After a difficult year amid the COVID-19 pandemic, condominium prices across the West Coast are starting to see some signs of improvement, recent reports from Polaris Pacific showed. According to the July condominium market reports, sales are up across the West Coast, with San Francisco taking the lead with a $1.22 million median sales price.
“While there is still some uncertainty with the Delta variant and a gubernatorial recall campaign in California, overall, there is more stability than a year ago: the presidential election is behind us, a second stimulus bill was passed, a higher proportion of people are vaccinated in the core urban centers of the West Coast, and there are established protocols for touring homes to ensure that buyers feel comfortable touring homes safely during a pandemic,” Miles Garber, Polaris Pacific’s vice president of research, said. “…In times of uncertainty, buyers feel more comfortable purchasing a home in a completed building that is not susceptible to construction delays.”
According to Polaris Pacific, median sales prices across San Francisco have remained high since 2015, when the region first surpassed a median sales price of $1 million. While the current median sales price of $1.22 million is up just 2.2 percent from the previous year, the report showed resale volumes in San Francisco were nearly triple what they were at this time last year. According to the report, a total of 1,086 resales were reported, marking a 182.8 percent increase from the prior year.
“Nonetheless, rising prices combined with strong sales volumes is a great sign for the San Francisco condo market. The market’s strength is further highlighted by the months of remaining inventory figure, which has been pulled down to pre-pandemic levels and now sits at 1.7 months, a substantial drop from June 2020, when it was 4.1 months,” the report states.
In total, Polaris Pacific reported 303 condo closings in San Francisco as of July. In addition, four condominium buildings totaling 231 residences completely sold out this year. These include the 99 Rausch by Belrich Partners, Pacific Eagle Holdings’ The Austin, JS Sullivan’s Maison Au Pont and 540 De Haro Street by Aralon Properties.
Just behind San Francisco, Polaris Pacific reported a median sales price of $800,000 in Los Angeles, a 2.6 percent increase over the past year. The market, however, reported a higher number of condo closings. In total, 550 condos closed in Los Angeles as of the end of July, accounting for an annual 37.8 percent increase since.
In 2021, several Los Angeles condominium buildings have sold out completely encompassing a total 125 residences. According to Polaris Pacific, these include Toledo Homes’ Nor Windsor; Elysian Peak and Genre Noho Burbank, both by DB Builder, Inc.; Skye 22 by Warmington Residential; and Gramercy Pointe, which was developed by Min Lae.
Seattle lagged just behind the two larger markets with a $665,000 median condominium sales price. However, the market reported the largest annual increase at 7.3 percent. According to the report, this could be due to a lack of inventory.
In total, 382 condos closed in Seattle during 2021, marking a 17.82 percent increase over the past year. Of these sales, sold out condominium buildings include McGraw Square, a 57-unit building developed by Toll Brothers, and the Edison, a 51-unit condominium building by Hardy Development.
“Although sales in the downtown core are below pre-pandemic levels, sales volumes are more than double those of the same period last year in neighboring districts like Central Seattle and Capitol Hill. Overall, sales of existing condominiums increased by 75.2 percent from this time last year, and months of remaining inventory continued to decrease, with the latest figure at 1.9 months,” the report stated.
While reporting positive growth in price across all West Coast markets, Polaris Pacific also noted the markets are well on their way to bounce back as the amount of days properties are on the market also has decreased. According to the report, the three cities are all reporting an average of less than 60 days on the market for condominiums.
In San Francisco, Polaris Pacific reported an average 38 days on the market over the past three months. Likewise, in Seattle and Los Angeles, this number was 29 and 39 days, respectively.
“As a sector, urban condominiums have fared far better than most other real estate industry sectors, such as the apartment and office sectors. Their overall resilience during the pandemic will have a lasting impact. Some of our clients who have built or financed apartments and condominiums have already rebalanced their future pipelines to build more condominiums. At the same time, the urban markets continue to rebound as more and more offices reopen,” Garber said.