SAN FRANCISCO—San Francisco condominium prices increased sharply in August, marking a 4% jump from the previous month, according to The Mark Company. The pricing stands at a record $1,340 per square foot, representing an increase of 20% compared with the same month last year.
Erin Kennelly, director of research, The Mark Company, tells GlobeSt.com: “Appreciation is usually lackluster in August, but this year a strong local economy has combined with limited new condominium options to drive prices to new highs. Although there were 11 different developments selling new condominiums in San Francisco last month, five of those developments only have a handful of units remaining, and two of them are outside of the urban core and may not appeal to buyers looking for a centrally located urban home."
There are now approximately 701 new condominiums for sale in San Francisco, representing a decrease of 8% compared to the previous month, but an increase of 82% compared to one year ago. Inventory levels remain much lower than the previous peak of nearly 3,000 units available in 2007.
"Buyers looking for new condominiums near transit and jobs in San Francisco only have four choices: Fulton 555, Lumina, Rockwell and Seventy2 Townsend. With so many buyers competing for so few options, it is no surprise that new homes are selling quickly and selling for higher and higher prices,” says Kennelly.
Average prices for resale condominiums decreased by 5% last month, but remain 11% higher than one year ago. There are currently 196 active resale condominium listings in San Francisco, representing only one month of inventory at the current pace of sales, with six months representing the balance between a buyer's and a seller's market.
“New construction absorption, which we consider an accurate reflection of buyer demand, was approximately 60 new condominiums units, slightly lower than the average of 79 units per month over the past year,” said Kennelly. “However, it is not unusual to see a slowdown in absorption in the late summer. Absorption last month was 39% lower than the previous month, and 12% less than the same month one year ago.”
The Condominium Pricing Index, part of the firm's monthly trend sheet, is based on recent sales data and uses a proprietary quantitative method to measure trends in market demand. It tracks the value of a new construction condominium without the volatility of inventory changes. The Mark Company Penthouse Pricing Index, which applies the same methodology to a new 30th floor, 2,000-square-foot condominium, was $2,301 per square foot in August, increasing 4% from the previous month and 20% higher year-over-year.
Condominium prices increased in downtown Los Angeles and decreased in downtown San Diego when compared to the previous month, however, they maintained year-over-year price increases.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
