Another sizzling spring to come?
The trees are filling out, the birds are doing their thing and we’ve switched the clocks an hour forward. What further indication do you need that spring is on the way? Paragon has just released its March 2015 market report titled “San Francisco Real Estate: Here We Go Again?” – and if you didn’t catch the drift from the title, let’s drill down just a little bit more.
If the intensity of the spring season develops as expected, it would be the fourth of its kind since the market recovery took off in early 2012. We’re seeing buyer demand that surged early in the year without a corresponding increase in listing inventory, resulting in competitive bidding and upward pressure on home prices. That said, not every listing is going for over asking price. In fact, some aren’t selling at all. The market is showing hotter and cooler pockets, with more affordable homes (for example, condos going for less than a million) are in particularly high demand.
As you’ll see in one of the accompanying charts, there are seasonal trends in competitive bidding. In February, we were already seeing prices averaging 8 percent over asking. Specifically, houses were averaging 12 percent over asking, condos averaged 7 percent over and 2-4 unit buildings averaged 2 percent over. We’ve previously seen this percentage peak in May, reflective of offers negotiated in late March through early May.
In addition, our definition of seasonality differs from other parts of the country. Here it has less to do with the summer and winter holidays than the actual weather since – unlike the East Coast – we often see spring-like weather during January and February.
Tomorrow we’ll continue our analysis of this report.
Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email firstname.lastname@example.org. www.ceceblase.com