August 2024 San Francisco Market Report: End of Summer Real Estate Update
As we move to the end of summer of 2024, the San Francisco real estate market continues to evolve, shaped by a mix of economic factors and seasonal trends. Here’s a behind-the-scenes look at what’s been happening in our local market, as well as some insights into what we might expect as we head into the fall.
San Francisco Market Conditions as of Mid-August
As of August 8th, mortgage rates have declined to their lowest levels in over a year. This dip in rates has brought a significant wave of volatility across financial markets, leaving many to speculate that the Federal Reserve may finally lower their benchmark rate in September—contingent on favorable inflation data expected in mid-August.
San Francisco Seasonal Trends and Market Performance
The summer months have followed a familiar pattern: cooling off after a robust spring selling season. New listings and overall sales activity have slowed, overbidding has diminished, and homes are taking longer to move into contract. This seasonal cooling is typical, but it’s important to note that the three-month rolling median house sales price—while it has dipped—remains higher year-over-year, bolstered by a notable increase in July.
We often see a surge in new listings in September as the market gears up for the autumn selling season, but if mortgage rates continue to drop, August could experience an unseasonal spike in sales activity.
Challenges in California Homeowners’ Insurance
One area of the market that remains particularly challenging is homeowners’ insurance. According to the California Association of Realtors, nearly 7% of recent transactions across the state have fallen out of escrow due to insurance issues. However, there is hope on the horizon: The state's most significant insurance regulatory reform in 30 years is set to take effect by the end of 2024. This reform could bring much-needed relief and stability to this critical aspect of homeownership.
San Francisco House and Condo Price Trends
When we zoom in on San Francisco's housing market, the data tells a compelling story. The median house sales price has shown some expected seasonal fluctuations but continues to ride the waves of longer-term trends influenced by various economic factors. Despite the ups and downs, 2024 has been a year of resilience for housing prices.
For condos, the narrative is slightly different. Over the last five to six years, median condo prices in the Bay Area have not appreciated at the same rate as single-family homes. However, they remain a vital segment of the market, with short-term fluctuations being more common than in the house market.
August 2024 Active Listings and Market Dynamics
The number of new listings typically drops during the summer, and this year has been no exception. However, we expect a dramatic uptick in September, which will likely set the tone for the fall selling season. As of August 1st, 2024, active and coming-soon listings were slightly down year-over-year, with 26% of these listings being houses and the remaining 74% being condos, co-ops, TICs, and townhouses.
San Francisco Luxury Market Insights
The luxury market also follows distinct seasonal patterns, with spring traditionally being the most active season. However, it's not unusual to see a spike in activity during autumn, especially after a slower summer. As of early August, there were 35 luxury homes priced between $5 million and $9.999 million and 13 priced above $10 million, including three listings at $20 million+.
The luxury condo and co-op market similarly sees its peak activity in the spring and fall. Currently, 70 units priced between $2.5 million and $4.999 million, and 23 units priced above $5 million, are active on the market. This segment, too, may see a rise in activity as we move towards the fall.
As we move through the latter part of summer and into early fall, the San Francisco real estate market continues to offer both opportunities and challenges. Keeping a close eye on economic indicators, particularly interest rates, will be crucial as we navigate the remainder of 2024. Whether you’re looking to buy, sell, or simply stay informed, I’m here to help you stay ahead of the curve.
If you have any questions or want to discuss your real estate goals, don’t hesitate to reach out.
