June 2011 Update – The San Francisco Luxury Home Market
SF Luxury Home Snapshot
Of those luxury homes selling in the first five months of 2011, 76% sold relatively quickly, without price reductions, and on average within 3% of the list price. Another 24% sold after one or more price reductions, took almost 3 months longer to attract acceptable offers, and on average closed sale at a 13% discount to the original list price. For every 3 luxury homes that sold during this period, 1 expired or was withdrawn without selling. This is a low ratio of expired to sold listings, and shows a strengthening market. However, it is clear that not everything sells — it still has to be reasonably priced.
SF Luxury Homes Accepting Offers
Beginning in February, we began to see a strong surge in luxury home listings accepting offers, which has continued through May.
Percent of Luxury Home Listings Accepting Offers
One of the purest measurements of the supply and demand dynamic is the percentage of listings going under contract (accepting offers) in a given month. This chart gives a very clear view of SF’s luxury home market heating up dramatically in 2011.
SF Luxury Homes for Sale
The inventory of high-end homes for sale is well below last year’s. It is quite low when compared to the level of buyer demand right now.
Months’ Supply of Inventory (MSI)
MSI measures how long it would take to sell existing inventory at current rates of market activity. The lower the MSI, the stronger the market. MSI for luxury homes in SF is now at a very low level: 2.5 months of inventory would typically be considered a strong “Seller’s market.”
Average Dollar per Square Foot
Average Dollar per Square Foot is a general statistic that often fluctuates — what is important is the longer term trend. Seeming to reflect the heating up of this market segment, the average dollar per square foot for luxury home sales has been climbing in 2011.
Luxury Home Sales by Neighborhood
The northern prestige neighborhoods — Sea Cliff to Telegraph Hill — have always dominated luxury home sales, but in the past 10 years, they have been joined by the Noe Valley-Eureka Valley-Cole Valley district and by high-end condo sales in SOMA & South Beach.