Hi everyone,
It looks like the battle of wills within our gov’t is holding firm; the Fed continues to refuse to lower their benchmark rate despite enormous political pressure to do so. The strong economy and the potential for inflation is their reason. And wouldn’t you know it….inflation ticked up in what most economists saw as a sign that the tariff policies were beginning to show up in prices. Of course, there are wide disagreements - between analysts, investors, economists, high officials in government - as to what happens with inflation in the 2nd half of the year.
While the dramatics play out nation and worldwide, San Francisco seems to be carving its own path. Read on.
Newsworthy
After San Francisco's spring residential real estate season, the numbers point to strong ultra-luxury sales in the city for the first half of the year, topped by a $30 million sale on Sea Cliff.
Our second-quarter sales for luxury homes increased slightly from the first quarter but were virtually the same year over year. In the first half of the year, there were 117 luxury home sales (defined as $5 million for houses and $3 million for condos) compared with 103 in the first half of 2024, according to our Compass data. Some very large off-market sales are often not found on public listings and can be covered by nondisclosure agreements.
- The most expensive Bay Area home to sell in the first half of 2025 went for $30 million.
- Former Google CEO Eric Schmidt had the most expensive co-op purchase at $24 million.
- The late U.S. Sen. Dianne Feinstein's former home sold for $19 million in the second quarter.
Urban Land Institute wants to reimagine Market Street, which winds all the way from SF’s Twin Peaks neighborhood to Embarcadero Plaza. The group partnered with Civic Joy Fund this spring to launch a design competition for proposals to remake Market Street for the post-pandemic era, offering entrants the chance to put their ideas before a star-studded jury that included former Apple designer Jony Ive and the SF Chronicle’s former urban design critic, John King. Oh, and a $100,000 pot of prize money to be split among the winners.
- Urban Land Institute launched a design competition to reimagine San Francisco's Market Street.
- Five winning proposals aim to revitalize the struggling downtown area.
- Ideas include urban forests, long benches and interactive LED signage.
New reports from JLL and Pitchbook found that the Bay Area brought in the most VC funding in the world last year, with nearly $70 billion of the world’s $134.6 billion going to the region, the San Francisco Chronicle reported. In 2021, AI companies had six leases for occupied offices in the area totaling 280,000 square feet; today, there are 41 leases for occupied space totaling 2.4 million square feet.
Getting ready for Fall….
Why are we talking about the Fall market in the middle of July? Because it will be here before we know it in September. Our inventory pretty much disappears during the summer and shows signs of life after Labor Day weekend. Compared to the spring selling market, which typically runs from February/March through June, our fall market is extremely short. From September to just before Thanksgiving in November, it’s barely two and a half months.
Single family homes once again remain competitive. Our recent stats either strengthened or remained the same as the previous quarter. Homes and condos hit their highest quarterly points since the start of the pandemic boom and rents across the city are at the highest levels since 2020.
Words of Wisdom…
At the risk of being repetitive, we’ll say it again.
If you’re buying a home in this market, consider moving your investment funds into cash to move quickly for the right home. Stay connected with your lender to monitor interest rates. Engage closely with your Realtor to spot off market and/or Compass Private Exclusive listings.
If you’re selling a home in this market, be clear of your end goals. San Francisco has an inventory shortage in some sectors, so depending on the property, chances of a quick sale are high. Are you in a position to manage a fast close? Do you know where you’re going? Are you transferring your tax basis? Will you be investing the proceeds? Clarity on these matters is essential, in order for your agent to negotiate effectively for you. You are welcome to reach out to discuss your big picture goals with us.
Did you know….
* It is estimated that by year 2100 the US will be outdone as the third most populous country in the world by......Nigeria! 546 million versus 394 million. China's population is expected to drop by over 46%! While India will be #1 with over 1.5 billion people. (Based on UN Projections)
*In June, the largest YOY price increase was for construction machinery and equipment parts, up 24.2%. Metal molding and trim prices were up 15.1%, fabricated steel plate prices were up 13.6%, ornamental and architectural metal work prices were up 9%, and fabricated structural metal prices were up 9%. 50% tariffs are in effect on steel and aluminum products and a potential 50% tariff on copper products coming this August. (EYE ON HOUSING)
* Data centers are expected to account for 8.6% of U.S. electricity demand by 2035, more than double the current 3.5% share. Washington, New Mexico, Montana, Nebraska, North Dakota, South Dakota, Utah, Wyoming, and Iowa are the top states for electric supply and could see more data centers built in their area. (Bloomberg)
* When you make mortgage payments bi-weekly instead of once per month, you are effectively making 13 months worth of payments in a year, decreasing interest paid on a home loan substantially and paying off the loan much faster. Paying one extra monthly payment can achieve similar results. (Yahoo Finance)
