Today’s blog post comes courtesy of the legend himself, Tim McMullen. When he’s not cruising Tiburon and soaking up rays, you can find him killing the real estate game. You can catch him at this site, meettimmcmullen.com. His original blog post can be found here.
Our analytics blog posts are a great resource for analyzing trends in Bay Area real estate. If you haven’t had a look at our latest, please check it out here.
The city’s real estate market is a freight train that never stops. The continuously increasing momentum and the never-ending motion are unrivaled in San Francisco. After an excellent Summer season, the typical August slowdown reared its ugly head across San Francisco, flirting with affecting Pac Heights for good. August is notoriously one of the slowest months on
Ironically, houses sold faster in August than they had almost all year (with the exception of May, when it was insane)
Days On Market | Pacific Heights Vs San Francisco
The average days on market between houses, condos, and TICs is shown in the graph above. The SFH market actually slowed by 5 days in August, yet the condominium market accelerated at such a pace it carried the entire market. In broad terms, the wealthier the buyer pool, the more likely they are to vary by seasonality to a greater extent than those buying lower-valued homes as those buyers will traditionally seek leisure and travel around this time.
In most major neighborhood markets, a similar drop-off is seen throughout the Bay Area. Buyers began to perceive the real estate market as overinflated during the summer of 2021, when single-family house purchases reached their highest level in recent history. When buyers become weary of competing and begin to view properties as overvalued, sales prices plummet quickly. Remember, home value is what a buyer is willing to pay, not necessarily what might be in the comps.
The housing market in Pacific Heights was very active this past summer, with prices ranging from $5 million to over $6 million. However, after July, the market began to drop significantly below what we had seen previously. The average sales price in August was $4.4 million.
Median Sales Price | Pacific Heights Vs San Francisco for Single Family Homes
The apparent argument may be made that savvy sellers keep their property on the market until after Labor Day Weekend, but a simple counterargument may also be levied against all listings closing in August, which would indicate that the data point is 10 to 30 days behind.
Regardless, Pacific Heights is cooling down, and it may continue for the rest of 2021. With major technology firms pushing back their Back To Office date from October 2020 to January/February 2021, real estate experts believe the market will be less competitive in the fall than in recent years.
Price Per Square Foot | Pacific Heights Vs San Francisco for Single Family Homes
As you can see, the price per foot for a property in Pac Heights has been breaching peak levels, epidemic or no epidemic. If anything, desirability in this neighborhood has increased tremendously owing to the influx of want-to-be homeowners over the last 18 months. What’s more intriguing is that monthly supply of houses is at an all-time low.
As you can see, the cost per foot for a property in Pac Heights has been surpassing pandemic peak prices. In fact, desirability in this neighborhood has increased dramatically as a result of the recent inflow of want-to-be homebuyers.
What’s more interesting, and what may potentially combat the August slump, is the monthly supply of homes is at an all-time low:
Months supply is a metric that measures how many months it would take to sell out the current amount of goods on the market at the current rate of sale. Isn’t this a case of Pacific Heights, high demand, all over again? Or more truthfully: Pacific Heights, high demand
My prediction for the next month; following Labor Day, there will be a brief spate of activity that should push the market until November, but after Winter + continued pandemic weariness during the colder months when people aren’t required to be in the office/San Francisco in particular, we’ll see a lull in activity.
If you’re selling a house, put it on the market by September 23rd – 30th; otherwise, I’d suggest waiting until April 2022.