San Francisco Association of Realtors March 2018 Report
As we continue into the spring market, the inventory continues to be limited in both San Francisco and Silicon Valley. Prices are up over 25% year-over-year for a single family home in both areas. And inventory is down 17.2% in Silicon Valley and 29.6% in San Francisco. Despite slightly rising interest rates, the demand still outpaces supply.
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New residential real estate activity has been relatively slow in the first quarter of 2018, yet housing is proving its resiliency in a consistently improving economy. Some markets have had increases in signed contracts, but the vast majority of the nation continues to experience fewer closed sales and lower inventory compared to last year at this time. Despite there being fewer homes for sale, buyer demand has remained strong enough to keep prices on the rise, which should continue for the foreseeable future.
New Listings were down 24.9 percent for single family homes and 15.5 percent for Condo/TIC/Coop properties. Pending Sales increased 1.4 percent for single family homes and 7.2 percent for Condo/TIC/Coop properties. The Median Sales Price was up 25.0 percent to $1,687,500 for single family homes and 9.9 percent to $1,250,000 for Condo/TIC/Coop properties.
Months Supply of Inventory decreased 28.6 percent for single family units and 29.6 percent for Condo/TIC/Coop units.
The Federal Reserve raised its key short-term interest rate by .25 percent in March, citing concerns about inflation. It is the sixth rate increase by the Fed since December 2015, and at least two more rate increases are expected this year. Borrowing money will be more expensive, particularly for home equity loans, credit cards and adjustable rate mortgages, but rising wages and a low national unemployment rate that has been at 4.1 percent for five months in a row would seem to indicate that we are prepared for this. And although mortgage rates have risen to their highest point in four years, they have been quite low for several years.