Dive Brief:
- Data from Paragon Real Estate Group’s November market report indicates the San Francisco luxury home market may finally be "cooling" after the feverish buying it saw this past spring, the San Francisco Business Times reported.
- While all housing segments have been affected — a common seasonal occurrence — Paragon noted the owner and mid-price markets still favor sellers; however, the dynamic between buyers and sellers is shifting — a swing that is difficult to reverse.
- Paragon proposed another reason for the price shift — an increasing inventory of new luxury condos, the Times reported, giving buyers more options and less of an incentive to compete or move too quickly on a purchase.
Dive Insight:
Other real estate experts and analysts have predicted a slowdown in the Bay Area real estate market because of the pullback in the IPO market and a deceleration of home appreciation. It is also possible that wealthy homebuyers have sold in the shadow of a volatile stock market and are waiting to buy until they get a clearer picture of their investments, analysts have said.
"The luxury home market hasn't 'crashed.' There are still high-end homes selling very quickly for very high prices and competitive bidding," Paragon said in its report. "But it has markedly cooled and the number of luxury home listings in San Francisco hit a new high in October, so correct pricing has become increasingly vital."
Paragon said time will tell whether the cooling market is going to be a "blip ... or the beginning of a longer-term reality."
