Buyer's Market' Defined
Generally speaking, 4-5 months supply of inventory is considered a balanced market between buyers and sellers; less than 4 months is considered a sellers’ market; and more than 5 months is considered a buyers’ market.
By these definitions (as well as others), the home market in many of San Francisco’s neighborhoods is now a strong buyers’ market-which means more choice, less competitive bidding, increased price reductions, and more price negotiation. This doesn’t mean that the best-value homes aren’t still often selling quickly, and with multiple offers – because they are.
The incredibly low interest rates currently prevailing- for those who can qualify under today’s more rigorous financing guidelines – add to the buyer advantage, although all the mortgage brokers I’m speaking with tell me the interest rates are fluctuating widely (aka a half a point in a week).
The higher-end market in districts 5 (Noe/Castro/Haight) and 7 (Pacific Heights/ Marina), and the middle range house market in district 9 (Potrero/Bernal) have slowed way down since September’s Wall Street meltdown. Inventory is very high and the average days on market figures for available homes have soared.
The lower-end house market is now playing a dominant role in SF homes sales, especially in areas such as district 2 (Sunset/Parkside) and 10 (Bayview/Excelsior), which have the lowest months-supply-of-inventory in San Francisco and the highest number of accepted offers in Jan. 09′. District 10 has been the district with the highest numbers of foreclosures in the city and the lowest median sales prices.
Condo inventories have grown substantially in districts 9 (SOMA/South Beach), 6 (Hayes Valley/NOPA/Alamo Square) and 1 (Richmond), but are moderate in district 5 (Noe/ Castro/Haight). TIC’s sales across the city have decreased to very low levels over the past year.
For a list of individual Median days on the market per neighborhood go here.
