San Francisco Real Estate: Fall 2023 Update

San Francisco Property Market Insights: Fall 2023

This Fall 2023, our San Francisco real estate team have identified a few key changes in the local housing market. These changes are evident both at the macroeconomic level and in our day-to-day interactions with homebuyers and sellers in San Francisco. From climbing interest rates to an unpredictable stock market, let's delve into what these shifts could mean for you.

Current Housing Market Dynamics in San Francisco

While our market's real estate sales are usually quite brisk in the fall, the San Francisco housing market has thrown some curveballs recently. Mortgage rates have been on the rise since the beginning of October, and the stock market has been anything but stable.

Adding to the complexity is the market's heightened sensitivity to anticipated actions from the Federal Reserve, often overshadowing reactions to real economic data. These shifts have created an uncertain economic environment at the moment.

Buying and Selling Homes in San Francisco: Q4 2023 Insights

If you're contemplating a change in your living situation—be it buying a property in San Francisco, or selling your current home to buy another—these fluctuating rates could result in increased mortgage payments for your next home. On the bright side, the number of new listings in the city reached a peak in September, potentially leading to an uptick in Q4 home sales. Houses are currently seeing more demand than condos, but location and quality trump all, no matter the property type.

For sellers, properties (both houses and condos) that are priced right and located in popular areas continue to attract strong interest. Our team's expertise in listing and pricing strategies has been invaluable in securing sales that meet or even surpass our clients' expectations. [Learn more about our team of top San Francisco Realtors. ✨]

What's Next: San Francisco Housing Market Outlook for 2024

The California Association of Realtors® has offered a fairly positive outlook for 2024, including a 23% surge in existing single-family home sales and a 6.2% increase in median home prices. However, housing supply is expected to remain tight, which could intensify competition. Plus, their predictions rest on the assumption that mortgage rates will fall. That's very possible, but rates could also linger where they are—which at this time of writing is near 8%, a multi-decade high. [Track mortgage rates here.]

The Luxury Condo Market in San Francisco: A Golden Opportunity?

While houses are more popular than condos right now, the luxury condo segment has seen a deeper cooling off trend. This trend presents a unique opportunity for keen-eyed buyers, as the balance of supply/demand is tilting more in their favor.

According to a recent San Francisco Chronicle article, high-end condos like One Steuart Lane have seen a noticeable decline in sales. In fact, more than half of the 120 units at One Steuart Lane remain unoccupied, a trend that's mirrored in other upscale condo buildings throughout the city.

This slowdown is not just a random occurrence; it's influenced by rising interest rates and the challenges San Francisco faces in the post-pandemic landscape. These factors have led some international and local investors to hold off on their investments. However, this cooling trend could be a golden opportunity for savvy buyers. With a decrease in demand and an oversupply of luxury condos which broke ground in 2017-2019, conditions make it an opportune time to consider the high-end condo lifestyle.

A Smart Approach to Luxury Real Estate

In the San Francisco luxury real estate market, clients are savvy and focused on long-term investments. This focus is particularly evident when we look at the market’s division into two groups: those dependent on interest rates and those who aren’t. The latter group is especially active today, seizing opportunities to negotiate and make strategic moves amid market uncertainty.

Diversification continues to be a key strategy. Many of our San Francisco Bay Area clients are wisely expanding their real estate holdings, especially when there’s a drop in property prices. This approach is supported by the current market stability, which is partly due to a decrease in listing inventory. In the case of luxury condos, which saw a burst of new supply around 2017-2019, buyers may find that they have an upper hand. For other properties, especially single-family homes in San Francisco, scarcity is keeping prices and competition afloat even as demand is challenged by factors like mortgage rates and stock volatility.

Let's Help You Reach Your Real Estate Goals

Tracking the San Francisco real estate market can be overwhelming, especially given its recent, rapid-fire shifts. Whether you're ready to take action now or just exploring your options, we're always here for a free, no-obligation consultation to discuss your personal situation.

Whenever you're ready to discuss your goals in SF Bay Area real estate, feel free to reach out to us. Contact Vivre Real Estate today.