San Francisco Home Prices and Market Conditions

APRIL 2023

The Market Continues to Recover

But with Many Dynamics at Play

"Buyers have accepted 6% mortgage rates as the new normal."

- Compass CEO Robert Reffkin, CNBC

Watch CNBC segment

Compass CEO Robert Reffkin's Thoughts On the Spring Market:

Buyers have accepted 6% mortgage rates as the new normal.
Mortgage purchase applications have increased 8 out of the past 10 weeks.
There is a lack of inventory, however, inventory is 60% higher compared to this time last year.
Buyer demand continues to be strong, with home prices up in both March and February sequentially.
Open house traffic has picked up dramatically, with multiple offer situations becoming more common in markets across the country.

Buyer demand continues to rebound from the depths of the mid-winter slowdown: The number and percentage of listing going into contract, and overbidding continue to climb, and days-on-market to drop as the spring selling season gained traction. Buyers generally shrugged off the local banking crisis, the main effect of which, so far, has been a significant drop in interest rates in the 4 weeks after SVB collapsed and First Republic first came under pressure.

The number of new listings coming on the market continues to be low, as many potential sellers hold off from listing their homes due to the doubling of interest rates since early 2022: This constitiutes a huge factor in the market dynamics and is undoubtedly holding back sales activity.

Luxury home sales have been hit harder since the market correction began in mid-2022, though they too have been rebounding in 2023.

April, May and June sales volumes are commonly among the highest of the year, and this is especially true for luxury homes sales.

Report created in good faith with data from sources deemed reliable, but may contain errors and subject to revision. All numbers approximate, and may change with late-reported activity.

Though conditions have improved considerably, the market remains significantly weaker on a year-over-year basis, and across the Bay Area, median home sales prices have declined.

However, it’s worth remembering that the market in Q1 2022 was severely overheated, and approaching the peak of a historic, 10-year boom. This will distort many year-over-year comparisions.