What will 2015 bring for the San Francisco real estate market? A new report from Paragon Real Estate shows that we may be only partway through the current boom, if past booms are any indication of what this one will be like. The market has now been on the rise for three years and has gone up approximately 45 percent since the start of 2011, when the current boom began. During the previous three real estate market cycles, prices soared as high as 100 percent from the start of the cycle to the end, although the 2002-2007 boom saw price increases of just 57 percent. Previous booms also generally lasted five to six years, and we are only three years into this one.
Despite the wild price jumps of the past few years, there are still neighborhoods where houses cost less than $1 million. The Excelsior, the recently crowned Curbed Cup neighborhood of the year, led the pack of affordable neighborhoods along with nearby Silver Terrace and Visitacion Valley, with 196 sales below $1 million during 2014. Parkside came in second, with 148 six-figure sales, followed by the area including Crocker Amazon, Mission Terrace, and the Outer Mission.
At the other end of the market, with homes selling for $2 million or above, the southern region of the city—including Noe, Eureka, and Cole valleys, as well as Clarendon Heights and Glen Park—led the pack with 137 sales of $2 million or more. The northern side of the city covering the neighborhoods of Pacific Heights, Presidio Heights, the Marina, and Cow Hollow finished the year with 111 sales over $2 million, 37 of which were above $5 million.
At the start of 2015, both interest rates and inventory remain low, with less than a month and a half's supply of inventory on offer as of November (anything less than two months of inventory indicates a very strong seller's market). This means that 2015 could be another heady year for San Francisco real estate.
· January 2015: 3 Years Into the Recovery [Paragon Real Estate]
· The Curbed Cup Neighborhood Of The Year Is ... the Excelsior! [Curbed SF]