San Francisco real estate is often in the news for how outrageously expensive it is. But a look at the luxury condominium market shows that there are reasons homebuyers should have some hope. The number of existing premium condominiums for sale in the city hit an all-time high in April and units that did change hands left the market at prices below what sellers had originally sought, according to a new market report. Also, there were 78 condominiums on sale for $2 million and above on the last day of April compared with 52 a year earlier, according to Paragon Real Estate Group’s report, which doesn’t include new developments. MORE: Could the San Francisco Real Estate Market Finally Be Slowing Down? Granted, the report also shows that the median price per square foot for luxury condos in San Francisco was $1,410 in April, the highest it’s ever been and 14% more than in the same month in 2015. But the higher inventory is good news for would-be buyers, as it not only means a deeper pool of properties to choose from but also more room to negotiate. “Nothing pushes prices up like buyers competing for a limited number of new listings. That competition has significantly dropped or, for many listings, disappeared,” Patrick Carlisle, chief market analyst at Paragon said. The increased supply is being fueled particularly by new construction, such as the luxury Lumina condominium and the $500 million Millennium Partners, which is under development. When completed, it will feature high-end living spaces and a new home for the Mexican Museum. Luxury condos in San Francisco also spent more time on the market: 58 days compared with 43 in April 2015. While 23 units sold (a 43% year-over-year decline), another 23 listings expired without a contract in the first four months of the year, 109% more than the same period in 2015. MORE: The Ridiculousness of San Francisco Real Estate, Summed up in One Billboard Condos priced at $2 million and above averaged a sales price 1.4% under their listing price. By comparison, a year ago units in this category sold for an average of 1.1% over their asking price. “In virtually any other market, an average of 1.4% below list price would signify a strong, high-demand market,” said Carlisle. “However, in the context of the San Francisco market, which has been in an overheated frenzy for years, it marks a distinct cooling.” A cooling, but nothing more.“Our luxury home market has not crashed by any means, homes are still selling at excellent prices for sellers, but its supply and demand has changed,” said Carlisle. Last month, only 11 listings accepted offers compared with 25 a year ago, a sign that sellers are not giving up their fight for the highest prices. For years, an explosion of new wealth as a result of the high-tech boom drove luxury home sales and prices in San Francisco, creating a sense of urgency and buyer competition, Carlisle told Mansion Global. However, since last summer, a scarcity of IPOs in the tech world and volatility both in the financial markets and the global economy have reduced the number of buyers eager to purchase, he added. The expert’s advice to potential buyers: negotiate more aggressively. “There are certainly opportunities for savvy buyers,” Carlisle said. View full listing (pictured top) MORE From Mansion Global:
