San Francisco 2024 January Real Estate Report

San Francisco 2024 January Real Estate Report

  • Alexander Fromm Lurie
  • 01/9/24

San Francisco Real Estate
January 2024 Report

Dramatically Improving Economic Indicators
Suggest a Brighter 2024 Housing Market

  • In the last 2 months of 2023, the average, weekly, 30-year mortgage interest rate dropped
    from 7.79% to 6.61%. With the fall in inflation this past year, the Fed is widely expected to
    begin dropping its benchmark rate, probably in multiple steps, in 2024. The consensus
    forecast among analysts is for further declines in mortgage interest rates.

  • After its end-of-year rally, the S&P Index was up 25% and the Nasdaq up 45% in 2023 (though
    it has ticked down in early 2024). This plays a major role in Bay Area household wealth.

  • On an annual basis, the 2023 median house sales price was down 13% from 2022, while on a
    quarterly basis, the Q4 price was down less than 1% year-over-year.

The 2023 market was characterized by high interest rates, financial market uncertainty, negative
media “doom-loop” narratives (terribly overdone), social/economic issues pertaining to the
downtown district, and a low supply of new listings in most neighborhoods – generally much
lower for houses than for condos. Total sales volume plunged, while for many prospective sellers,
the motivation to move was reduced by the mortgage lock-in effect. With interest rates falling,
media coverage turning more positive, AI companies expanding in downtown, and economic
conditions and consumer confidence rebounding, the direction is trending positive for San
Francisco real estate.

Note: As often seen in recent years, the complex economic, political and social factors
affecting interest rates, inflation, consumer confidence, and housing and financial
markets can change quickly in unexpected ways. Forecasts and predictions are best
guesses based on the interpretation of recent economic data and trends.

Inflation readings as of the morning of January 11: 

S&P and Nasdaq indices, as of mid-day (EST) today: Started the year with small declines, but recovering.

The Census published new, state population data on 12/19/23. These 2 charts look at population changes from April 1, 2020 (just as the pandemic was impacting the country) to July 1, 2023.

Maps of the last 2 years of percentage population changes:  

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