Real Estate Cycles, Interest Rates
& Neighborhood Appreciation Trends
December 2016 San Francisco Real Estate Market Report
We will begin compiling our 2016 market review report soon, but in the meantime here are a few snapshots on appreciation trends in home prices and average dollar per square foot values, and of what is happening with mortgage interest rates.
Bay Area Real Estate Cycles
All the short-term fluctuations up and down have been removed so that the chart only reflects major turning points in the market. This chart is a general overview for 5 Bay Area counties, and there have been significant variations between market trends in different neighborhoods, cities and counties.
San Francisco Median Sales Price Trends
Note that the Case-Shiller Index does not measure home price appreciation by changes in median sales price (as in the second chart above), but uses its own special algorithm, which it believes adjusts for factors that often affect overall median sales prices, but are not related to changes in fair market value of specific properties.
Our complete report on cycles is here: 30+ Years of SF Bay Area Real Estate Cycles. This is by far the most widely read report on our website.
Short & Long-Term Mortgage Interest Rate Trends
Average Dollar per Square Foot Trends by District
San Francisco HOUSE Sales, 2011-2016 YTD
A San Francisco neighborhood and district map is included at the bottom of this report.
Like all value statistics, average dollar per square foot is not a perfect indicator of changes in home values. It can be affected by a variety of factors to create anomalous fluctuations; square footage can be measured different ways; and a fair percentage of home sales do not publish square footage at all, so that the calculations can only be made on those that do.
Average Dollar per Square Foot Trends by Realtor District
San Francisco CONDO Sales, 2011-2016 YTD
The condo market has generally softened more than the house market and most of the district condo markets have plateaued in average dollar per square foot values or dropped a little. Much of this has to do with both a cooling in the high-tech boom (lessening demand) and a surge of new-condo projects coming on market (increasing supply). The district with the most significant decline, 5%, has been District 9, a large district encompassing SoMa, South Beach, Mission Bay, Potrero Hill, Dogpatch and Inner Mission: A large majority of SF new-condo construction is occurring in this area, and thus more definitively shifting the supply and demand dynamic.
On these charts, the only district showing a significant increase was District 2, Sunset-Parkside, but there are really too few condo sales in D2 for the data to be statistically reliable. District 7, Pacific Heights-Marina, saw a small percentage increase, but its 2016 average dollar per square foot value was affected by a sizable number of sales of newly-built, ultra-luxury condos, with very high values. If those sales were deleted, D7 would also have seen a small decline.
None of the declines in either house or condo dollar per square foot values yet suggest anything approaching a market crash. So far the changes appear to be moderate adjustments to shifts in the local economy, increasing new construction, and/or affordability issues at the higher end of the market.
Median House Price Trends by Neighborhood
Statistically speaking, the most reliable data in the chart below is for Noe & Eureka Valleys, which have a high number of sales: The median sales price there has basically plateaued from 2015 to 2016.
San Francisco Neighborhood Map
with Realtor Districts Delineated
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, and longer term trends are much more meaningful than short-term. It is impossible to know how value statistics apply to any particular home without a specific comparative market analysis.
|No one knows San Francisco real estate better than Paragon.|