A Look Back at a Record-Breaking 2021 for San Francisco Real Estate
To say that 2021 was quite the year for San Francisco real estate would be an understatement. The Bay Area experienced unprecedented record highs during a pandemic.
As recently reported in the San Francisco Gate, 2021 home sale prices hit the highest median price ever, according to Redfin. There were several factors that contributed to this increase. Redfin reported that "the number of homes for sale fell to an all-time low, [and] there was record demand for second homes." That combined with historically low interest rates, working remotely being the new normal, budding tech industries, and an explosive stock market made for a massive national demand for real estate.
In San Francisco, that demand was through the roof. The typical U.S. home sold for nearly $400,000, up 24.4% year-over-year, while homes throughout the entire Bay Area went for $1.5 million. The median sales price of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma was $1.3 million according to Norada Real Estate Investments. That's a nearly 20% increase over last November and the highest year-over-year gain in the state of California, according to the California Association of Realtors.
Redfin data shows that these price hikes were because of record-low inventory across the country. Although inventory was also down in San Francisco, inventory has always been historically light.
Possibly due to the low inventory, homes came off the market in record time and at record offer rates. Homes in San Francisco sold in 16 days on average — and nearly 80% of those homes sold above listing price.
2022 may not look much different because even if interest rates go up, demand will unlikely go down.
"There's a main trend from 2020 that continued through 2021 and I expect this trend to continue in 2022. That trend is the importance of home, regardless of the price point. Luxury, or not, more people are placing more value in their main residence than ever before," said Alex Clark, Realtor and Founder of The FrontSteps Real Estate.
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