Despite nearly record-low home sales in San Francisco in January, buyer demand is predicted to rebound in 2023, according to a report Tuesday from Compass.
That having been said, sales in San Francisco have only ever been lower in two months: January 2019 and April 2020, the latter when Covid-related stay-at-home orders were still in place, according to the report, which includes data going back to the early 1990s.
Indeed, January sales slipped by about one-third from December, from just over 300 deals at the end of the year to about 215 in January, the figures showed. Year over year, the drop was about the same. Last month had the lowest monthly sales volume since 2009.
January is typically the slowest month of the year for the area’s real estate market, but the start of 2023 was particularly stagnant because of wavering financial markets, rising interest rates, inflation and a spate of layoffs in the tech scene kept buyers on the fence in December, leading to fewer closed sales last month, the report said.
Prices were down as well, with median home prices down 16.5% annually to $1.5 million, the report said.
For the ultra-luxury sector—homes priced at $5 million and above—sales were down about 49% compared to the year before, the data showed.
However, preliminary indicators for 2023 are “surprisingly positive,” even if many are still anecdotal. They include increased attendance at open houses, more buyer inquiries, and homes once again seeing multiple offers and even bidding wars, according to the report.
“Based on this preliminary data, … it appears that buyer demand severely repressed by economic conditions in the second half of 2022 has begun to bounce back,” the report said, noting San Francisco’s busiest season is the spring, especially for luxury homes.