What’s Causing San Francisco Listing Inventory to be Low?

Lately, there have been articles everywhere about the reasons by sellers aren’t selling which is creating the drastically low inventory situation. Some of these reasons, we believe, do play a role and many do not. What is rarely mentioned is that by far the biggest factor behind declining inventory, i.e. the choice a buyer has within a particular period of time, is not that sellers aren’t selling, but simply the greatly increased demand in the market over the past 3 years.

So Paragon did a sample analysis of the trend in numbers of active listings for sale, by quarter, using the actual SF market percentage-of-listings-accepting-offers statistic, but assuming that the number of new listings stays exactly the same. Below is the chart. Even with no decline in the number of new listings, the increased demand, such as we’ve seen in the city, causes inventory to plunge over time.



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