The San Francisco Association of Realtors (SFAR) just sent out it’s latest report tonight, chock-a-block with facts ‘n stats. Everyone’s got a different idea of what info is important. Here is what SFAR has to tell us. They tend towards the happy-talk route, but caution against too much optimism:
Falling inventory levels and strong sales activity in December, 2009, helped to drive continued improvement in San Francisco’s housing market. The median single-family home sales price increased for a third consecutive month in December reaching $755,608. That represents a 7.9 percent increase from December, 2008. The report attributes the improved market conditions to a drop off in foreclosure sales and a growing proportion of sales in higher priced neighborhoods.
As expected, closed and pending sales activity dipped during December as a result of seasonal patterns. But despite the slowdown, closed and pending single-family sales activity that month outpaced similar activity in December of both 2008 and 2007.
According to the report, the single-family months of supply inventory fell to 3 months in December 2009 from 5.8 months in December 2008. The condominium months of supply inventory fared less well dropping to 4 months from 7.2 months during the same period. With inventory levels falling, Lee anticipates that the price increases seen in recent months will continue and possibly intensify.
The report observes that the condominium market also seems to have turned a corner, as the median sales price increased by 7.6 percent to $672,590 in December. It was the first year-over-year increase since July 2008.
The reduction in asking prices, mortgage rates of less than or near 5 percent and federal tax incentives have increased housing affordability and attracted buyers to the condominium market. However, sellers of higher-priced properties have benefitted less from incentives as sales are closed only after significant negotiations from original asking prices.
A number of factors could delay the further strengthening of San Francisco’s housing market. Principal among these would be an increase in distressed properties that would add to the for sale inventory and put downward pressure on prices and the anticipated increase in mortgage rates that could rein in home buying activity. But the outlook is increasingly positive and it believes that if these eventualities would happen, it would only be a bump in the road to long term growth in the San Francisco market.