by Garey De Martini : marinatimes – excerpt

Winter has finally arrived, and it’s almost time to put 2023 to bed. Couldn’t happen soon enough in the minds of many San Francisco real estate agents.

“Stop me if you’ve heard this before: prices are down because interest rates are up, prices are up because listing inventory is down,” said Matt Fuller, cofounder at Jackson Fuller Real Estate, when describing current market conditions.

“At an annual real estate luncheon in December of 2022, First Republic Bank predicted a bumpy 2023, and a drastically improved 2024,” he continued. “Well, they sure were right about 2023.”

And what’s ahead in 2024?…

According to a housing and economic forecast released in late September by the California Association of Realtors, slower economic growth and cooling inflation will bring down mortgage interest rates in 2024 and create a more favorable market environment to spur California home sales next year.

But, really, who knows? It’s always a little frightening to think that a slowing economy is a good thing, something that should be welcomed…

As has been well documented, San Francisco is suffering from a lack of listings. Fuller pointed out there might be light at the end of that tunnel, but it might include some unforeseen consequences.

San Francisco is supposed to build 80,000 market-rate homes in the next eight years to comply with its state-mandated housing goals. If that’s even possible, in a city that averages 4,000 to 5,000 sales a year, what would adding 10,000 new homes a year on top of that do to values in the city’s real estate market? Only time will tell.

Where will all these new homes be built? According to Fuller, most of the development sites are south or east of I-280. And of course on Treasure/Yerba Buena Island, where 8,000 new homes are planned — and where he estimates less than 500 new homes have been finished as of 2023…(more)