Cooling Ahead for High-End San Francisco Real Estate

The hottest topic these days is affordability and where the market is going.  I am at the edge of my seat watching the real estate market and wisely advising my clients.  This article touches on the high end of San Francisco Real Estate sales.  The million dollar range is still widely active for the few listings available.  I too am curious where this market is going.  And open to hear your thoughts.  


Cooling ahead for high-end San Francisco real estate

Nina Hatvany has worked for 25 years in San Francisco as a real estate agent concentrating on the high end of the market. Today, as a result of a reeling stock market and concerns about global economic stability and growth, the conversation with well-heeled clients has turned decidedly more cautious.

“I have a number of buyers who are just more hesitant,” Hatvany told CNBC. “They look and they talk and then they start arguing with me about the slow IPO market and overvalued unicorns. I feel like I have to argue with them about how nice the house is.”

As technology stocks slide — the Nasdaq is down 15 percent this year — and private tech valuations suffer, real estate brokers say the feverish clamor for high-end homes in San Francisco has quieted.

“Somebody who might have pulled the trigger at $5 million last year now might be a bit more cautious,” said Josh McAdam, a top producing real estate agent with Pacific Union in San Francisco. “It’s not the same environment.”

McAdam is quick to note that demand remains strong for homes selling in the $1 million range. But the high-end residences in the City by the Bay, if they are to attract buyers, now need to boast all the right finishes, he says.

For example, McAdam said only one home in the tony neighborhood of Noe Valley last year sold for over $5 million. The year before, he says a handful of homes sold in that price range and a couple even above $5 million.

Hatvany confirms the same trends. In the second quarter of last year, her firm said, 18 homes sold in San Francisco for $6 million or higher. That number dropped to nine in the fourth quarter.

One question: Will the more cautious tone now defining the ultra-high-end of the market spread to other price points?

Christopher Palmer — an associate professor at the Haas School of Business at the University of California, Berkeley, who specializes in the housing markets — said the biggest threat to price appreciation is a downturn in tech because so much of the Bay Area economy is reliant on the sector.

“Tech stocks have taken a beating in the past few months, and every time there is a stock market correction, people start to wonder if the spigot of capital that has fueled so much Bay Area growth is about to be turned off,” Palmer said.

Analysts at Fitch raise another concern, arguing that home prices in San Francisco have “risen to a level unsupportable by area income.” Fitch reports that home prices set a record last year and are now more than 60 percent above the post-crisis low of 2012.

Fitch estimates that the city’s current home prices are 16 percent overvalued relative to economic fundamentals.

Still, though home prices may fall in San Francisco, Palmer said a wave of mortgage defaults or foreclosures is extremely unlikely.

He notes that the average jumbo mortgage borrower in San Francisco had a nearly 40 percent down payment, implying that homeowners enjoy a lot of flexibility to navigate price declines before being underwater.

Palmer also highlights a benefit of decreasing home prices: “To many prospective homebuyers in the Bay Area, this is great news,” he said. “There is a substantial amount of young families that would appreciate a slowdown in appreciation to be able to get into a home.”

I read this article at:

Remember to follow our Blog at:

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:

Call us at: 650-568-5522

Want Real Estate Info on the Go? Download our FREE Real Estate App:

Visit our Website at:


Visit us on Facebook:

Yelp us at:

Or Yelp me:

Connect with us professionally at LinkedIn:

Please enjoy my personal journey through homeownership at:

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008


Published by

The Caton Team - Realtors

Sabrina & Susan are native Californians - born and raised in the Silicon Valley with a passion for Residential Real Estate. A mother and daughter-in-law duo called - The Caton Team. With over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time. Call | Text at: 650-799-4333 | Email The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true. The Peninsula is our backyard - let us help make it yours. We represent Buyer’s and Seller’s throughout the Bay Area. The Caton Team – Susan & Sabrina A Family of Realtors Effective. Efficient. Responsive. What can we do for you?

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.