Pent-up demand for new condos will continue in San Francisco during the next four years despite a return to historical delivery volumes and a pipeline of proposed deals. This is the opinion of Garrett Frakes, managing partner of sales and marketing firm Polaris Pacific, who refutes the idea that 1,000 condo deliveries a year will erase the city’s shortage of for-sale units.

  • San Francisco will return to a "normalized supply" of roughly 1,000 condo deliveries in each of the next four years.
  • Condo deliveries will be concentrated in the southeastern portion of the city moving forward.
  • Some industrial land is being purchased in the city and being reused for condo projects.

Pent-up demand for new condos will continue in San Francisco during the next four years despite a return to historical delivery volumes and a pipeline of proposed deals.

This is the opinion of Garrett Frakes, managing partner of sales and marketing firm Polaris Pacific, who refutes the idea that 1,000 condo deliveries a year will erase the city’s shortage of for-sale units.

[Tweet “Condo deliveries in San Francisco are expected to return to historical norms”]

He explains that while the volume of condo deliveries will return to historical levels this year, only 200 to 250 units were delivered during each of the previous five years, thus pent-up demand will persist.

“That (the delivery of 1,000 units this year) doesn’t necessarily do much for us,” Frakes said, explaining that of the units slated for 2016 delivery an estimated 50 percent have already sold. By the time these projects are completed its unlikely a significant number of unsold units will be available to impact supply.

An uncertain pipeline of inventory

When combining all of San Francisco’s proposed condo, market rate multifamily and affordable housing projects the city has a pipeline of more than 62,000 units; however, that is over a span of 20 years.

Frakes seems to believe that a number of proposed condo projects will not come to fruition, as rising land and construction costs make projects harder to finance.

In the coming years the largest concentration of condos that do deliver will be situated in the southeastern portion of the city, in large part because of the master plan at Candlestick-Hunter’s Point. Frakes also points to areas of opportunity in Visitacion Valley, where some industrial land is being converted for condo use.

Some “new” condo units could come online as the result of apartment to condo conversions, but Frakes believes these occurrences will be minimal. The second tower at One Rincon Hill was recently converted into roughly 300 condos.

Frakes cautions buyers and financial partners to question the accuracy of real estate reports that suggest San Francisco’s condo market is becoming oversupplied or that demand is being met.

“That is not reality,” he said.

Email Erik Pisor

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×