One of my 2013 resolutions is to use more video here on the blog, so above is a quick overview and my take on the market. In a nutshell, we can describe 2012 as the year that saw the return of home buyers to San Francisco real estate.
As you can see in the above chart, there were about 15% more home sales in 2012 as compared to 2011, with single family home sales up 5%, condo sales up 22%, tenancy-in-common sales up 6%, loft sales up by 50% and unit buildings up by 25%. Given that I wrote numerous times last year about how tight inventory was, the explanation seems pretty straightforward: while supply was up, demand was up even more. If you were a San Francisco buyer in 2012, you don’t need me to explain how competitive the market was, and the days on market chart below demonstrates quite clearly that the increase in supply was far exceeded by the increase in demand.
Overall, in 2012 the average (median) days on market was down by about 26%, with single family homes being on the market for roughly 21% fewer days, condos were down by 33%, and lofts were down 45%. Tenancies-in-Common (TICs) also showed a substantial decrease in days on market, down 28%, while units were down 19%.
When we look at these two metrics together, we can see quite clearly that even though supply increased, demand far outpaced the extra supply. Why? I’d attribute this to several factors, including:
- A slight increase in the variety of loan products available. While underwriting standards continue to be incredibly tight, more products became available, including the return of 80/10/10 purchases (80% first loan, 10% HELOC, 10% down payment).
- An incredibly healthy San Francisco economy, powered mainly by tech companies
- Improved buyer confidence in the real estate market
- A slightly better national economy
In the coming days and weeks we will be diving far deeper into the 2012 market stats for San Francisco real estate. If you’ve got a particular question, please don’t hesitate to leave it in the comments.