An interesting report on San Francisco real estate released this week from Rosen Consulting Group reveals improvements to housing affordability, fueled by low mortgage rates, reductions in asking prices and incentives aimed at first-time home buyers helped to drive the boost in home sales activity in the second half of 2009 and stabilize prices at the low and middle-end of the housing market a – trend which has continued into the early part of 2010.
Among the report’s highlights:
- In January, the single-family median home sales price reached $720,000, an 18 percent increase from January 2009, the apparent trough in the median sales price during the recent down cycle.
- Sales at the high end of the market continued to be dominated by all cash or large down payment transactions, according to John Lee, president of the San Francisco Association of REALTORS®. “The sharp decline in household net worth across all income levels and the devaluation of many passive investments as a result of the most recent recession has led to more conservative investing even among affluent households,” he says.
- The reduction in asking prices also has resulted in a rise in condominium sales. A total of 113 condominium sales were completed during the month of January in comparison to 78 sales in January of last year while pending sales for the month followed a similar pattern reaching 177 sale contracts signed from 98 signed the same month last year.
- At the current sales rate, the months of supply inventory for single-family homes dropped to 3.5 months from 5.8 months while the months of supply inventory for condominiums show a more substantial decline during this time, dropping to 4.1 months from 9.5 months in January 2009. Rosen Consulting Group believes this to be another positive sign in the market.
- “The San Francisco housing market is expected to continue a steady recovery through the first half of 2010,” says Lee. But he notes that a number of risks could delay the market’s full recovery. Rising mortgage rates, as well as stricter provisions for FHA mortgages, which have become increasingly popular in recent quarters, could potentially place a damper on the market’s current upswing. And while the employment outlook has improved, as indicated by the moderation in the rate of payroll cuts, as well as the recent drop in the unemployment rate, a prolonged period of job losses and furloughs could force the growing number of distressed homeowners into foreclosure, further restraining home price appreciation.
Click here to read the entire report: