within 30 Days

Though still historically high, the percentage of listings which sell that sell quickly has dropped since the peak in 2015. However, this reduction does not take into account the increasing number of listings that are not selling at all (i.e. expired/withdrawn listings), which would effectively reduce these percentages further.




The below chart reflects overbidding for only those listings selling within 30 days.
If priced well and appealing, buyers are often still competing for the purchase.




Average Overbidding Percentages - All Sales




Percentage of Sales over Final List Price
(Not adjusted for listings that do not sell)




Expired/Withdrawn (No Sale) Listings

The number of listings expiring or being withdrawn instead of selling
has shot up in the last 2 years.



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Listings Selling Quickly; Selling after Price Reductions;
or Not Selling at All


This first chart below, combining luxury homes of all types, illustrates the differences between those listings the market deems attractive and well-priced - on average, selling quickly for over asking price - and those listings that have to go through price reductions before selling, and then those listings that don’t sell at all, but instead expire or are withdrawn from the market.

The second chart below compares the median asking prices, sales prices, and expired/withdrawn (no sale) prices.




Median list prices for those listings that do not sell, are significantly higher than
the median list prices of those that do - which suggests overpricing as a major factor.




Link to our SF luxury HOUSE market report

All our Paragon reports can be found here

San Francisco Neighborhood Affordability

Positive & Negative Factors in Bay Area Markets

Survey of Bay Area Real Estate Markets

San Francisco & Bay Area Demographics



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San Francisco Luxury Condo Market Statistics

Overview trends for condos, co-ops and TICS Selling for $2 Million+
Auto-updating charts - may take a few moments to load

Line graphs reflect 12-month rolling numbers showing long-term trends since 2005.
The bar charts are 3-month rolling, year-over-year comparisons for most recent 3 years


Luxury Condo Sales Volume

Each data point = 12 months sales data



3-month rolling totals, year-over-year comparisons




New Luxury Condo Listings Coming on Market

Each data point = past 12 months of new listing activity



3-month rolling totals, year-over-year comparisons




Active Luxury Condo Listings at End of Month

Monthly average for previous 12 months



Year-over year comparisons, 3-month rolling average




Luxury Condo: Average Dollar per Square Foot Values

Average for previous 12 months of sales



3-month rolling average, year-over-year comparisons




Average Days on Market before Acceptance of Offer

Average for previous 12 month period



3-month rolling average, year-over-year comparisons




Luxury Condo: Months Supply of Inventory (MSI)

Average MSI for previous 12-month period



3-month rolling average MSI, year-over-year comparisons




Median Percentage of Final List Price Achieved on Sale

Median % for previous 12-month period




The spring and autumn selling seasons are the major ones for the San Francisco luxury homes market. As of 2017, we are using $2,000,000 as the threshold for the luxury condo, co-op and TIC market in San Francisco: That approximately defines the top 10% of the market. However, since this threshold has risen as appreciation has occurred, some of the charts used will sometimes have lower thresholds, such as $1.5m or $1.85m. The ultra-luxury segment starts at $3 million, which constitutes the top 2.5% of sales. Of course, what one gets in the different neighborhoods for the same price can vary dramatically: The city has an enormous range in locations, architectural styles, views and amenities.

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SF Condo, Co-op & TIC Sales over $5m
2017 YTD MLS Sales





Overview: Listing & Sales Activity







Overview: Months Supply of Inventory

As will be seen further in this report, the general overview statistics for Months Supply of Inventory disguise significant differences between different segments of the luxury condo market, by district and by price range.




Overview: Average Days on Market




If you wish, you may skip our summary and jump to additional
graphed analyses further below.

MARKET SUMMARY


The luxury real estate market is impacted by a number of factors: positively, by improvement in general economic conditions and confidence, highly-paid employment and population growth, foreign buyers, and especially, by the creation of new wealth in large quantities. All these elements were dynamically present in the Bay Area from 2012 through mid-2015. Then significant economic and political volatility put a damper on the market: Chinese stock market turmoil, the crash in oil prices, Brexit, the U.S. presidential election, as well as an apparent cooling in our high-tech boom, all injected uncertainty into financial markets and our local luxury real estate market from late summer 2015 to late autumn 2016. Furthermore, Bay Area high-tech IPOs, which had created a stupendous amount of new wealth since 2011, basically dried up during this period - and newly rich or substantially enrichened buyers had played a big role in demand.

Generally speaking, most affected was the market for re-sale luxury condos, particularly in those neighborhoods where big, new-construction projects are concentrated and dramatically increasing supply. It is hard to get definitive data on new-project sales activity, but it is believed to have softened as well with the overall jump in listings, all competing for the same buyers.

However, in June 2017, the SF luxury condo market suddenly hit a new high in sales volume. This accompanied feverish spring real estate markets around the Bay Area, though the more affordable segments were most frenzied, and house markets somewhat hotter than condo markets. Consumer confidence climbed, interest rates remained low and the stock market soared to new heights.

The biggest shift in the luxury condo market has been the dramatic year-over-year drop in sales reported to MLS in the greater South Beach-SoMa district, even as listing inventory there has hit new highs. As illustrated below, by virtually every market indicator - months supply of inventory, average days on market, and others - it is the softest luxury condo market in the city. This is the area where many big, new projects continue to come on market, and, to some degree, they are almost certainly cannibalizing MLS sales as they aggressively compete with the resale market. This is also the district where the unfortunate issues at the Millennium Tower (slight sinking and tilting; multiple lawsuits) are being extensively reported upon. On the other hand, the high-end condos that do sell in this district still often achieve the highest dollar per square foot values in the city.

The Pacific Heights-Marina district and the Noe, Eureka (Castro) & Cole Valleys district have much stronger supply and demand statistics in their high-end condo markets, with the greater Russian & Nob Hills district a bit cooler.

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Overview Dollar per Square Foot Analyses





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Most Expensive Luxury Condo, Co-op & TIC Buildings
in San Francisco, by Median Dollar per Square Foot


Each of these buildings had 7 to 23 sales during the period measured.



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San Francisco Luxury CONDO, CO-OP & TIC Market
by Top Neighborhoods & Districts


Each Realtor district delineated on the map above and the charts below contains a number of neighborhoods. For example, Realtor District 9 contains South Beach, SoMa, Mission Bay, Yerba Buena, Potrero Hill and the Mission (as far as luxury condo sales go). Sometimes the chart legends will mention different neighborhoods within the district, but it is always referencing the same District 9.




Top Luxury Condo Districts: Average Dollar per Square Foot Values

The highest luxury dollar per square foot values are achieved in the greater South Beach-SoMa district - almost all high-rises built within the last 20 years or so - and in the swath of much older, high-prestige neighborhoods, such as Pacific Heights and Russian Hill, running across the northern side of the city.



Top Luxury Condo Districts: Listing & Sales Volumes

The South Beach-SoMa district has by far the highest number of active luxury condo listings, and that does not include most of the new-project listings, which are typically not entered into MLS. So supply, or over-supply, is a major issue there in the market dynamic.




This next chart illustrates the abrupt plunge in sales over the past 15 months in South Beach-SoMa (tying neatly into when the Millennium problems started getting press coverage). The Pacific Heights-Marina district is now the top district for sales, followed by the Russian & Nob Hills area. Sales in the two relative "upstarts" in the luxury condo market - the Noe, Eureka and Cole Valleys district and the Hayes Valley-NoPa-Alama Square district - have been significantly growing in recent years.




Top Luxury Condo Districts: Months Supply of Inventory

South Beach-SoMa now has a very high months supply of inventory, while Pacific Heights-Marina and Noe, Eureka and Cole Valleys have very low MSI figures. Russian and Nob Hills have somewhat higher but still relatively low MSI figures in recent months. The lower the MSI, the stronger the demand as compared to the supply of listings available to purchase.

High MSI in South Beach-SoMa does not imply that luxury condos are not selling there, but it does mean that listings generally have to stand out as good values, i.e. priced correctly as well as prepared and marketed properly, to seize the attention of buyers confronted with so many options.




Top Luxury Condo Districts: Average days on Market

The same dynamic seen in months supply of inventory is replicated in the statistic average-days-on-market. Indeed, the dynamic is consistently illustrated, to a greater or lesser degree, in all the following charts.



Top Luxury Condo Districts: % of Sales Accepting Offers within 30 Days

The higher the percentage, the stronger the market.



Top Luxury Condo Districts: % of Sales Selling over List Price

The higher the percentage, the stronger the market.



Generally speaking, the higher the overbidding percentage, the more buyers are competing to win listings. However, it is also not unusual in recent years for lower priced areas to have higher overbidding percentages, and the Noe, Eureka and Cole Valleys district is distinctly less expensive than the other 3 districts illustrated on the chart below.




Top Luxury Condo Districts: Listings Taken Off Market without Selling

The higher the number, in relation to overall district
listing and sales numbers, the softer the market.



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Ultra-Luxury Condo & Co-op Sales in San Francisco

The Top 2.5% of Sales, $3m+

As illustrated in the second chart below, sales at the highest end of the luxury condo and co-op market peaked in spring 2015, while the number of active MLS listings have continued to rapidly climb to peak this past June, so the supply and demand dynamics in this segment have changed considerably in the past 2+ years. This ties in with the financial market turmoil and plunge in local IPO activity that began in late summer 2015. At the same time, some of the recently built as well as upcoming condo projects are aggressively targeting this very expensive niche, adding further to supply.

This market segment targets a very small pool of very affluent buyers and it is not unusual that its statistics for months supply of inventory and average days on market to be appreciably above those in the general market. However, since spring 2015, both metrics have climbed much higher, to an average of 8.5 months of inventory and an average 55 days on market over the past year. This market has been clearly and significantly tilting to the advantage of buyers.

As seen earlier in the list of biggest sales and the chart showing the most expensive buildings, the ultra-luxury segment is totally dominated by neighborhoods such as Pacific Heights, Russian Hill, Nob Hill and South Beach-SoMa.











Please let us know if you have questions or we can be of assistance in any other way.

Link to our SF luxury HOUSE market report

Our complete SF luxury real estate report)

All Paragon Bay Area market reports

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It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis. In real estate, the devil is always in the details.

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.

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