Redfin Report: San Francisco Home Prices Fell for the First Time in Four Years in March
Home prices in the San Francisco Bay Area fell by 1.8 percent year over year in March, their first such drop in four years, according to Redfin (www.redfin.com), the next-generation real estate brokerage.
"For years San Francisco has been one of if not the most competitive markets in the country," said Redfin chief economist Nela Richardson. "Now we are seeing this white-hot market start to cool and contract. The share of Redfin offers facing competition dropped to 77 percent in March from 94 percent last year. This suggests that the price drop is not about inventory, it's about buyers fed up with high Bay Area prices and crazy competition."
Could the price decline in San Francisco be a preview of what's to come in other overheated markets such as Seattle and Denver? Pressure has been mounting in markets across the country with month after month of price growth, high competition and chronically low inventory.
Nationwide, prices were up 4.7 percent year over year in March, but sales grew only 1 percent, the smallest increase in 16 months. Despite 6.8 percent growth in new listings, overall inventory fell 3.2 percent, an indication that inventory is not keeping up with buyer demand.
"In 2015, sales grew 7 percent nationally, but there simply aren't enough homes for sale to maintain such a torrid pace again this year," said Richardson. "No matter how high homebuyer demand is, it takes two to tango, and many sellers are sitting this year out."
Nationally, demand has outpaced supply since early 2015, when inventory began to drop sharply in many metro areas and home sales rose even faster. In hot markets like Seattle, Minneapolis and Portland, Ore., which saw double-digit year-over-year sales growth in 2015, sales are now falling as a result of steep inventory declines.
Low inventory coupled with strong buyer demand continues to drive competition. The Redfin home tour index reached its highest level for the third month straight, and offers surged to their highest level in almost three years. Nearly a third of new listings sold in less than two weeks and 21.7 percent sold above the asking price.
Without a significant boost in new listings nationally, competition will remain strong and sales may stagnate or decline in many markets as we head into the busiest season in the real estate cycle.
To read the full report, complete with market-by-market data and charts, please visit the following link: https://www.redfin.com/blog/2016/04/march-national-housing-market-tracker.html.
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Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the customer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the industry's most accurate home-value estimate, the Redfin Estimate. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commission. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $31 billion in home sales, and saved customers more than $335 million in fees, and counting.
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