With the January inauguration of the new administration came a number of changes that have injected uncertainty into some important aspects of business which may have a ripple effect into the San Francisco real estate market.
The first change is the executive order to ban non-U.S. citizens entering the U.S. from certain countries. This caused an immediate employee travel ban by a several prominent San Francisco and Bay Area employers for employees potentially affected by the ban. Second came the announcement that the administration plans to double the qualifying salary threshold from $65,000 to $130,000 for an H-1B visa, making it much harder for employers to fill positions with foreign talent, a not insignificant source of employees in the high tech sector. Both of these injected uncertainty and potential business disruption into the Bay Area business community and both have received broad coverage in the business and general news, with some high-profile CEO’s speaking out against them because of fears of damage to their businesses.
On a stabilizing note, mortgage rates eased off just slightly (about 1/8 percent) in January. However, most lenders expect them to rise somewhat throughout the year, to around 5%.
The charts on the following pages graphically depict the same message we’ve seen for the past few years: San Francisco remains a strong single family home sellers market, with incredibly low inventory at 1.3 months, down 10% from January 2016. Median sales prices are up 7.1% year-on-year for single family homes. The median sales price of single family homes also continues to be bid up above list price, coming in at 105.9% for January.
The condo/loft picture is slightly less rosy but still a sellers market, mainly because there is still very low inventory, just 1.8 months. Median sales prices are down 3.3% year-on-year, and only half of the sales are going above list price, with the other half below.
