Real Estate

Real Estate: John M. Lee


Mid-Year Real Estate Update

By John M. Lee

As I write this column, the first half of 2021 is just about over. This is a really odd real estate year coming out of the pandemic with about 70% of the people vaccinated in San Francisco and our economy starting to open up. 

We have had a very good stock market with the major indexes rising 12-15% for the year. But what about the real estate market? Let us look at some data and really decide for ourselves where the market is at currently and try to figure out where it will be going.

I examined the single-family home markets in the Richmond and Sunset districts, because these two markets generally track very closely together, and compared them against the data in San Francisco as a whole. I will be comparing this year’s data to that of 2019, because last year we lost about two months of sales in March and April at the start of shelter in place, so that comparing numbers in the first half to those numbers will really skew the results.

For the first six months in 2021, 78 single-family homes sold in Richmond, as compared to 99 in 2019. The median price however went from $2.18 million in 2019 to $2.4 million in 2021, an increase of 10.1%. The median days on the market decreased from 14 days to 10 days. Thus, we had a lower number of sales, higher prices and a shorter amount of marketing time in the Richmond.

 In the Sunset, 223 homes sold during the first six months in 2021 versus 195 in 2019, an increase of 14.4%. The median price rose from $1.6 million in 2019 to $1.65 million in 2021, an increase of 3%. The median days on the market also went down from 14 days to 10 days. In the Sunset then, we have more homes selling, higher appreciation and a shorter marketing period.

As a comparison to San Francisco as a whole, the number of single-family home sales increased by 16.8%, the median price went up by 12.5%, and the marketing time went from 14 days to 11 days. So compared to the City, the single-family homes in the Richmond and Sunset districts are following the same trend, with the exception that a lower number of homes sold in the Richmond. 

However, if you look at the number of days it takes to sell a home in the Richmond, it is at 10 days like the Sunset and comparable to the rest of the City. So, the real estate market is not slow in the Richmond, it is just that sellers are not putting their properties on the market, so there is less inventory to sell rather than a slower market.

Also, the appreciation in the Sunset of 3% these last two years is misleading. If you ask anyone who has bought a home there in the last six months, you will hear horror stories of multiple offers and homes selling for a few hundred thousand dollars over the asking price. The median price is defined as the one home that sold right in the middle of all the homes sold. For example, if 101 homes sold in a certain period, the one home with 50 homes that sold higher and 50 lower will be the median priced home. In 2019, higher-end homes sold to bring up the median price. In 2021, more homes sold in the lower price range, thus bringing the median price down, this resulted in a lower median price. If you compare the same home as to what it was worth in 2019 to what it can sell for now, you will come up with a much higher result.

As I wrote repeatedly in the past, we have seen historically low mortgage interest rates for a while and looks like it will rise slightly for the rest of the year. As we go into the summer months, look for a slower pace of home sales and a moderation of price appreciation. This does not mean it will become a buyer’s market as there is not enough inventory to meet demand, but just a good market at a slower pace.

If you look around, you will notice that prices of just about everything has been going up. Gasoline prices are up, food costs are higher, labor is more expensive, construction material has gone through the roof, etc. This means that the upcoming inflation numbers will be much higher than normal. The Fed is very concerned about that and have signaled that they will be raising interest rates in the future. 

How this affects real estate will be very interesting. In the past, real estate has been a good hedge against inflation as the values of real assets go up during periods of inflation. However, it also depends on interest rates, overall consumer confidence, and many other tangible and intangible factors.

So, my advice is that if you are thinking about buying, there are opportunities as prices are still moving up and interest rates are relatively low. If you get locked into a 30-year fixed rate loan now, chances are that when you look back a few years from now, you will realize what a tremendous rate you have. If you are thinking about trading up, it is a great time to do it because you can position your real estate portfolio for the long run. If you are thinking of a straight sale, you will be realizing the strong price appreciation we had in the last few years!

As always, I would strongly recommend that you consult with a Realtor, accountant, and perhaps an attorney prior to making any real estate decisions.

John M. Lee is a broker at Compass specializing in the Richmond and Sunset districts. For real estate questions, call him at (415) 465-0505 or email

Richmond Homes Sold in June*
AddressBedBathSq. Ft.Price
588 12th Ave. 321,770$1,500,000
34 Tamalpais Terr.321,8251,515,000
723 44th Ave.221,6871,800,000
152 Fourth Ave.31.51,1301,825,000
3030 Anza St.432,0841,835,000
515 12th Ave.21.51,8251,950,000
762 29th Ave. 32.51,8042,250,000
334 23rd Ave.32.52,0502,305,000
624 42nd Ave. 32.52,7822,370,000
719 Fourth Ave.221,2502,433,000
319 22nd Ave.432,3112,901,000
307 Parker Ave.322,6293,078,000
766 30th Ave,64.53,6423,300,000
254 20th Ave.43.53,2573,875,000
160 27th Ave.322,9153,900,000
Partial listing. Source: M.L.S.
Sunset Homes Sold in June*
AddressBedBathSq. Ft.Price
2275 42nd Ave. 219051,280,000
2174 48th Ave.321,1691,500,000
1258 40th Ave.211,4251,550,000
2037 14th Ave.211,0751,560,000
3318 Quintara St.331,3501,600,000
2619 25th Ave. 311,3681,650,000
2346 41st Ave. 311,1741,680,000
1211 39th Ave.422,5751,700,000
3326 Wawona St.331,6501,750,000
2034 18th Ave.211,4001,780,000
1567 24th Ave.241,5001,850,000
2258 26th Ave.322,1931,875,000
2186 29th Ave.331,9321,900,000
1501 38th Ave.321,7002,075,000
2349 15th Ave.652,5362,240,000
2550 22nd Ave.422,4842,750,000

Partial listing. Source: M.L.S.

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