Over 400 new listings came on the market in San Francisco county in the last week, which might very well be the highest amount of listings in the county in the last decade and a half. Considering that there were a large number of homes still on the market, that means over 1,050 homes are still on the market. While an overwhelming majority of these are pre existing homes and therefore do not represent new construction, financial experts are concerned that the sudden surfeit of homes for sale could eventually cause prices to drop.
Others have warned caution about such a pessimistic outlook. Seasonal variability is certainly a factor in the real estate market because a number of agencies will hold onto their listings and not place them on the market until after Labor Day. This is normally done to ensure that buyers have come back from vacations, though this might have less of a distinction in the current year due to the fact that many people have either been unable to travel or elected to not do so.
Analysts are claiming that the current pace of sales has slowed considerably. Sales in the final quarter of this year may be down in terms of a year over year basis if no other changes are made in the near future. That’s making some people extremely anxious when it comes time to set prices for properties that they might have in their portfolios.
The Public Cost of Investment
Portfolio is the operative word according to several people in the financial community. In the past, institutional buyers and well off individuals who had money to burn were able to purchase a great deal of properties all at the same time. Many of these were distressed, which caused their total value to plummet. By releasing these on the market all at the same time, current homeowners have found it increasingly difficult to get the kinds of prices for their homes that they need in order to move.
This has created a situation where homeowners who have to move for economic reasons may be unable to, further adding to concerns that the situation may put additional pressure on public authorities to provide assistance to those who can no longer provide for themselves. At the same time, there seems to be serious debates about the future of area shelters, which may ultimately feel the greatest force of this pressure.
Representatives of San Francisco county will more than likely be looking at condominium prices as well, as these are also experiencing unusual fluctuations as a result of the overall surfeit of housing currently found in the area.
How Condo Prices May Soon Change
Though experts from Know Your City recently ran a piece stating that there are significant differences between townhouses and condos, some have expressed the opinion that the current market makes them much more alike than different. Condo prices have rebounded drastically in San Francisco, yet they’re still quite flat when you compare them with prices from before fiscal year 2020. Median home prices in the city are up approximately 20 percent, suggesting that neither townhouses nor condos have price growth rates that are in line with the overall market.
A large number of condo developments in the greater San Francisco area have come online in the last 5-10 years, and they were failing to sell at the original assumed pace even before last year’s lock-downs came into effect. In fact, there hasn’t been that much difference between pre-pandemic and post-pandemic numbers in the condo industry merely because the numbers weren’t looking that strong before 2020 to begin with.
This combined with the fact that a few developments are set to still open in the next few months is leading more than a few observers to suggest that condo prices will refuse to appreciate in any noticeable way for the foreseeable future.