Despite High Prices, San Fransico Condos Enjoy Strong Demand
- Jul 28, 2015
San Francisco—In a measure of the strong demand for condos in the Bay Area, The Mark Co. reports that it has sold out five San Francisco condominium developments, with total sales volume of more than $212 million. The sellouts included Amero in Cow Hollow; 870 Harrison in the central South of Market district; 8 Octavia in Hayes Valley; Thirty Five Dolores in the Mission Dolores neighborhood; and the first phase of The San Francisco Shipyard, a master-planned community in Hunters Point.
According to The Mark Co., Amero achieved an overall price per square foot over $1,300 and several penthouses there sold for over $2,100 per square foot, evidence of a market for ultra-luxury product. Thirty Five Dolores came in at over $1,200 per square foot, while 870 Harrison reached record absorption by selling over 75 percent of its units within the first two weeks on the market.
“New condominium product experienced high absorption rates during 2014 and the first half of 2015, as low inventory paired with high demand,” said Alan Mark, president and founding partner of The Mark Co. He noted that San Francisco saw 619 new construction condos come to market during the first half of this year, 517 of which were absorbed by the end of June. “We expect another 400 units to hit the market by year end,” he added.
The Mark Company Condominium Pricing Index for June 2015 found that new condo pricing in San Francisco was $1,304 per square foot, an increase of 3 percent from the previous month and 14 percent from the same month last year. New construction inventory increased by 10 percent over the previous month due to the addition of Fulton 555, and was 122 percent higher than one year ago.
The company’s proprietary San Francisco homebuyer demographics show that most buyers are moving from within San Francisco, with the next largest groups moving from the South Bay and Peninsula. The majority of the buyers are employed in the tech, biotech, healthcare and or finance industries. Many work for Silicon Valley firms, but prefer to be in San Francisco.
Unsurprisingly, the buyers are well educated, with 97 percent holding a college degree or higher, and about 60 percent having earned an advanced degree. A quarter of area homebuyers earn a household income of $250,000 or greater, and the largest percentage of buyers are under the age of 40, with parents playing an active role in many purchases, sometimes providing down payment assistance and co-signing mortgages.