One large Bay Area real estate firm expects San Francisco home and condo price appreciation to slow in the coming years, particularly in 2018. This firm, Pacific Union, also forecasts annual existing home sales growth of 1 or 2 percent during both 2016 and 2017, with some supply relief upcoming for the condo market.

  • Home and condo price appreciation in San Francisco County will slow in 2018.
  • District 9 is by far the strongest San Francisco County submarket for condo resales.
  • The county will see several waves of condo unit deliveries in the coming years.

One large Bay Area real estate firm expects San Francisco home and condo price appreciation to slow in the coming years, particularly in 2018.

Pacific Union forecasts annual existing home sales growth of 1 or 2 percent during both 2016 and 2017, with some supply relief upcoming for the condo market.

A slowing in price appreciation would suggest that double-digit, year-over-year gains would be a thing of the past. According to a fourth quarter report from the firm, home values for the entire San Francisco County real estate market were recently up by 6.9 percent on a year-over-year basis. The median prices of a single-family home and condo are relatively comparable at $1.2 million and $1.1 million, respectively.

If a 1 percent to 2 percent rise in San Francisco real estate activity occurs during 2016 that will mean that roughly 5,600 to 5,700 properties sell. Expect a larger percentage of single-family and condo sales to be prices in the $1 million to $3 million range.

Last year, nearly 64 percent of all single family homes sold during the fourth quarter were valued between this range. Of all condo resales, nearly 54 percent were priced between $1 million and $2 million.

Another prediction from Pacific Union, foreign investors will still represent a healthy part of the market, most notably Chinese buyers.

The County’s inventory of resales was noticeably low entering this year, with 0.7 months of single-family supply and 0.8 months of condo inventory. However, some supply relief is on the way for the condo sector, as more than 1,300 units are under construction in San Francisco.

Additionally, another 6,750 condos are either approved, under review or in the conceptual stage.

Most active San Francisco districts

Part of Pacific Union’s report focused on activity within the 10 districts that comprise SF County.

During the fourth quarter, district 10 accounted for the most single-family sales, with 116. This district, which had a median sales price of $844,000, includes the neighborhoods of Bayview, Candlestick Point, Hunters Point and Mission Terrace.

Districts 2 and 4 contributed 108 and 104 single-family sales, respectively. Including the neighborhoods of Sunset, Parkside and Golden Gate Heights, district 2 had a median price of $1.16 million. District 4’s median price is at more than $1.4 million. Balboa Terrace, Diamond Heights and Fort Hill comprise some of its submarkets.

District 9 contributed the most condo sales of the 10 districts, with 192. The area includes the Bernal Heights, Inner Mission, Mission Bay, South of Market and Potrero Hill neighborhoods and had a median price sales of $1.14 million during the fourth quarter.

Email Erik Pisor

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