Year-End 2022 Market Report | San Francisco, CA

SAN FRANCISCO

YEAR-END REVIEW & JANUARY 2023 MARKET UPDATE

Dear Clients, Colleagues, and Friends,

I hope you are having a wonderful start to the new year! I come to you from a place of relentless optimism and renewed enthusiasm. In many ways, 2022 felt like a roller coaster, and 2023 will be a year where we see what happens as the market pivots and moves ahead.

With the holidays now behind us, we look ahead to the Spring selling season - historically the busiest time of year for real estate. While we do anticipate an influx of new and refreshed listings to replenish the market’s offerings, it is hard to know if we will see as much of a push as we have in years past…

When comparing the data year-over-year and the long-term numbers, it is so important to look at the longevity of the San Francisco market. While 2022 started off strong, we began to feel a shift in the second half of the year.

You’ll notice that year-over-year there has been a 0.9% decrease in the median sales price for single-family homes and a 2% drop for condominiums. That being said, transaction volume is also down significantly, which impacts this data. The economy and housing market remain in a period of adjustment, causing many to be more cautious as they wait to see how things go. Meanwhile, others are diving into opportunities we haven’t seen in years.

We are always here to help decode what’s really going on, and to share what we are seeing in real time!

Warmly,

The Cotter Group’s Thoughts On The Current Market

OPPORTUNITY

There is incredible opportunity for Buyers right now. As the December ratifications close this month, we are seeing some of those deals.

INVENTORY LEVELS

Inventory is still very low…and though it is clear that demand is reduced from the ravenous pace of 2021 & early 2022, we are still seeing a low volume of homes.

THE PERFECT HOMES ARE MOVING

Homes that check ALL the boxes are still moving quickly & sometimes for over asking price...but the less-thanperfect homes, or ones that do not check all the boxes, are lingering and buyers are coming in with lower offers.

CPI DATA & INFLATION

The Consumer Price Index (CPI) figures released on 1/12 were in line with expectations, and markets generally reacted favorably to the news. Month-over-month inflation hit the forecast number of 0.3%, and year-over-year core inflation continued heading in the right direction, coming in at the forecasted 5.7%.

INFLATION INSIGHT

Overall, we are seeing the FED rate actions working against inflation. While it is still higher than the FED target of 2.5%, it is significantly lower than the 9% number that we saw in Summer 2022.

RATES

Rates are down about 1.5% from their October highs. Conforming rates are hovering around 6%, and some jumbo rates are available lower than that, depending on the specific scenario.

AFFORDABILITY

Affordability will continue to be a major challenge.

2023 INVESTMENT OPPORTUNITIES

There is a move toward real estate investment & portfolio diversification as Buyers recognize they can invest in real estate in addition to their stock portfolios. Buyers see value in the ability to more closely control and manage real estate.

EMPLOYMENT

Employers will have more leverage than in past years, and commuting will become part of the conversation again.

VOLUME OF CLOSED TRANSACTIONS

The number of closed transactions is down 21% for single-family homes & 30% for condos year-over-year. Keep in mind this is based on year-over-year data; when looking at November & December data, these numbers are higher.

Single Family Market

SAN FRANCISCO CITY WIDE

Year-End 2022

MEDIAN SALES PRICE

DAYS ON MARKET

$ PER SQUARE FOOT

END OF YEAR INVENTORY

WENT INTO CONTRACT PROPERTIES SOLD

$1,784,250 13 $1,067 132 2,049 2,411

Year-Over-Year Comparison

DEC 2022 DEC 2021 % CHANGE

WENT INTO CONTRACT

PROPERTIES SOLD

END OF YEAR INVENTORY

# OF PROPERTIES SOLD OVER LIST

AVERAGE % OF LIST PRICE RECEIVED

2,049 2,411 132 76.9% 114.3%

2,668 3,050 259 78.9% 114.7%

-23.2% -21.0% -49.0% -2.5% -0.3%

Sources: SFAR MLS & BrokerMetrics; Property types covered: Single-family. Only property data posted on the MLS is covered. All information is deemed reliable, but not guaranteed for accuracy. All data is subject to errors, omissions, revisions, and is not warranted. ©2022 Vanguard Properties. All rights reserved. Equal Housing Opportunity. DRE No. 01486075

Median Neighborhood Values / YE 2022

NEIGHBORHOOD

Pacific/Presidio Heights

Alamo Square/NOPA

Marina/Cow Hollow Russian Hill

Cole Valley/Haight

Lower Pac/Laurel Heights

Noe Valley

Buena Vista/Corona Heights

Castro/Duboce Triangle Hayes Valley Diamond Heights

Ingleside Terrace/Lakeside Richmond/Lake Street Missino Bernal Heights/Glen Park Potrero Hill

Sunset Westwood Park/Sunnyside

Excelsior/Portola Bayview/Hunters Point

AVG SOLD PRICE

$5,887,500 $4,310,000 $3,938,000 $3,663,751 $3,497,500 $3,486,500 $2,837,500 $2,750,000 $2,650,000 $2,592,250 $2,425,000 $2,324,000 $2,262,500 $2,200,000 $1,850,750 $1,805,000 $1,731,500 $1,637,500 $1,250,000 $1,100,000

$ / SQ. FT.

$1,634 $1,241 $1,474 $1,350 $1,206 $1,178 $1,337 $1,226 $1,321 $1,118 $1,159 $1,000 $1,069 $1,033 $1,096 $1,059 $1,089 $1,086 $888 $708

AVG % OF LIST PRICE RECV’D

101.5% 106.6% 106.2% 102.5% 110.7% 107.0% 114.6% 110.3% 111.1% 109.8% 105.1% 115.1% 115.6% 105.2% 116.1% 112.4% 122.4% 114.9% 114.5% 111.2%

HOMES SOLD 50 8* 46* 16* 26* 30* 126 37* 59 8* 16* 30* 180 26* 242 53 228 88 167 79

*Denotes small sample size - use caution when interpreting statistics. Sources: SFAR MLS & BrokerMetrics; Property types covered: Single-family. Only property data posted on the MLS is covered. All information is deemed reliable, but not guaranteed for accuracy. All data is subject to errors, omissions, revisions, and is not warranted. ©2022 Vanguard Properties. All rights reserved. Equal Housing Opportunity. DRE No. 01486075

Condominium Market

SAN FRANCISCO CITY WIDE

Year-End 2022

MEDIAN SALES PRICE

DAYS ON MARKET

$ PER SQUARE FOOT END OF YEAR INVENTORY WENT INTO CONTRACT PROPERTIES SOLD

$1,200,000 24 $1,082 400 2,866 3,067

Year-Over-Year Comparison

DEC 2022 DEC 2021 % CHANGE

WENT INTO CONTRACT

PROPERTIES SOLD

END OF YEAR INVENTORY

# OF PROPERTIES SOLD OVER LIST

AVERAGE % OF LIST PRICE RECEIVED

2,866 3,067 400 48.2% 103.6%

4,160 4,404 697 50.0% 103.9%

-31.1% -30.4% -42.6% -3.6% -0.3%

Sources: SFAR MLS & BrokerMetrics; Property types covered: Single-family. Only property data posted on the MLS is covered. All information is deemed reliable, but not guaranteed for accuracy. All data is subject to errors, omissions, revisions, and is not warranted. ©2022 Vanguard Properties. All rights reserved. Equal Housing Opportunity. DRE No. 01486075

Median Neighborhood Values / YE 2022

NEIGHBORHOOD

Pacific/Presidio Heights

Cole Valley/Haight

Marina/Cow Hollow

Noe Valley

Buena Vista/Corona Heights

Castro/Duboce Triangle

Alamo Square/NOPA

Russian Hill

Lower Pacific/Laurel Heights

Richmond/Lake St

Sunset

Mission Dolores

South Beach/Yerba Buena Mission

North Beach/Fisherman’s Wharf

Hayes Valley Telegraph Hill

Dogpatch

Bernal Heights/Glen Park

Nob Hill*

Mission Bay

Potrero Hill

SOMA

Diamond Heights

Bayview/Hunters Point

AVG SOLD PRICE

$1,634,000 $1,620,000 $1,587,500 $1,500,000 $1,480,000 $1,476,200 $1,462,500 $1,402,500 $1,385,000 $1,345,000 $1,330,000 $1,299,000 $1,249,500 $1,173,750 $1,157,500 $1,150,000 $1,116,500 $1,107,500 $1,100,000 $1,100,000 $1,095,000 $1,085,000 $888,000 $800,000 $732,500

$ / SQ. FT. $1,160 $1,128 $1,302 $1,079 $1,148 $1,137 $1,058 $1,186 $1,098 $999 $990 $1,075 $1,129 $965 $1,015 $1,102 $1,097 $954 $1,037 $1,057 $1,100 $1,075 $884 $950 $710

AVG % OF LIST PRICE RECV’D

102.0% 110.4% 104.0% 107.7% 109.2% 108.4% 110.3% 104.7% 104.9% 108.9% 106.7% 106.9% 98.6% 103.3% 101.6% 104.2% 102.9% 101.4% 107.6% 100.0% 99.2% 101.2% 100.0% 104.3% 100.9%

HOMES SOLD 206 81 112 150 63 122 106 122 87 140 26* 78 326 196 50 103 34* 48* 55 116 115 84 150 40* 38*

*Small sample size; use caution when interpreting statistics. Sources: SFAR MLS & BrokerMetrics; Property types covered: condominium/TIC/ Stock COOP. Only property data posted on the MLS is covered. All information is deemed reliable, but not guaranteed for accuracy. All data is subject to errors, omissions, revisions, and is not warranted. ©2022 Vanguard Properties. All rights reserved. Equal Housing Opportunity. DRE No. 01486075