San Francisco Real Estate Market Update | March 26, 2012

The median list price in San Francisco this week is $649,000. The 676 properties have been on the market for an average of 116 days.

Demand measured by the Market Action Index is increasing and days- on-market is trending downward. Even as more properties come available, these are positive trends for the market. The market has not shown strong directional trends in terms of supply and demand. However, inventory is sufficiently low to keep us in the Seller’s Market zone and prices have been moving upward as evidence.

Price trends continued their recent uptrend this week. While still below the market’s price high-point, we’ve seen a nice run recently. Prices have settled at a price plateau across the board. Prices in all four quartiles are basically mixed. Look for a persistent shift (up or down) in the Market Action Index before prices move from these current levels.

The market appears to be placing an increasing premium on homes. When list prices and price per square foot consistently increase in tandem, as they’re doing now, you can often find short-term investment opportunities. Watch the Market Action Index for persistent changes as a leading indicator for these trends to flatten or drop.

Inventory has been climbing lately. Note that rising inventory alone does not signal a weakening market. Look to the Market Action Index and Days on Market trends to gauge whether buyer interest is keeping up with available supply.

The San Francisco market is currently in the Seller’s Advantage zone (greater than 30). The 90-day Market Action Index stands at 32.34 which indicates that demand is strong and available supply of homes gets snapped up relatively quickly.

Three of the four quartiles of the market are in the Seller’s Market zone with relatively low amounts of inventory given the current rate of demand for homes in the quartile. Notice that Quartile 1 (the highest-end price group) is showing weaker demand than the others. It’s not uncommon that the premium segment of the market takes longer to sell than the rest of the group.