There have been plenty of questions flying around lately about whether San Francisco's madhouse real estate market is beginning to cool, and now Paragon Real Estate has weighed in with a resounding "yes"—at least in the luxury sector. According to Paragon, lower and mid-priced homes "have continued to remain solidly in 'seller's market territory.'" However, "in the luxury home segment, the dynamic between buyers and sellers has fundamentally shifted." So, first of all, what is the luxury market? In San Francisco, it's single family homes above $2 million and condos above $1.5 million. Right now, there is enough inventory on the market in both of those categories to qualify as a buyer's market.
Paragon points to a number of reasons for the shift: the volatility in the stock market of late August, high prices pushing buyers to look outside of the city, and a growing supply of newly-built luxury condos. That doesn't mean that the market is crashing, and the median home price still sits at $1.2 million. But what it does mean is that there are more luxury homes on the market now than at any other time in the past few years, giving buyers who are usually scrambling for scarce properties more options. The biggest question is whether this is a brief blip—especially given that the stock market has calmed down a bit—or a new reality in San Francisco real estate? The market opened on a down note this morning.
· Luxury Home Market Cools Down [Paragon Real Estate]