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Condo prices soar in SF as lack of inventory continues

Inventory keeps dropping, prices keep rising.
Inventory keeps dropping, prices keep rising.
Courtesy Paragon Real Estate

It stands to reason that the less an item is available, the more competitive buyers will become in obtaining it. The it in this case is condominiums in San Francisco, which according to the San Francisco Business Times have seen a 19 percent increase in pricing in April as compared to last year at the same time. Specifically, that’s an increase to an average of $1,115 per square foot for new condos, according to condo marketing and research firm The Mark Co.

Meanwhile, inventory had dropped 45 percent year-over-year, with just 136 units available in April. Senior director of research at The Mark Co. Erin Kennelly told the Business Times that April’s results were “by far its largest single month gain this year, building on an already-strong market in San Francisco caused by low inventory and extremely strong demand. However, a surge of new condominium projects scheduled to come online this year may indicate an easing of the city’s inventory crunch.”

Prime examples of projects selling out of units include the Linea project at 1998 Market Street. Developer Brian Spiers’ project is just about sold out of its 115 units. In addition, Oyster Development’s Vida project at 2558 Mission Street has sold nearly a third of its 114 units. Set to come online later in the year are Trumark Urban’s 27-unit Amero, Bosa Development’s 267-unit Arden in Mission Bay, and Tishman Speyer’s 665-unit luxury highrise Lumina in Rincon Hill.

The grand total for 2014? Fewer than 1,500 new condos on the market in San Francisco. Meanwhile, more than 5,000 apartments will come online. Why? As the Business Times notes, for years after the recession, it became far easier to finance apartments than condos.

This is an issue that’s truly beginning to shape San Francisco – and it’s worth more than a single blog post. Let’s talk more about this tomorrow.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com