San Francisco has had a sterling reputation practically since its inception. The gorgeous, globally-renowned city has only increased in desirability as time has passed. It offers residents everything from proximity to some of the world’s largest technology companies to a great volume of art, culture, and entertainment. First-class cuisine, picturesque beaches, stunning vistas, and homes ranging from beautifully restored Victorians to chic, glass-walled condominiums have turned San Francisco into one of the most coveted places in the world.
Whether you’re exploring the idea of selling your home in the Marina District or investigating San Francisco real estate opportunities in general, understand where the housing market is headed to ensure you make the wisest decisions.
Read on for The Wilkerson Team’s guide on the San Francisco housing market and what is predicted for 2023.
Why is understanding the real estate market forecast important?
First, you may be asking: Why do I need to understand the real estate market in the first place?
The real estate market — like all markets — is subject to fluctuations that can range from subtle to extreme. Look at 2008, which saw a radical reduction in home prices across the board.That type of home price fluctuation is not predicted to happen again in this economic cycle.
The housing market is contingent upon several factors, primarily:
-
The broader state of the economy, including employment and inflation
-
The median home price in your county of interest or where you presently live
-
New construction and developments in the region, of which San Francisco has always had record low production
-
Mortgage and interest rates
-
Supply and demand (i.e., the ratio between the number of homes on the market and the number of viable buyers)
Being dialed into these aspects and predictions empowers you to make a knowledgeable decision regarding the best time to sell or invest. If you are a homeowner, you will want to put your home on the market when it’s a seller’s market or when the supply is low but the demand is high. As a prospective buyer, you should prefer to search for a property in a buyer’s market with a surplus of inventory. Not only will you have more homes to choose from, but you may have leverage over the seller, who may be receiving fewer offers or offers with a sizable number of contingencies. But the perfect market may not always be able to be timed, and you may want or need to move to a different home for the benefit of your family. The Wilkerson Team will help you strategically position your move to conquer the San Francisco real estate the market regardless of where we are in the market cycle.
What is expected of the San Francisco housing market in 2023?
In March of 2020, some negative news was attracted to the area when the so called “Bay Area Exodus” began, with the U.S. Postal Service reporting more than 4,300 changes of address to residences whose inhabitants left the city in a single month.
San Francisco, however, proved resilient. Many people who left the area left only temporarily, and were replaced by new talent looking for fresh career opportunities directly out of college. In 2021, the median value of a home in the San Francisco Bay Area soared from the preceding year. Bidding wars became increasingly common, and homes sold incredibly fast.
As of August 2022, the median house price for single-family homes in the city was $1.63 million. San Francisco home prices have decreased 11.6% since 2021, but the median underscores the fact that people are still willing to pay a premium to live in one of the loveliest locales in the world. The median number of days on the market in August 2022 was just 18.
For 2023, a handful of experts indicate that prices will decrease — but not dramatically. They good news for buyers is that San Francisco will see:
-
Reduced demand from buyers, which curbs competition and affects home prices
-
Increased interest rates, which could reduce the pool of potential buyers
-
More inventory
On the other side of the spectrum, Fannie Mae, among others, believes house prices will rise, albeit only slightly.
Much of the speculation, however, depends on the economy. In 2022, we have seen the highest inflation rate in 40 years. If inflation continues, people may see increased interest rates, persuading homebuyers to consider alternate loan options when searching for a new residence. On the other hand, if we encounter a recession, banking institutions may lower interest rates and temper their financial requirements, urging prospective buyers to jump back into the market.
When will be the right time to buy San Francisco real estate in 2023?
If the growth rate of home prices stabilizes, as some predict, buyers should expect to see a leveling off in mid-2023. This actually means that the best time to start your home search is in the near future. Many buyers have an average search period of three-months, so beginning the process before we reach the predicted leveling-off period is expected to be most beneficial. Another good piece of news for homebuyers is that they should also expect an increase in the number of homes available for purchase: In August 2022 alone, the number of listings in San Francisco increased by 20.9% compared to a year before. It is believed that the number of listings will continue to grow next year, suggesting that 2023 may officially become a buyer’s market. The market could also work well in the buyer’s favor because there will be less competition with the normalization of home price growth rates. This is the time we have been waiting for!
Time your real estate endeavors right with The Wilkerson Team
Whether you’re eyeing San Francisco luxury real estate or own a home in Pacific Heights you may want to list, The Wilkerson Team has the right professionals to guide you through all your buying and selling needs. Helmed by Heather and Drew Wilkerson — a wife and husband team ranked in the leading 1% of national agents — they have extensive experience in helping their clients strategize for their futures. Reach out to them today to get started on your journey.
*Header photo courtesy of Shutterstock
