San Francisco Real Estate Market Report for November 2021

Past, Present and Future of SF Real Estate and the Mortgage Market

To start this market update, I encourage you to watch our latest webinar covering the market and mortgages!

We were joined by mortgage expert Noah Fierro of loanDepot to discuss the past year in SF real estate, what’s in store for 2022, what’s going on in the lending world, and how to make the most of it in your next home purchase or refinance.

The video is timestamped so you can jump to any section that interests you, or watch the whole thing!

Don’t Snooze on the Winter Real Estate Market

As the holiday season approaches, the San Francisco Bay Area real estate market tends to wind down for its slowest months of the year.

San Francisco homes are still listed, bought and sold in the winter months, but at a greatly reduced rate compared to the busy spring, fall and even the somewhat slower summer.

Winter homebuyers often enjoy reduced competition for listings, fewer bidding wars, and more room to negotiate with sellers who are eager to make a deal. It’s a good time to take another look at listings that are still on the market.

For sellers, the winter is an opportunity to make your listing stand out. Many sellers pull their listings from the market, meaning there are fewer listings competing for the smaller cadre of active buyers. Price reductions do tend to spike in this time of year, as sellers on a strict timeline rush to make a deal. But with the right pricing, networking and marketing strategy, you can sell successfully at any time of year.

2021: A Landmark Year in San Francisco Real Estate

The year in San Francisco real estate ambles to a close with home values well above where they started.

In the 3 months up to January 2021, median sales price was:

  • $1,580,000 for single-family homes
  • $1,100,000 for condos

In the 3 months up to October 2021 (the latest data), median sales price was:

  • $1,800,000 for single-family homes
  • $1,225,000 for condos

That’s roughly a 14% price increase for single-family homes (+$220,000), and an 11% increase for condos (+$125,000), all within less than a year. A big year for San Francisco real estate, no doubt.

San Francisco’s Luxury Real Estate Market

(Re)defining Luxury Homes in San Francisco

The lower bounds of luxury real estate market segments are not set in stone. Not only are “luxury” homes defined differently from region to region and city to city, but home values are a moving target (as shown in the numbers above). That said, the data need a cutoff point somewhere.

In San Francisco real estate, we typically define the luxury market segments as over $3 million for single-family homes and over $2 million for condos. However, if upward price trends continue, these figures will need adjustment as median prices inch closer and closer to what was once the higher-end of the market.

In this vein, the following luxury market stats are something of a chicken-and-egg situation. Did more “luxury” homes sell in 2021, or were more “regular” homes thrust into the luxury segment by prevailing market conditions? The answer is a little of both.

Historic Sales in Luxury Real Estate

In the 12 months up to and including October 2021, sales of San Francisco luxury homes grew by:

  • +86% among single-family homes $3 million and up
  • +95% among condos $2 million and up

Overall, 2021’s historic highs in San Francisco luxury home sales nearly doubled their previous records.

In chicken-and-egg terms, some of this year’s historic rise in luxury sales can be attributed to the general upswing in home values. Analyzing the lower-end of each luxury segment over the last 12 months, we’ve seen:

  • +54% more sales of single-family homes between $3 and 3.5 million
  • +70% more sales of condos between $2 and 2.5 million

What really pushed the luxury market to new heights in 2021, though, was the increase in sales of higher-end homes that were already firmly in the luxury segment — before this year’s overall market appreciation.

In the last 12 months, this higher-end of luxury homes has seen:

  • +104% more sales of single-family homes for $4 million or higher
  • +150% more sales of condos for $3 million or higher

While growth was considerable among sales on the cusp of the luxury segment, sales well above the luxury threshold blew them away. This demonstrates clearly that the luxury market was not just boosted by the overall rising tide of home values. In fact, the higher-end of the luxury market saw the greatest growth of any San Francisco real estate price segment in 2021.

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