California + Bay Area + Apartments | December 7, 2018

San Francisco Market Experiences Dramatic Changes

Dramatic changes abound in the San Francisco Bay Area real estate market, according to new research by Compass. Chief among them are declining and sometimes negative year-over-year residential appreciation rates, comparative values between San Francisco and other cities, declines in sales volumes and overbidding, increases in price reductions and listings pulled off the market.

Compass Chief Market Analyst Patrick Carlisle notes they are hesitant to make too much of a single month’s or a few months’ data. That’s because short-term fluctuations in median sales prices and other market statistics are not uncommon and don’t always give definitive perspective as to where the market is heading on a longer-term basis. He writes, “Still, many of the changes seen over recent months are substantial – and none more so than the sudden plunge in year-over-year median price appreciation rates. A number of counties plummeted into negative territory in November, and the others saw drastic declines.”

Key findings include:
– Listings vs. Sales: Though not especially high by historical standards, the overall supply of listings on the market has been appreciably increasing this autumn, to its highest level in four years. But sales volume in September-November 2018 was down about 12.5% on a year-over-year basis.
– Overbidding & Under-Bidding: As demand declines and inventory increases, the competition between buyers, and the need to overbid asking price to win the sale, subsides. Carlisle notes, seasonality plays a big role in this statistic, and there are still many homes selling for over asking price, but the overall average Bay Area sales-price-to-original-list-price percentage has dropped below asking price – by a smidge – for the first time since January 2017.
– The dramatic increase in price reductions is a stark indicator of changes in the supply and demand dynamic. October saw a massive spike, but September and November numbers were also much higher than in the previous six years.

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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

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