Volume was down 38%.
To wolf richter for wolf street.
Average single-family home prices in the San Francisco Bay Area peaked in April and have been falling every month since. The median price through July was $1.33 million, down about $220,000 from its peak, or 2% year-on-year, wiping out most of the big gains in 2021 and early 2022.
In San Francisco itself, median single-family home prices peaked at $2.06 million in April, according to the California Real Estate Association. And slack, and plummeted. It reached $1.68 million in July. Care should be taken here, as the median price fluctuates from month to month and can easily be skewed by changes in the composition of what is sold and other factors. But this is a huge drop that came at the wrong time of the year.
Year-over-year, San Francisco’s median price fell 9% in July, marking the second straight month of year-over-year declines following a 4% year-over-year decline in June. The first time the median reached this level was in February 2018. In this chart, the seasonal lows are typically December and January. Summer months tend to be at the top of the range, but clearly not his July this year. A purple line connects his July.
Bay Area sales volumes plunged 38% year-over-year in July, according to MLS data cited by Patrick Carlisle, chief market analyst for Compass in the San Francisco Bay Area.
“Across the Bay Area, markets continue to slow and cool due to buyer demand, inventories, overbids, markdowns and dramatic shifts in year-over-year growth,” said Carlyle.
“Bay Area median home sales price inflation has generally declined sharply since 2021/early 2022, with some counties seeing median year-over-year declines in July.” Carlyle said.
“These changes vary in degree by county and market segment. Monthly data can fluctuate and be volatile depending on a variety of factors, including market seasonality. The direction is almost universal,” said Carlyle.
A special stew of San Francisco housing market factors.
Mortgage rates soaring above 5% are hard for homebuyers to digest and homesellers to adapt to, and they’re tough everywhere.
But San Francisco, which is focused on tech and start-ups, has become heavily dependent on venture capital funding, SoftBank funding, and employment by those companies and others, with employees paying huge salaries. and got some great stock options. Become dependent on booming stock and crypto prices. So here goes:
Prices of the most speculative assets plummet, cryptocurrencies and stocks that recently went through IPOs and SPAC mergers. Stocks of many of these companies that are or were headquartered in San Francisco have fallen 70%, 80%, or 90% to become my investment. implode stock digit. More broadly, the Nasdaq is down 21% from its November highs, despite a blistering summer rally.
Startup funding stalled, In particular, the sheer amount of money SoftBank was throwing unconditionally into Bay Area startups was the valuation that instantly turned them into pop-up unicorns. But SoftBank has stalled as its stock price plummeted, revealing it has lost trillions of dollars in investments so far this year. and shut the money plug.
Venture capital firm withdrew Escape from funding the craziest things, like exiting via an IPO or a merger with a SPAC.
Population declineBetween July 2020 and July 2021, San Francisco’s population fell to nearly 55,000, or 6.3%, to 815,000, the lowest since 2010, according to the Census Bureau. However, the decline started in 2019. California estimates that Ministry of Finance, the population peaked at 890,000 in 2019. So since 2019, the population has decreased by about 75,000, or he by 8.4%. For those who live here, the City is still very crowded and overcrowded, but a bit less than it was at the peak of its madness.
Remote work and company relocation The once-bustling Financial District and South of Market Area have been preserved. According to Savills, 26% of all office space in the city is on the rental market, which is huge. Among the big cities, only Dallas/Fort Worth and Houston are worse off.
New housing unit added At a rate of 2,000 to 4,500 annually. Single-family homes haven’t been built in over a decade, so they’re all multi-family homes. Cities are getting denser and vast areas are being redeveloped. This includes the Candlestick Point/Hunters Point Shipyards, Treasure Island, Park Merced, and Potrero power stations, but most of them are industrial wastelands, some of which were nuclear-powered by the U.S. military during the Cold War. Decorated with contamination, its decontamination is taking place. The eternal melodrama of scandal. Tens of thousands of houses are planned for these areas.
But a significant drop in house prices would solve many of the Bay Area’s major economic and business problems, including the entire phenomenon known as the housing crisis.
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