From Selma Hepp, Chief Economist Pacific Union International – 1/13/2017
Fourth-quarter home sales activity in San Francisco sustained the same momentum as recorded in previous quarters, with relatively fewer sales than last year but a better balance between buyers and sellers. Generally, the largest slowdown in homes sales occurred among properties priced below $1 million and between $2 million and $3 million. The lower-priced category continues to suffer from depleted inventory, while the slowing activity of higher-priced homes resulted from the general uncertainty in the market that began earlier in the year.
Despite a slight increase in inventory, sellers were still reluctant to reduce prices, causing the pace of sales to slow. At the same time, homebuyers remained cautious and were less likely to engage in bidding wars and pay premiums
Looking Forward: Given the recent increase in mortgage rates, along with uncertainties surrounding the new administration, the first quarter may start softer than in previous years. However, with strong housing fundamentals and the Bay Area’s continued economic power, the San Francisco housing market should see another solid spring.
To read Pacific Union’s real estate and economic forecast through 2019 for San Francisco, Marin, and San Mateo counties, click here.