April Real Estate Market Reports

Q1 2024 Reports 

1. San Francisco Residential Market Report
2. San Francisco 2-4 Unit Builiding 
3. San Francisco 5+ Unit 

What a difference a year makes! Since we turned the page on 2023 and entered into 2024 the San Francisco/Marin market has substantially picked up. There are more transactions this year compared to last year. Properties are going into contract quicker. Multiple offers are more frequent. Why is this? The simple answer is because a down year usually there is an uptick. Last year the general sentiment was to wait to buy. Then this year came and all those buyer who were waiting still did not have a place and the buyer attitude changes. For the sellers, the key to harnessing the full potential of the current market conditions remains pricing. Properly prepared and presented properties with appropriate pricing sell well and quickly. Overpriced properties struggle. I expect the Spring selling season to remain active. The Summer will have a bit of a slowdown and if/when the rates are lowered I expect the San Francisco/Marin market to accelerate. 

Q2 May See the Hottest Market  Since the Peak of the Pandemic Boom

Macroeconomic Conditions

In the 8 weeks through early April, the weekly average, 30-year conforming-loan interest rate has oscillated between 6.74% and 6.94%:  Up from January, but still well down from last fall. In the last month, the S&P 500 & Nasdaq stock market indices continued to hit new all-time highs, with substantial effects on household wealth. After the big jump in December-January, consumer confidence is at its highest point in almost 3 years. Monthly inflation rates have remained stable since October, ranging from 3.1% to 3.3%: Higher than the Fed’s 2% goal, but reductions in its benchmark rate later this year are still commonly expected. 

 1. Complete San Francisco Residential Market report here:

 

2. The San Francisco Smaller Apartment Building Market
April 2024 Report
2-4 Unit Multi-Family Buildings

Q1 2024 sales were up by about 25% from Q1 2023. Q2 typically sees a significant increase in sales from Q1. 

 

3. The San Francisco Apartment building market

April 2024 Multi - Family Market Report for Residential 5+ Unit Buildings

Q1 saw low sales volume, as is typical. Q2 should see a significant bump in sales, based on listings pending-sale in early April.

 

-> Click here for More Bay Area Market reports by COMPASS analyst, Patrick Carlisle. 

 

April 11, 2024: Yesterday's inflation release:  Overall inflation ticked up in March to 3.5% from 3.2% in February.  The "Core" rate remained at 3.8%. The Fed's target rate is 2%. 

 

 

The discussion regarding the Fed's expected benchmark rate cuts this year has markedly changed in recent weeks. From today's WSJ:  "The latest data [regarding inflation] raises two different possibilities. One is that the Fed's expectation that inflation continues to move lower but in an uneven and 'bumpy' fashion is still intact...In such a scenario, a delayed and slower pace of rate cuts is still possible this year. A second possibility is that inflation...is getting stuck at a level closer to 3%. Without evidence that the economy is slowing more notably, that could scrap the case for cuts altogether." That is a big change from the recent commonly held expectation of 3 cuts this year - but if CPI swings lower suddenly, the outlook could change very quickly.

 

Another article in the WSJ talks about another big issue  beyond interest rates in housing affordability, not just for buyers, but for existing owners, The Hidden Costs of Homeownership Are Skyrocketing:  "Rising insurance premiums, property taxes and maintenance costs show little sign of abating." Of course, how hard specific issues are hitting any particular market can vary enormously. As we know, some regions prone to natural disasters are seeing stupendous increases in insurance premiums. But virtually all markets have seen enormous home-price appreciation since 2019, with parallel effects on property taxes (except in CA where Prop 13 limits these for existing owners). And inflation has deeply affected the costs of maintenance and repairs. This is like a triple-whammy hitting the real costs of buying and owning, and one big reason why the market is being more driven by more affluent home buyers now.