Austin Klar breaks down San Francisco's single-family home market, where sellers have all the leverage. Supply sits at 0.8 months—inventory would vanish in three weeks with no new listings—versus 16-20 months for a balanced market. Prices are up 14-21% year-to-date with no reversal in sight.
San Francisco's housing market is broken and it can all be explained by one number. Monthly supply measures how long it would take to sell out of all existing inventory if no new inventory came to market. The lower the number, the less inventory there is in relation to the number of buyers looking, which means a better seller's market. The higher the number, the more inventory there is in relation to the number of buyers looking, a better buyer's market. For single-family homes in San Francisco right now, the number is 0.8. That means if nothing new came to market, we would be completely sold out of existing single-family home inventory in about 3 weeks. A balanced market is in the 16 to 20 week range, 4 to 5 months of supply. So a number like 0.8 is insane. It is crazy seller-friendly, and it explains why pricing has risen so dramatically so quickly. Demand is outpacing supply so much that average price per foot is up 14% so far this year compared to the same time last year. The average sale price is up 21% and the median sale price is up 17%. And nothing in the data points to an end in sight, at least not anytime soon. We need supply to increase in a manner that outpaces demand, and it just doesn't seem to be happening at the moment. Follow me for more San Francisco real estate.
