The builders are just emerging from a long period of stagnation and loss. Some if them were caught with inventory at the end of 2008, beginning of 2009 and had to sell and discount, losing a lot of money. Then they had to stop building all together until last year and when they resumed the cost of construction materials went up.
Considering all these factors, many developers, at least in San Francisco, decided to build rentals instead of condos and single family homes. Some of them are building condos and in order to be profitable they need to sell a 1 bd condo in San Francisco for at least 650k.
And that is with no discounts. At most you can negotiate for a city transfer tax or an appliance or flooring upgrade. But most of time is 'take it or leave it'.
Alina Aeby-Broker Associate
Pacific Union/Christie's International Real Estate