San Francisco Real Estate Buyers Grow Tired of High Prices?
San Francisco Bay Area home prices are on the decline for the first time in four years.
The median price of a home fell 1.8 percent year over year in March, according to a feature by Fortune. Redfin, a Seattle-based real estate brokerage had noted that San Francisco has been one of the most competitive markets in the United States for last few years.
Redfin is reportedly seeing multiple buyers drop from 94 percent last year to 77 percent in March. Redfin chief economist suggested that the drop is not due to inventory. Instead, it was because of the fact that buyers were fed up with the high prices and competition.
The median value of homes in San Francisco was $670,000 in the beginning of 2012 and now it had catapulted to $1.12 million in April. According to Zillow.com, the figure is more than a 67 percent increase.
Realtor Brian Tran reportedly noticed a slowdown, but only in condominium properties. He said that they were selling fewer condos because of the increase of supply brought by large projects coming in the market. However, he stated that single family homes were still doing well.
John Burns Real Estate Consulting in Irvine, California also made the same predictions as Redfin. Two months ago, Burns said that the San Francisco Bay Area was on the watch list for a correction. He also noted the connection of lessening venture capital awards with the Bay Area real estate prices.
Arrian Binnings from Pacific Union, on the other hand, stated that last year that it was not unusual for homes to sell for 12 percent over the asking price for this year, according to a feature by CBS San Francisco. The usual add on was only five or six percent above asking price.
Redfin further noted that pressure had been increasing in markets throughout the country, not just in San Francisco This was due to monthly price growth, low inventory and high competition. At the national level, demand had passed supply by early 2015, when the inventory started to drop in numerous metro areas and sales demand increased at a faster pace. Richardson said that sales grew by 7 percent nationwide in 2015 and there are now not enough homes to maintain the pace this year.