Seizing the Moment: San Francisco's Real Estate Market in 2023
Vivre Real Estate September 11, 2023
Real Estate
Vivre Real Estate September 11, 2023
Real Estate
Curious what's going on so far in 2023 in San Francisco's real estate landscape? Whether you're a seasoned investor or a first-time homebuyer, the fluctuating market conditions can leave you puzzled.
Our recent newsletter was inspired by the timeless wisdom of Warren Buffet, who advises to "Be fearful when others are greedy, and greedy when others are fearful." This blog aims to demystify the current trends in San Francisco's real estate market. We'll quickly explore the factors that are influencing buyer and seller behavior, and offer actionable insights to help you make informed decisions. For a deeper dive into the SF Bay Area real estate market, be sure to read our full newsletter and blog post at DanielleLazier.com.
The San Francisco real estate market in 2023 is complicated. (What's new?) With home sales down but prices holding strong, it's a confusing time for both buyers and sellers. So, what's holding people back? The answer lies in two key factors: affordability and inventory.
Food for Thought: Are you letting fear or greed dictate your real estate decisions?
Current mortgage rates are a critical factor affecting housing affordability, and they've been making headlines recently. According to the Mortgage Bankers Association, home loan applications have plummeted to their lowest levels since December 1996. This is largely due to 30-year fixed rates hovering above 7% nationwide. However, the situation in San Francisco is a bit different. Many buyers in the city are locking in rates that are 1-2% points lower than the national average.
But why does this matter? Lower mortgage rates can significantly reduce your monthly payments and the overall cost of the loan, making homeownership more accessible. It's crucial to look beyond the headlines and consult with mortgage professionals to understand what rates for which you might realistically qualify.
Food for Thought: Are you looking only at the rates in the news headlines, or have you explored your options to find the most favorable mortgage terms?
Would you be surprised to hear that at current rates of listing/sale it's still a seller's market in San Francisco? Yes, fewer homes are being sold this year than in the red-hot market of 2021/early 2022. However, the pace of sales (buyer demand) continues to exceed the pace of new listings coming to market (seller supply). With less than 2 "months supply" of houses and less than 4 of condos in SF, most of the city remains firmly in a seller's market, typically seen as over 4-6 months supply. (Definitions can vary.)
What does all this mean for you? Well, there are still challenges for buyers and sellers in this market—affordability and inventory, which also affects buyers who will sell again. However, compared to the rabid market of 2021, the slower pace of the market can be helpful. For buyers, less intense competition could lead to better negotiation terms (though the most desirable and well-marketed properties are still hotly contested). For sellers and homeowners in general, home prices are holding steady or even rising. In San Francisco this year, median prices for houses and condos ranging from $1–3M have remained remarkably stable, while the higher-end market at $3–5M has even seen an increase.
Food for Thought: Is waiting for the "perfect" market/timing holding you back from exploring your options? At no obligation, we are always happy to discuss your personal situation.
Barbara Corcoran, real estate broker-turned-TV star, suggests that when interest rates drop, property values will soar. With 18+ months of rising rates, there's a lot of pent-up activity in the market.
Food for Thought: Are you prepared to act when the market shifts?
Real estate is a personal journey. Whether you're looking to upsize, downsize, or invest, the timing has to be right for you. So, let's discuss how to make the most of your real estate goals.
Feel free to reach out with any real estate queries. We're always here to help you and anyone you refer to us! Also, consider signing up for our newsletter for the latest updates and insights.
For a deeper dive into these topics, we invite you to read our full article on our sister blog.
Take care and talk soon!
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