A new trend in SF real estate: Price reductions, especially in the high-end market

November 15 2016
November 15 2016

San Francisco real estate prices are still astronomical, but a new report reveals glimmers of an emerging trend that indicates the market is returning to earth.

An increasing number of landlords and sellers are cutting prices, according to the study from real estate website Trulia.

San Francisco saw the highest percentage increase of for-sale listings with price reductions in the country this year. The number of price cuts on properties nudged up 3 percentage points to 8 percent this year from 5 percent last year. By comparison, the national average was a .5 percent increase.

{What's more, the number of price reductions for rental listings in the city increased 7.77 percentage points to 21.31 percent this year from 13.55 percent of rental listings last year.]

 

These numbers might seem small but realtors are noticing a shift in the market. "Price reductions are occuring with slightly increased frequency as sellers acclimate to a mildly adjusted market," said Rob Levy

Trulia didn't break down which types of properties are most commonly experiencing cuts but brokers says the trend is relevant in the high-end market on properties valued over $3 million and on new-construction condos.

 

 

San Francisco saw the highest percentage increase of for-sale listings with price reductions in the country with a 3 percent increase between October 2015 and September 2016. By comparison, the national average was .52 percent.

What's more, the number of price reductions for rental listings in the city increased 7.77 percentage points to 21.31 percent this year from 13.55 percent of rental listings last year.

in the number of listings  the number of listings redu

 

By comparison the number of price reductions

found that in the last 12 months an increasing number of landlords and sellers are cutting prices.

 

looked at a year's worth of pricing data in the renal and sales markets and found

 

Among the discounted properties currently listed by brokers: "Over $300K Price Reduction!!! for a Noe Valley "LEED Certified build with top-of-the-line finishes" at 437 Duncan St. now listed for $4.099 million; "$6oo,000 + price reduction" for a Pacific Heights masnion at 2008 Vallejo St. now listed for $5.2 million; TK. And the list goes on.

Despite the tantalizing discounts, bargains are few. Most of the reductions are coming off price tags that were too high in the first place, brokers said.

 

Mark

 

I think we saw an adjustment from 2015 to 2016 and the question at large is, is it still adjusting. If you compare what was selling in 2015 and what's selling now in 2016, yes it appears to be more of a deal. I think it signals a more balanced market. The idfference between today's market and 2008's market, things are still selling. Whereas in 2008 it just dried up entirely.

 

I ran a comp search. To see what the overbidding situation is. At the beginning of the year, Noe Valely and Distrtict 5 is my specialty. We were seeing the overbidding across the board at about 10 percent in January, and now we're seeing it at about 6 percent.

Q4 closings

Properties over $2.5

Properties over $2.5 and that was 3 percent

 

Single families over 2.5 million in District 5: 3 percent over bidding for Q4

 

Single families over 2.5 million in District 5:

 

We're pricing closer to the seller's expectations or whast we believe thte market value is. The problem is that sometimes the seller's expectations are based on last year's prices

Rarely does an agent overprice on purpose. They saw the house next door sell for a higher price and they hope the market will still bear that price.

 

I think the surge of the towers and new construction has definitely impacted the resale market. I think we're finding places like Noe wehre they're not building new single family homes it's a little more insulated.

 

Luxury super high end is feeling more of the economic.

 

Things under $2.5 million

 

 

By Amy GraffPublished 9:02 am, Wednesday, November 2, 2016

 


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