SF home prices see big drop in January

The Arden, one of Mission Bay's newer condominium towers, makes a virtue of the neighborhood's horizontal emphasis zoning rather than trying to hide that it doesn't exist. The Arden, one of Mission Bay's newer condominium towers, makes a virtue of the neighborhood's horizontal emphasis zoning rather than trying to hide that it doesn't exist. Photo: John King, The Chronicle Photo: John King, The Chronicle Image 1 of / 1 Caption Close SF home prices see big drop in January 1 / 1 Back to Gallery

The median price paid for new and existing Bay Area homes and condos that sold in January was $630,000, down 5.3 percent from December and up 1.6 percent from January of last year, according to CoreLogic data released Tuesday.

In San Francisco alone, the median price paid in January was $1,067,500, down 5.1 percent from December and down 9.2 percent from January of last year. A big reason for the drop is that only 58 new homes sold this January compared with 159 last year, and new homes tend to be pricier than existing ones, said Andrew LePage, CoreLogic research analyst.

“Buyers will pay a 10 to 15 percent premium over resale (home prices) to be the first to own something. Buyers in San Francisco want to be the first to cook on a stove and the first to use a bathroom,” said Gregg Lynn, a real estate agent with Sotheby’s.

The city’s condo-building boom can cause distortions in monthly data because developers generally begin selling units long before construction is completed, but sales are not recorded until the building is ready for occupancy and buyers close escrow. So when new buildings come online, there can be a clump of closings.

In January of last year, three condo developments accounted for 130 of the 159 new-home sales. The median price paid for new homes (mostly condos) in San Francisco was $1,263,000 in January, down 8.9 percent from January 2016.

However, if you look only at existing San Francisco homes and condos sold in January, the median prices were $1,130,250 and $1,045,000, respectively, up 7.2 and 6.9 percent.

A change in the mix of houses sold impacted prices across the Bay Area.

Except for San Francisco, prices rose in every Bay Area county year over year, in some cases (Marin and Napa) by double digits. But the median price for the nine-county region rose a mere 1.6 percent because “a higher share of sales occurred in the more affordable inland stretches of the Bay Area. Plus, a higher share were resale condos and a lower share were newly built,” LePage said.

Sales meanwhile continue to be constrained by low inventory. Only 4,849 homes and condos sold in the region in January, down 31.4 percent from December and up a mere 0.2 percent year over year.

Sales typically fall between December and January, and this year’s decline was slightly above the long-run average of 29 percent. January sales were 17.5 percent below the long-run average for the first month of the year.

Because they feel the future is so uncertain, “people who can choose not to sell are choosing not to sell,” Lynn said. “We have less inventory on the market than we did a year or ago or two years ago.”

New construction will add to supply this year, but generally in higher price ranges (except for mandatory affordable housing). In San Francisco, there were 1,116 new condo units on the market in February, including units that are sold while still under construction. There were an additional 1,272 units under construction that are not yet being offered, according to the Mark Co.

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At this time last year, there were 655 new units for sale and 1,201 under construction.

Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender