San Francisco’s housing debates make a lot of noise over “luxury housing,” but if you ask around you’ll find that few people have any specific idea what that term means.
If you peruse the Multiple Listings Service (the real estate database used by almost all realtors in California, about which you’ll learn more from this column than almost anywhere else, because honestly we’d be lost without it), “luxury” is indeed listed as a subtype of housing.
But even here there’s no strict definition of the term; realtors decide for themselves what their “luxury” properties are, sometimes without much rhyme or reason.
This can sometimes be revealing: For example, since January of 2019, we’ve had 921 home sales in the Richmond (Inner, Outer, and Central), but of those, just 54 came with the “luxury” label attached.
Is that a lot? Well, not really: For example, Nob Hill has less than a third of the Richmond’s population and saw just 402 homes closed in the same period, but still outsold us in terms of “luxury properties.”
The same is true for neighborhoods like Potrero Hill, the Castro, and even Mission Dolores; note that the latter is actually just a small part of the larger Mission district, a mere 21 blocks in all, Dolores Park included.
Just in the last six weeks, 875 publicly listed homes sold in San Francisco citywide, and of those, realtors termed 108 of them “luxury” properties. So yes, by comparison, our stock is a little meager.
But here’s the really interesting part: Of those 54 luxury listings, the most expensive sold for $13.75 million, while the cheapest was just $1.44M. A lot of money in any case, but still, that’s a pretty big margin.
Of the 41 Richmond homes publicly for sale right now, “luxury” units start at just over $1.12 million–well below median for the neighborhood, actually.
These homes tend to be either new construction or freshly renovated, but lots of homes that fit the bill don’t get stuck with the term.
The real secret is: “luxury” is a marketing term. People use it when they think it will help sell a home–and when they don’t think it will help, they don’t.
The fact that so few people use it in the Richmond tells us a lot about the kinds of people who are shopping for homes here–and the kinds of homes everyone imagines they’re looking for. It also means it’s a stat we should keep an eye on; if this number goes up in the future…well, we’ll reckon with that when it comes.
Industry leaders in real estate marketing, market data, gossip, and news…theFrontSteps.com