South of Market – or SOMA, as it’s known to its friends – seems to be in line with the trends sweeping San Francisco. Specifically, it’s experiencing very high demand, very low inventory, and rapidly appreciating prices that leapt upward in the second quarter.
In SOMA, more condos are sold than in any other area of the city. Lately the majority of sold condos have been flying off the market without any price reductions, averaging a sales price of 3 to 4 percent over asking price.
For condo sales of $1 million and above, there was a surge in 2012 and then an even higher surge in the second quarter of this year. There is huge demand for the best condos in the best buildings, and the drop seen in the first quarter is typical due to seasonal holiday dynamics for higher-end buyers and sellers.
The second quarter of this year saw total sales soaring while the number of distressed condo sales dwindled to almost nothing. Months supply of inventory is extremely low – below two months – which would indicate a strong seller’s market.
Supply and demand can be measured by the percentage of listings accepting offers. In 2013, that percentage has hit historical highs, a reflection of very strong buyer demand versus a limited supply of condos for sale. In addition, the average amount of time it takes for a new listing to go into contract is dropping.
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