A substantial portion of Q1 statistics reflect new listings and accepted offers occurring during the mid-winter market doldrums (Thanksgiving to mid-January). In November and December 2018, the stock market plunged drastically from its all-time high in September, and interest rates hit their highest point in years: These factors negatively affected buyer demand. Then both turned in dramatically positive directions in early 2019. So, Q1 statistics reflect economic conditions in both Q4 2018 (very negative) and Q1 2019 (very positive). It is also the quarter with the lowest sales volume.
The spring selling season – whose data starts to show up in March, but is mostly reflected in Q2 data – is the most active of the year. As always, there are many economic factors at play impacting the Bay Area housing market, some of which are discussed below.
Median Sales Prices
Median sales prices for SF 2-unit buildings have generally plateaued over the past 4 quarters.
With relatively minor fluctuations, the median sales price for SF 3-unit buildings has been relatively stable for 5 quarters. (There are not enough sales of 4-unit buildings to measure median prices on a quarterly basis.)
Listings & Sales
The number of active listings on the market in March 2019 was down about 10% from March 2018, but about the same as in March 2017. Listing activity usually increases through May-June.
The number of sales in Q1 2019 was down about 33% from Q1 2018, but, as of early April, there were 59 listings delineated as being in contract in MLS – which suggests that Q2 will see a significantly higher sales volume.
Average Days on Market
Average days on market in Q1 2019 were the highest since summer 2017, but are not particularly high by historical norms. Days on market usually drop in Q2 as the market heats up in spring.
2018 District Values & Sales
These recaps of 2018 sales will be updated in our July report.
Rent Rate Trends & Household Incomes
SF rent rates have declined somewhat from peaks in late 2015, but remain the highest in the nation. With the median list rent for a 1-bedroom apartment at about $3500, and a median SF tenant-household income at $76,400, housing affordability remains a huge social, economic and political issue.
Selected Economic Factors
The large increase in new apartment units coming on market in recent years has been a very significant factor in rent rates. 2018 saw a plunge in construction.
A gigantic factor underlying Bay Area housing markets has been the staggering increase in employed residents since 2010. Outward-bound migration trends of residents and businesses – often citing housing costs as one major motivator – have been an increasing concern in recent years, but for the time being, employment numbers have continued to grow.
A wild ride in stock prices, particularly in high-tech: Prices soared to new peaks in summer-early autumn 2018, plunged drastically in Q4 2018, and then saw the biggest Q1 jump in 20 years. Huge amounts of wealth appearing, disappearing and reappearing – another major influence on consumer and investor confidence.
A new surge of large, high-tech unicorn IPOs – mostly of firms headquartered in SF – has just started to roll out. IPOs have historically created vast quantities of new wealth in the Bay Area, though the magnitude of effect of this new wave on specific market segments is yet unknown.
There has been a stunning decline in mortgage interest rates from mid-November 2018 through the end of March – excellent news for buyers.
Market Share by Broker
The merger of Paragon, Pacific Union, Alain Pinel and Hill & Co. into Compass has created the brokerage which dominates the market for multi-unit residential properties in San Francisco.