As I write this, it is January 27, 2015, and inventory in San Francisco seems very low. Prices seem high. Everything is relative, but relative to what?
Is now a good time to buy? How is the market? Will more property come on the market in the Spring? These are frequently asked questions.
The market in San Francisco always seems to be unprecedented. Wait until the spring and there will be more listings, but there will also be more serious buyers at that time. “Choice fatigue” is a concept active in describing the consumer who shops in a place like a supermarket. Supposedly consumers respond well when there are fewer choices. But in real estate, buyers (especially first-time) will have a very difficult time deciding to buy a property if there is only one option that meets their functional and aesthetic requirements. It’s like one of those game shows where you can either elect to keep the prize in hand, or risk losing it and go for the prize behind the curtain. If a person has not seen every possible type of property in the area, they may feel the need to become more educated before making a decision. During that time, the cost of their ideal property may change. Also, it is unlikely they will see “another” of the same property come up soon.
I wanted to check the history of inventory to determine whether the amount of inventory was similar to how it has been in the past. I checked only the SF MLS history for condos no lofts, TICs or stock cooperatives) in districts 5-9, the Northern and Eastern areas of the city during the period of January 2013 through to today. As of the date of this article, there are 79 such condos showing as sold since January 1, and 142 active. Here are the comparisons of 2014 and 2013 by month:
sold 2014 2013
January 131 110
February 160 124
March 202 193
April 243 214
May 216 258
June 208 189
July 191 247
August 198 205
September 160 158
October 229 240
November 146 194
December 158 169
So in both years, inventory does increase after January, and decreases in November. The inventory at some point does (or almost does) double from the lowest point. But if there is only one property you are interested in during the time of lowest inventory, that means there is a good chance you will have only two properties of interest once inventory doubles. I don’t know if that’s worth waiting for.
Maybe it is a bleak picture, but the point I am making is this:
To buy a property in San Francisco, a person must be very motivated.