Have We Reached the Bottom Yet? August 2012 San Francisco Real Estate Market Snapshot

August 2012 San Francisco Real Estate Market Snapshot 

Have We Reached the Bottom Yet?

by Randall Kostick, Chief Operating Officer, Zephyr Real Estate

How do you know if the real estate market is on a consistent upward trajectory?

There would be no need for economists (or palm readers for that matter) if the markets followed a perfectly smooth

descent with an equally smooth return to prosperity. The truth is that the only way to be sure that we’ve reached

the turning point is to look backwards.

To add to the complexity surrounding the question of recovery, many political analysts have recently reminded us

that the U. S. economy is typically stagnant during the quarter preceeding a Presidential election. They tell us that

businesses avoid hiring new employees and hold off on new investments until it is clearer what changes the new

administration has in mind.

Now that I’ve painted such a gray picture I can tell you that we may be far enough along in our recovery to see the

transition to a rising market – the signs are strongly pointing toward a recovery in process. The supporting data for

this conclusion involve a rise in San Francisco median sale prices over the past 12 months from $620,000 city-wide

to a startling $725,000 (including single family homes, condos and TICs). Also contributing to this conclusion is a

decisive drop in the percentage of properties that required a price reduction prior to sale from 37% one year ago to

18% today!

For buyers who have been waiting for the market to reach bottom, it appears that it took place about twelve

months ago. The San Francisco market was one of the last locations in the U. S. to feel the impact of the recession

and looks to be one of the first to emerge from it.

Take a look at the two charts below. They describe median sale price and the dropping percentage of listed

properties requiring a price reduction to sell. Once we have a few more sellers deciding to cash in on the existing

excessive demand we’ll have another impressive graph to show you…illustrating the rapid rise in volume of

properties sold. Stay tuned!

San Francisco real estate median sales price is up

San Francisco real estate price reductions are down

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