New condos boost S.F. home sales, but not prices
New-condo construction in San Francisco is causing a surge in home sales, and a moderation in prices.
A total of 542 new and existing homes and condos were sold in September, up 24 percent compared with September of last year, CoreLogic reported Thursday. For the nine-county Bay Area, home sales rose a scant 1.4 percent over the same period.
In August, home sales in San Francisco rose almost 23 percent over the same month last year, compared with a 3.2 percent increase for the Bay Area as a whole, according to CoreLogic, which counts sales in the month they are recorded with the county.
Condo developers typically begin selling units long before construction is completed, but sales are not recorded until the building is ready for occupancy and buyers close escrow. So when
new buildings come online, there can be a clump of closings, which can have a noticeable impact on monthly sales in a county with as few sales as San Francisco. (Alameda, Contra Costa and Santa Clara counties each had more than three times as many home sales last month.)
For example, almost 100 units in the Rockwell at 1688 Pine St., have closed since the building opened in August, including about 46 in September, said Leslie Bauer, a Realtor with Sotheby’s International Realty.
Rockwell units “have been selling for over a year. Now the buildings are ready and people are moving in, so they are closing contracts they have written ages ago. You are going to see now through the end of the year a lot of sales in that (260-unit) building,” Bauer said.
Year to date, total home and condo sales in San Francisco are up 7.5 percent, but down 2.7 percent in the Bay Area overall.
Most of the sales increase in San Francisco came from new construction, primarily condos. “Single-family detached is down 5.3 percent year-to-date. Resale condos are down 9 percent. New-home sales are up 153.3 percent,” said Andrew LePage, a CoreLogic research analyst.
According to the Mark Co., which tracks condo construction, there were 1,200 units available in San Francisco last month, up 83 percent from the same time last year.
It’s not clear what impact new construction is having on prices, because new-condo contracts are often signed long before closing.
The median price of a home in San Francisco last month was $1,090,000, down 0.9 percent from the previous month but up 3.1 percent from September of last year. However, LePage noted that since hitting an alltime high of $1.3 million in April, the median sales price in San Francisco has declined by $210,000 or 16 percent.
In some areas of the city, primarily South of Market, “you are seeing a slowdown in the market,” Bauer said. “China money has slowed down a bit. I don’t know if the election has anything to do with it.” News that the Millennium Tower is sinking “makes people a little nervous about South of Market,” she added.
For the Bay Area as a whole, the median sales price was $654,000 in September, down 1.7 percent from August but up 3.8 percent from September 2015. Prices normally dip between August and September, but only by 0.7 percent on average going back to 1988, CoreLogic said.
The 3.8 percent gain since last September was below the average year-over-year gain of nearly 7 percent over the last two years, CoreLogic added.