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The 2nd quarter of the year, just beginning, is typically the busiest season for local real estate. In terms of market indicators, what we see today generally reflects the market 4 to 8 weeks ago which means market trends will become much more clear in coming months.  

In the first quarter of 2016, various market segments in the city began to trend in significantly different directions. Houses, especially those below $2 million, are still often selling in a frenzy of bidding: 5, 10 or more competing offers are not uncommon, especially in neighborhoods considered more affordable (by San Francisco standards). Demand remains very high, supply remains extremely low, and new house construction is virtually nil.

However, several buildings of new-construction condos have hit the market or are arriving shortly, with many more in the 5-year pipeline. In recent years, the new supply added to the usual resale-condo inventory still did not keep up with demand, but that may be shifting. As of early April, condo listings actively for sale in MLS are up over 40% year over year, and that does not include most of the new-construction condos currently being sold but not officially on the market (not listed in MLS).

This does not mean that condos are not selling, because many are, at top prices. However the demand-per-listing ratio is declining, and multiple offers are less common. The Pacific continues to push the envelope of price per square foot (rumor has the top two floors have been spoken for by a famous name in the financial world). The upcoming 181 Fremont, a 'boutique high rise' is being built to cater to the 1% of the 1%, and is another project we are tracking closely as it is a relative first in San Francisco based on price expectations for the building. 

On a broad scale it's still unclear whether new condo projects themselves are being affected as these developments often go into contract during the construction phase, and access to information during that period is exceptionally limited. This is a curtain we actively work to pierce by staying in close communication with the sales teams of the individual buildings and sharing information with other agents we know that work them. For instance, at Lumina we just recently closed a Tower D home that has been in contract since Sept 2014. They have a tad over 30% left to sell out of the 656 total units and have been averaging 6 sales a week for the past couple of months. 

Below is a handful of charts from our Chief Market Analyst, Patrick Carlisle, which appeared in our latest market report. But first, we've profiled a couple of extraordinary once-in-a-lifetime properties that just came on the market: a condo in an iconic art deco masterpiece on Telegraph Hill, and a 19th century mansion across from Alta Plaza Park in Pacific Heights.

Finally, check out the least and most expensive real estate deals this past quarter, and be sure to connect with us on
Facebook, Twitter Instagram and Google+ for our latest insights and upcoming opportunities.

As always if you have any questions about the market, or know anyone that would benefit from our experience just let us know!


Meredith Martin & Michael Basham

1360 Montgomery Street #10: One of our favorite condos we've ever seen, listed for sale by two of our favorite agents in San Francisco!

List Price: $1,500,000
Photos & Details

Nestled against the Filbert steps overlooking the bay is one of the most iconic San Francisco buildings, the Malloch. A stunning example of Streamlined Moderne style, the building's amazing details include a magnificent etched glass wall, illuminated glass brick elevator shaft and three 40-foot sgraffito figures adorning the facade. Unit 10 is the famed unit of Lauren Bacall in the movie Dark Passage and still evokes a glamorous interior with curved walls, woodburning fireplace, hardwood floors and a private terrace with sweeping views of the Bay Bridge. The kitchen retains the art deco influence with stainless steel and leaded glass cabinetry with an adjoining round dining area. The bedroom includes a dressing room with deco built-ins and views.

[Paragon Real Estate Group]

2600 Jackson Street: A once-in-a-lifetime opportunity to own an incredible c.1895 home in an A++ location. The period details inside are simply stunning!

List Price: $7,900,000
Photos & Details

This majestic Pacific Heights residence designed by Ernest Coxhead exhibits an eclectic, turn-of-the-century Jacobean Renaissance style. Located on a corner lot, the home's premier setting fronts the center of Alta Plaza Park and showcases iconic SF Bay views to the north. Spanning four levels, the home features breathtaking entertaining spaces, five bedrooms (including guest quarters), five full baths and two powder rooms. A picturesque Garden Room adjoins the Foyer, serving as a parlor for welcoming guests and leading to the enchanted garden. Details include extensive millwork, leaded glass windows, elaborate relief carvings, and period lighting. Ideal location near the shops and restaurants along Fillmore and Union Streets.

[Sotheby's International Realty]

An astonishing 84% of Q1 2016 house sales under $2 million sold for over asking price, a very small decline from the most active quarters of last year. The percentage for more expensive houses is 16 percentage points lower than less expensive houses, but still above Q1 2015. Condos, also shown in two price segments, have lower percentages than any time in the past 4 quarters. We shall see if those percentages rebound in Q2, as usually occurs once the spring season warms up, or whether increased inventory dampens overbidding going forward.

The same trends seen in the first chart above apply to this illustration of the median percentage of sales price over list price over the past 5 quarters. For houses under $2 million, the median percentage over asking price remains incredibly high at 12%, a clear sign of feverish competition between buyers. In contrast, luxury condos overall sold just a tiny bit above list price (less than one half of one percent), and in those districts seeing the most high-rise, luxury condo construction, the median sales price to list price percentage fell well below list price (not shown on chart). More supply means less competition and less sense of urgency in buyers; overbidding becomes rarer and buyers negotiate more aggressively.

Perhaps nothing is more indicative of a cooling market than increasing numbers of listings expiring and being withdrawn from the market without selling. Q1 2016 saw big jumps in expired/withdrawn condo listings over the first quarters of the previous 3 years. Many such listings end up coming back on the market at lower prices.

Again, houses under $2 million have maintained a very high level of listings going into contract on a monthly basis. High percentages of this statistic keep inventory low even when increased inventory starts coming on market, analogous to putting food in front of a very fast, hungry eater. However, if a low percentage of listings accepting offers is coupled with increasing numbers of new listings, inventory starts mounting quickly, because more unsold listings from previous months get added on top of the additional new listings streaming onto the market. The slow-eating diner is outpaced by the delivery of new courses, and the table fills up with uneaten food.

So far, any market cooling that has occurred is not showing up in Q1 median sales prices: Median prices for both houses and condos remain close to the high points hit in spring 2015. However, for the first time in 4 years, condo median prices did not jump in the first quarter of the year, though neither was there any significant decline. From 2012 to 2015, overheated spring selling seasons of very high demand and deeply inadequate supplies of homes for sale have fueled most of the home-price appreciation occurring each year in San Francisco. We shall soon know whether this trend will continue this spring, or whether the median prices of some market segments will finally plateau, or even adjust downward with changing supply and demand dynamics.
This newer rebuild micro-studio located at 412 Green Street on Telegraph Hill sold in January for $390,000. Features include hardwood floors, spa-like bath, stainless appliances, common laundry and elevator, and a common roof deck with drop-dead views of Coit Tower, Transamerica Building, Golden Gate Bridge and the SF Bay. 100 Walk Score. Details
2456 Filbert Street in Cow Hollow sold off-market last month for $11,482,352. The single-family home is being constructed by Nova Design Builds and is just 40% complete. You can bet this will be a stunning property when it next lands on the market. Details
"If you want a hardworking, honest, deeply skilled team to handle your purchase and sale in San Francisco, you cannot possibly do better than these two. Trust me. I tried. And they're both awesome people, to boot. "
- Matt G.
Copyright © 2016 Meredith Martin | Paragon Real Estate Group, All rights reserved.

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Meredith Martin | Paragon Real Estate Group · 1593 North Point Street · San Francisco, CA 94123 · USA

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