By Andrew Roth
Short answer: YES.
Although no definitive measure exists, a “Seller’s Market” is achieved when sellers generally have the upper hand in negotiations, in price and terms. This environment is characterized by quick marketing periods, sellers receiving multiple offers, sale prices exceeding list prices, and buyers being frustrated by a lack of available inventory. If you are in the market to purchase today, perhaps some of this sounds familiar?
Months Supply Inventory (MSI)
In an attempt to be more scientific and objective, economists will often point to supply and demand curves and more specifically, absorption rates, to better define exactly when a Seller’s Market exists. The absorption rate is a measure of how rapidly inventory is being purchased relative to supply. In real estate, an excellent expression of this is Months Supply Inventory (MSI), which tells us how many months it would take for the current number of homes on the market to sell if no other listings were to come to market. Depending on where you are and who you ask, a Seller’s Market exists when there is less than 3 to 6 MSI.
San Francisco Monthly Supply of Inventory
Noe Valley Supply & Demand
Noe Valley Monthly Supply of Inventory
San Francisco and Noe Valley
By this measure, San Francisco has always been a Seller’s Market!
In reality, although San Francisco is certainly subject to the same broad-based fundamentals which drive the regional/national markets, SF real estate moves according to micro-markets or micro-trends that affect property differently depending on its location, condition, unique characteristics, or compromises that a buyer must make.
At the moment, Noe Valley is one micro-market that seems to be leading the metric trends we’re seeing Citywide. It would be an understatement to say buyers are indeed eager to buy in Noe Valley, where inventory is getting snapped up at a pace twice as fast as it is elsewhere in the city. And that’s really saying something, where San Francisco condos as a whole are taking less 60 days to sell and where there is only 1.5 Months Supply Inventory. Condos in Noe are selling at an amazing 30 days and have 0.6 MSI (that’s 18 DAYS Supply Inventory!)