San Francisco’s Median Home Price Fell for the First Time in a Decade in 2022
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Median sales prices in San Francisco fell 1% year over year to $1.78 million in 2022, the first decline in over a decade, according to a report Monday from Compass.
The tech hub’s property market peaked in the second quarter of last year, capping a 10-year upcycle supercharged at its end by the pandemic boom, said Patrick Carlisle, chief market analyst at Compass San Francisco Bay Area.
At its height in the second quarter, the median sales price surpassed $2 million. But rising inflation and interest rates, combined with uncertainties in the financial markets, considerably cooled the market in the second half of the year.
In the fourth quarter, about 57% of homes sold for above their asking prices, compared to 81% in the same period of 2021. That number was 87% in the second quarter, when the market peaked, according to the report.
The market cooldown was especially evident in the luxury segment, defined as homes priced at least $3 million or condos above $2 million.
“When the pandemic boom first started off, it was affluent buyers purchasing expensive homes that led the market and initially supercharged demand,” Mr. Carlisle said. “Affluent buyers are now holding off more than buyers in the general market, a complete flip of the dynamics that began the pandemic boom.”
During the fourth quarter, there were only 77 single-family homes in San Francisco that sold for $3 million or higher, more than halving the 160 sales in the fourth quarter of 2021. During the second quarter, there were 166 luxury sales of houses, according to the report.
Luxury buyers tend to have much more wealth tied up in financial markets. “With all the volatility in those markets they have pulled back as they await more clarity in economic conditions,” Mr. Carlisle said. “Which is not to say that some very expensive homes aren’t selling—but the numbers of sales have plunged from last year.”
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