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Year over Year Market Comparison

by sfishome on June 2, 2010

Would it surprise you to learn that Condo sales are double what they were a year ago

“D7” or San Francisco’s “district 7” per the local Realtor Association includes Pacific Heights, the Marina, Cow Hollow and Presidio Heights.  It’s one of the most sought after locations in the City and an area where I live, my firm is located, and where I do close 50% of my business.  Today we’ll look at its Condo market.

For the 3 months from March 1st thru May 31st in 2009 there were only 25 Condo sales in D7.  In 2010 the same period had 53 sales.  That astounding jump can almost certainly be attributed to the free fall of the stock market last year vs. the huge run up that appears to have recently ended.  Last year many Buyer’s sat on the sidelines with their jaws on the pavement wondering if the world was coming to an end.  They clearly put their home purchase plans on hold in large numbers.  This year many feel far richer than they did last year, and are back in the game.

But how about prices?  On one hand they appear to have increased almost as dramatically.  In the 3 month period in 2009 the median price of the 25 condo sales was $799,000.  This year it was $1,020,000.  On the face of it that looks like a massive 28% gain.  However, looking more closely, the price per SqFt (a very unreliable number mind you) was virtually unchanged – $733 vs. $736.  What appears to have happened is that higher end (meaning larger and more expensive) were especially slow last year and especially hit this year.  To be more precise, only 40% of the 25 sales in 2009 were Condos over $1 million with only 1 over $2 million (that one sold for $3.5 million).  This year 50% of the sales were over $1 million with 4 selling for over $2 million including a $3.6 million sale.

The above is why I refer to the stock market as being the catalyst.  Wealthy people are more likely to be impacted by the ups and downs of the stock market.  In early 2009 they held off on buying homes while they held their breaths – or maybe sunk money into the stock market hoping to ride a wave.  Either way, in early 2010 they let out huge sighs of relief, or great cheers of joy as they saw their holdings sky rocket.  It appears they jumped back into the San Francisco Real Estate market.

With the stock market going through some serious gyrations and a few down weeks in “correction” territory it will be interesting to watch how the San Francisco Real Estate market reacts.

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