OK – I know my grammar ain’t great. Yes, the title should read “To Whom Does This Market Belong?” But who talks like that? And besides, I just got back from vacation and have too much work to do to think about silly things like grammar.
And since I’m swamped, I thought I’d throw a little gem from the last version of The City Update (TM) at you. What’s The City Update (TM), you ask? Only The Best San Francisco Real Estate Newsletter EVER! It’s taken a little bit of the best features of all of the other good real estate newsletters out there (common, I’m humble enough to admit there are not only other good agents out there, but even other good newsletters), thrown in a little bit of flavor from yours truly, and is sent out to anyone who is anyone every Friday (except of course when I’m on vacation like I had been the last 2 weeks). If you want your own, visit The City Update (TM) website, or click on the sign up box on the top right of your screen. You know you want to!
Anyway – back to the topic at hand. The debate is always continuing.
San Francisco? Is it a Buyer’s Market or a Seller’s Market?
I wasn’t quite sure what to call this little blurb about the market.  We’re always hearing the terms “Buyer’s Market,” “Seller’s Market,” and “Normal Market” thrown around. Â
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In fact, I’ve been hearing more and more often that San Francisco currently has a Buyer’s Market. Frankly, it feels like a bit of a Buyer’s Market. I’m able to find some pretty good values for my buyer clients and I’m extra careful about properly pricing my listings.Â
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But, what it feels like and what it is are often two different things, so I decided to crunch a few numbers.
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Really quickly, let me break down the nature of this terminology for those not familiar with it.
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The type of market we are in is ultimately determined by a thing we call the “absorption rate.” The absorption rate is essentially the mathematical answer to how long it would take to sell every listing on the market today. It’s determined by dividing all available listings on the market by the number of listings that have sold in the last month.Â
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“Normal Market” conditions exist when the Absorption Rate is between 5 and 6 months.
 “Sellers Market” conditions exist when the Absorption Rate is lower. (1-4 months)
“Buyers Market” conditions exist when the Absorption Rate is higher. (7+ months)
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Well – looking at those numbers, San Francisco’s current absorption rate is 5 months – putting us smack dab in the middle of a Normal Market.
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Yeah, I know, I know, the market sure doesn’t feel normal. The hotter real estate districts (5-8) actually have a Sellers Market with 4 months, while the slower real estate districts (3 & 10) have a Buyers Market with 7 months.Â
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The numbers prove that there is no one story in SF. Real estate is completely local, and the state of your district, your neighborhood, or even your specific block may look nothing like the pictures I’m painting here.Â
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If you have specific questions about how things are going in your neighborhood, or in an area you’re interested in buying in,
give me a holler – we’ll talk.Â
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