That word rings in the ears of anyone purchasing a home in San Francisco. The affordability index measures the percentage of families who can afford a median-priced, single-family home in San Francisco. Of the 6 Bay Area counties, San Francisco’s index of 12% is the lowest. Shockingly, with 20% down a buyer needs an income of $290,630 to qualify for the loan.
Despite the already low affordability index, appreciation continues. Median Sales Price (MSP) of single-family homes is up 7.03% since quarter 3 of 2016. Increasing demand puts pressure on dwindling supply: new listings of single-family homes have dropped 22.42% since quarter 3 of 2012. These listings are on the market for 14 days; they sell for an average of 115.4% of list price, near the city’s all-time high.
What About Condos?
Condominiums tell a similar story with more subdued language. The rise in MSP is higher than that of single-family homes—up 11.37% since quarter 3 of 2016. However, the demand is less frantic. Condos are on the market for 22 days, and the percent of list price received hovers at 102.55%. The new condominium projects going up around the city, which are not part of the SFAR database, affect these numbers.
The Importance of the Listing Price
* With 1 or more price change over the course of a listing, the Days on Market can increase by 2-3 times.
* If a property is not properly priced out of the gate, it can reduce the seller’s gain by 10% or more.