Mansion Global

San Francisco Home Prices Wobble in First Quarter

Luxury has plateaued or dipped in parts of the city

Save

San Francisco’s high-end homes have shown clear signs of cooling from a price peak in 2015.

Spondylolithesis / Getty Images
San Francisco’s high-end homes have shown clear signs of cooling from a price peak in 2015.
Spondylolithesis / Getty Images

Luxury home prices have plateaued or slightly dipped in San Francisco, while more affordable parts of the market continue to appreciate, according to a new report by Paragon Real Estate.

San Francisco’s median house price fell to $1.3 million in the first quarter, down from $1.35 million at the end of 2016; while the median condo price rose to $1.138 million compared to $1.078 at the end of last year, according to Paragon’s April report published on Wednesday. The brokerage noted that recent news of prices falling in San Francisco are overblown.

More:Click to Read More About Homes and Market News from San Francisco

"We are not seeing it, neither on the ground in the hurly burly of buyers and sellers making deals, nor in the year-over-year quarterly statistics of supply and demand," wrote Patrick Carlisle, chief market analyst, in the report.

The company's analysis suggested taking lightly the wobbles in median price from one quarter to the next, especially lulls in the first quarter, when the market is typically slower than in the spring and summer months.


Mansion Global is now on LinkedIn. Join the discussion.

"Monthly data is often gravely deficient as an indicator, fluctuating up and down without much meaningfulness due to a number of factors," Carlisle wrote. "January and February are particularly bad months to draw conclusions from: The lowest sales volumes of the year, reflecting deals negotiated during the December-January market doldrums."

The report pointed to the ultra-luxe neighborhood of Marina, where a few house sales each quarter will send the median price yo-yoing irrespective of general market trends.

With that said, San Francisco’s high-end homes have shown clear signs of cooling from a price peak in 2015, particularly among condos, where a boom in development has dumped more units into the market.

More:Read San Francisco Victorian Gets ‘Soft Modern’ Makeover

Evidence of cooling includes the number of unsold homes withdrawn from the market and declining median price per square foot.

Sellers pulled a total of 176 luxury condo listings from the market in 2016, more than in any year during the market collapse between 2009-11, according to the report. Last year, unsold houses also ticked up to bottom-of-the-market years, with 85 listings pulled or expired.

Average price per square foot has also fallen in the luxury sector. Paragon pulled out figures for the Noe, Eureka and Cole valleys, where sales price was greater than $1.5 million. Price per square foot in that district fell 3% from 2015 to 2016, to around $1,040 a foot.