The first-quarter Metrostudy data for the San Francisco housing market indicates the Bay Area is suffering from lack of affordable homes coupled with a decrease in both new and existing home sales. Overall home closing decreased dramatically between 1Q13 and 1Q14 from 12,422 to 10,330, a 16.8 percent decrease in sales. The market saw a peak in overall sales in the second quarter of 2013 reaching 15,878, but new-home sales’ best quarter occurred in 4Q13 with 918 sales. New-home closings in the first quarter were 783, a 14.7 percent decrease from the previous quarter and a minimal 1.5 percent decrease from 1Q13.
The overall closing price median in the San Francisco housing market has skyrocketed in a single year, jumping from $460,000 to $594,300. A 29 percent increase to nearly $600,000 for both new and existing homes prices the entry-level buyer almost completely. New homes have experienced an even more significant increase from $530,600 to $730,100 in 1Q14, nearly a 36 percent increase in a single year. Despite this jump in overall price, the price per square foot has not seen such an incredible spike, which dropped from $397 per square foot in the fourth-quarter to $347.
Quarterly starts are down in the Bay Area reaching 703 in the first-quarter down from 849 in the fourth and 980 is 1Q13. Annual starts came in at 5,477 for the market, which is up from a year ago when starts were 3,595 in 1Q13 speaking to hopeful pick-up in sales in the summer and fall seasons. Vacant Developed Lot inventory was lower in the first-quarter than 1Q13 with 4,967 down from 5,877. With this decrease in lots, months supply of housing in the market increased to 18.8 months in the first-quarter, up from 10.3 in 1Q13. Based on the price appreciation in the market, it is uncertain whether supply will dwindle in 2014.
Learn more about markets featured in this article: San Francisco, CA.