Sitting between San Francisco Bay and the Pacific Ocean, the 7 mile-by-7mile piece of dirt we San Franciscans call home is bucking national housing trends. I’m a Realtor on the streets and live it day-to-day and after 20 years here I can tell there isn’t enough inventory for current demand. I see it with my buyers and with visible activity in ‘on’ market and ‘off’ market sales.

San Francisco is a city of neighborhoods and each one has its own nuances and likewise its own ‘denizens’ and converts. This creates leaders and laggards and thereby popularity and higher prices and faster sales. The national numbers released by Case Shiller show most of our country still struggling. San Francisco is the gateway to the industries and jobs of the future as well as the fast growing nations of China and India. You don’t have to look further than the private buses that Google, Genentech and others send into San Francisco daily to see that their workers value living in the ‘center of it all’ to know that there is heightened demand for living ‘in the city’.

Current inventory for single family homes sits at 2.4 months and for condos at 2.9 months according to Trendgraphix and the San Francisco Association of Realtors.

Prices have shot up in both categories since the first of the year by approximately 25% even though it’s off by slightly 3% from the same time last year. It is the fall of inventory by around 44% year-over-year that is the key here in my belief as a Realtor and a consumer. I was always taught that a ‘normal’ market has an inventory of homes at the 3 month level…we’ve fallen below that and are at the point of rising prices and quickening pace. Only time will tell, but the word on the street is that with all the new IPO’s that will hit this year in the tech world, everyone is expecting lots of newly minted millionaires to be demanding their piece of San Francisco’s dirt.

Lance Fulford, MBA