San Francisco's real estate market is cooling down
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San Francisco's real estate market is slowing down, according to the latest data from Redfin.
Why it matters: After two-plus years of plummeting inventory and sky-high home prices, Bay Area buyers can finally get some relief.
What's happening: Homes sales prices are decreasing and inventory is increasing.
- Now buyers can take their time and negotiate, said Amanda Jones, who serves on the board of directors of the San Francisco Realtors Association.
- A year ago, five to 10 offers on a house wasn't unusual, Jones said. Now, because the market is less frenzied, homes typically get two or three offers.
- "I think for so many years, we've just been competing and competing, and now's the time to come in and find good value," Jones said.
Yes, but: Mortgage rates are above 6% for 30-year loans which makes monthly payments drastically higher than they would've been a year ago, or even six months ago.
- Even as housing prices fall, the monthly payments might put ownership out of reach for many.
- For example, a $600,000, 30-year loan costs $1,142 more a month than it did in 2021.
August was the fourth consecutive month of inventory increases. It's up 5.3% year over year, per Redfin.
- Closed sales are down 6.3% compared to this time last year.
- Median home prices are down 7.3% year over year, and they're falling monthly.
- In June, the median sales price was $1,582,000 and in August, it was $1,400,000.
Homes are sitting on the market a little longer than usual, too. In August 2022, homes sold in 28 days on average, compared to 15 days in August 2021.
- Buyers have gotten pickier, Jones said. They want to do inspections and negotiate, and when that happens, sales take longer to close.
Bottom line: Home prices are coming down, and monthly mortgage payments are going up.