A recent housing market analysis document regarding home prices in the San Francisco county area showed a median sale price of slightly less than $1.5 million, which translates into more than $1,200 for every square foot of property purchased. That represents an increase of more than seven and a half percent over the past four months and nearly five percent over the last three years’ worth of prices.
Supply isn’t greatly outstripping demand, either, which may force home prices to continue appreciating. Some 628 new properties came on market last month, and 618 addresses were sold during the same time period. That means that first time homebuyers, as well as those who are currently in the market for a more affordable place to live, may end up struggling as they try to find a place that’s within their price range.
Some are interpreting these numbers to mean even worse things for individual buyers than they might have originally seen. For instance, the number of homes sold every month has dropped by slightly less than a quarter in the last fiscal year. While some have suggested that this simply indicates pandemic-era purchasing patterns, others are under the impression that it could indicate that the median price levels have finally gotten away from the average consumer.
Learning More About an Area Before Buying
Consumers are increasingly turning to statistics whenever they plan on purchasing a home in a new neighborhood. While the prevailing wisdom was that high property values indicated a good place to live, this no longer seems to be the way that many potential buyers think. Excessively high property values have become associated with a new type of pseudo urban poverty where people purchase homes that they simply cannot afford and continue to buckle under the weight of them in spite of the fact that they should be making enough to support themselves.
Vehicular dependence on slower streets has also become a major issue for many buyers. Those who want to live in an area that gives them the freedom to take public transportation in whatever form is available may be expected to pay for this privilege. While that might be understandable in terms of the taxes that fund the operation of transit systems, it’s increasingly instead in the form of greater upfront costs that do little to actually benefit the city as a whole.
It’s likely that when people find that these issues are becoming a problem in a place that they might have otherwise purchased a home in, they may start to look elsewhere. For some, that might mean completely leaving the San Francisco metro while others might instead start to look for hidden gems in the immediate area. Those with properties in the region may put them up for sale, though developers are unlikely to show any significant interest.
How Buyers are Adapting to Changing Conditions
The sudden rapid growth of sites like Know Your City and various apps designed to point out various facts about specific areas seems to suggest that people are indeed shopping around much more than they have in the past. Considering the current labor situation in San Francisco, there’s a strong possibility that this could eventually cause greater shortages as people flee to suburban areas to escape higher costs that they can no longer cope with.
On the other hand, data collected by these services also seems to suggest a future downward trend. As it becomes increasingly difficult for all both the most well-financed to buy property, people may simply refuse to purchase any existing homes or condominium units at all. Assuming that this does indeed happen, prices may start to drop drastically in order to generate increased demand.
That would reset the cycle to some degree, and could even make the average costs of certain other products and services a little more affordable in the notoriously expensive bay area.