Holy Inventory Batman!
Condos are having a record breaking month. The number of new listings hasn’t been this high since the Great Recession, and there were a whopping 1185 active listings during the month of July. We haven’t seen that much inventory in 10 years. While the inventory is selling gradually, the rate at which new condos are coming on the market is outpacing sales. We thought June was a flood of inventory, but that was because we hadn’t met July.

The Rise of the City Backyard
Condos that offer some of the same perks of a single family home are selling more quickly. Those located in smaller buildings with backyards, larger square footage, and 3 or more bedrooms are doing particularly well. Condos with 3 bedrooms are experiencing the shortest number of days on market (DOM). Condos in high rises are spending more time on the market. With no outdoor space or small balconies, as well as close proximity to anywhere from dozens to hundreds of other units, these buildings are not making too many friends during a pandemic.

SOMA, for example—which had already plateaued in value for the last 2 years—is now being hit hard by the change in the marketplace. The median sales price (MSP) for a 2 bedroom condo in SOMA was $883k in July 2020, down 23.3% compared to July 2019.

Single Family Homes
Single family homes have also seen high inventory. In July, there were 604 active listings, which is the highest number since 2011. The months supply of inventory (MSI) is bouncing around 4, which is widely considered a balanced market. San Francisco is used to an MSI of 2 or less creating the competitive, sellers market we know so well. Even “transitional neighborhoods” are struggling. The Bayview, for example, had an MSP of $728,440 in July 2020—a 23% drop compared to $950k in July 2019. This is the lowest prices have been in years.

As with so many aspects of 2020, we will have to wait and see how the market shapes up. For the time being, buyers looking to get into the city may have found a spot of sunshine on an otherwise tough year.

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