More tidbits from Paragon’s third-quarter report
Yesterday we started to tackle Paragon’s third quarter report on the San Francisco real estate market. Today let’s continue to unpack what we’ve learned about the third quarter of this year, and what’s going on in our beloved city.
The chart that accompanies this article depicts San Francisco condo sales by neighborhood. A report just published by 48HillsOnline analyzed the San Francisco Assessor’s Office owner mailing records for 23 condo buildings encompassing 5,212 units, most built in the last decade and/or qualifying for the description of luxury real estate. This analysis found that 39 percent of owner mailing addresses were not those of the property, with percentages of 50 percent for uber-prestige buildings such as the St. Regis, Four Seasons and Millennium. This city is increasingly becoming a destination for wealth in addition to being a location for its creation.
However, 61 percent of the owners appear to be owner-occupiers and this is clearly helping to address local home/buyer demand. Of the 39 percent with different mailing addresses, there may be a number of explanations: 1) units are being used as second homes by the ultra-affluent; 2) the units are being used as investments by local or foreign buyers to buy and hold or as short-term AirBnB rentals; and 3) units are being occcupied by dependents, such as children attending college.
Let’s now turn to the average days on the market. We’ve found that the remarkable heat of the city’s real estate market gets even more turned up as buyers bid up home prices. Seasonality also impacts demand, with spring and autumn the biggest seasons, and supply issues are making the San Francisco house market somewhat hotter than the condo market, which is also hot. Keep in mind that because of the time lag between listings coming on market and offers negotiated and the close of actual escrow, September’s crazy market is not reflected here. Current DOM statistics still indicate a high-demand market and new condo development is helping to address that demand, while there is barely any new-house construction in San Francisco. TIC sales have also been dwindling in recent years, impacted by several legal, political and financing issues.
We suggest that you check out our full report on 10 Factors behind the Market in order to learn more about San Francisco real estate influences, including employment and its effect on the market. If you have any questions, give me a call!
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