There are currently 42 percent more single-family homes and condos actively listed for sale in San Francisco (500) than at the same time last year and over twice as many for which the asking price has been reduced at least once (140).
At a more granular level, the number of single-family homes currently listed for sale in the city (190) is currently running 43 percent higher versus the same time last year while the number of listed condominiums (310) is 41 percent higher, but that doesn’t include the vast majority of new construction units on the market, the inventory of which currently totals 1,050 and is running 84 percent higher versus the same time last year.
And with respect to those 140 reduced listings, that’s 29 percent of all active listings in San Francisco, which is nine (9) points higher versus the same time last year, and the highest mid-December percentage in four years.
IMO it would be great if you could put this period information into a table. This would make it easier to follow the figures and percentages.
agree, nice idea
I just wish to point out that currently there is almost no “new”, aka relocation, hiring in tech and this job market sector appears frozen.
In other words, the “bid” and “ask” is spreading between labor and employers and projects are stalling out or being outsourced to other firms and subsidiaries.
Law Of Commons in effect?
Source?
My company is hiring. We can’t get enough developers and engineers
“We can’t get enough developers and engineers”
At the price they need you mean. Anything can be had at the right price and your firm could double the salary offer and get them but they won’t or can’t. At my firm, the only people who accept offers at company’s price already live here and own or are RC. They can’t hire people from out of town unless they raise the salaries significantly (they don’t.) Therefore projects are being cancelled, partially outsourced, or continue on under resourced. This is what I am referring to by “frozen”
The IPO market is also pretty frozen right now. Hearing from friends that startups are having to offer more favorable terms to keep frustrated employees around.
So either the firms will relent, and another burst of inflation occurs and salaries spiral upward in another leg or we have reached the tipping point where it is not economically worthwhile to hire labor at costs needed to support them.
employees are not going to leave unless they can get a job else where; going from start-up to profitable software venture; is difficult; star-up is training grounds; profit making software company, rare, not need so many engineers; maintenance work
Stating the obvious, but I would not want to be listing a condo now. Besides seasonality, weather… that 1/2 pt interest rate hike on 30 yr a couple of weeks ago followed by an even more aggressively than expected plan for 3 more hikes in ’17 by the Fed on short term rates, it certainly feels like “winter is here.”
If there was only 32 signatures in Nov on over 1,000 new construction condos and that was before these rate hikes (prior post), I’m guessing it is going to look pretty dire for builders and sellers next couple of months. That’s over 1,300 condos sitting on the market while affordability just took a big hit. Builders can’t hold onto them forever.
Good point on hiring freezes in tech. Momentum has flattened. While many companies follow calendar quarters and new fiscal budgets open soon, I’m not seeing many ready to open the hiring floodgates.
The condo market in San Francisco is completely over built and the prices are too high. This weakness is unique to the SF market. Other cities in the Bay Area are seeing less construction and stronger demand.
If the prices are too high, it cannot be overbuilt. Those mean opposite things
That’s why prices in San Francisco grew by just .08% in the last 12 months while in over in Oakland where the supply of new housing has been very limited, prices have gone up by 11.7% over the last 12 months. Way too much supply in S.F. has brought the median price down from around 1.2 million to just over 1.1 million. By comparison housing in Oakland is at an all time high with a median value of 664,000.
If you are saying that SF has too much housing now, I completely disagree.
Of course it can. You’re assuming that price and supply respond to changes in the other without friction. It takes time to build condos, and builders cannot know with certainty what the market will look like when the projects are finally done. At the same time, it’s human nature for the people who own those condos to be completely unrealistic about how much they’re worth in the current market – especially when those values are so far below what *they* paid. In economics terms, prices for housing tend to be fairly sticky, so it can take a while for the price and supply to align in a way that gets the market anywhere near equilibrium.
San Francisco’s home prices can not be sustained. Only very small percentage of the S.F. population can afford these luxury condos. SF has saturated the market with the wrong type of housing. These developers work on greed and can’t see past the next quarter. They are not forward looking and at of tune with organic market trends in the Bay
So how much do you expect their prices to fall, and when?
I think there are lots of people making $150k+ around here who keep these prices up
As I read the last 3 months data on the new construction condos, the avail inventory went from 1200 to 1098 to 1052. With Sales each month of “under 30” in Sept, to 110 in Oct, to 32 in Nov.
To the post on “prices too high means can’t be overbuilt,” I don’t think that’s true, there is huge demand but not at these prices or one wouldn’t see the anemic closings. Agree, builders and sellers are slow to acknowledge the true current value of their places or they just can’t afford to sell at a lower amount. Builders will still turn a profit I’m sure. It will be the healthy adjustment everyone has been waiting for (except those carrying inventory or buying last 5 months).
SFRealist. people making 150K+ cannot afford even a 1bd condo in SF. No one making less than $300K should even be considering buying unless they can put 50% down.
You think people should put 50% down? Wow. I suppose you are welcome to your own opinion.
no i dont always think people should put 50% down. If you make over $300K, then i think you are fine putting 20% down on a $1.2M home. If you make $150K as suggested above, then there is no way to make mortgage payments consistently and without undue stress unless you can put 50% down. What I would suggest is that if you make <$300K, you should not consider buying a home over $1M.
Curious how price reductions break down by housing type and neighborhood. On a quick glance at Redfin, looks like more condos than SFHs have had price reductions and (not surprisingly) more in the high rise buildings downtown.
It’s currently 22 percent of listed single-family homes and 33 percent of condos (versus 19 percent and 20 percent at the same time last year).
The SF housing market is going to correct due to the over building in the luxury condo market. We have to keep in mind that SF still has many more condos under construction. Zillow is already predicting a 0% price growth for SF in the next 12 months.
So give us your best guess: how much will SF prices fall? 10%? 25% 50%? And when? Within a year?
0.0 percent growth in a speculation-driven leveraged market is VERY VERY BAD. No such thing as leveling of prices in these situations.
negative prices even worse for the short horizon
SF will fall 10% in the next 12 months.
10% wouldn’t shock me, but that’s a pretty small drop.
I’m being conservative. S.F. should be building smaller homes at the $750,000 range. Even micro units can provide a segment of the population with some decent housing. Let’s keep in mind that San Francisco has the highest poverty rate of any county in the Bay Area. There currently is no housing being built for working people in San Francisco. Everything can’t be “luxury housing.”
It is factually false that no low income housing is built in SF. Developers of new market rate buildings are required to build or pay for low income housing too
Not nearly enough.
‘Not nearly enough’ is not the same thing as ‘no housing’
And what exactly does a $750k house look like. We are a free market economey and supply and demand dictate the prices. Single family homes being built on Brotherhood lane are starting at $1.2. These are far from being labeled luxury housing.
Nonsense. Even during the height of the GFC in 2009, SF prices dropped by 9.3%. The developers are building becuase the demand is there. Overseas buyers are still coming into SF buying up propoerties.
[Editor’s Note: Try doubling that number and you’ll be a lot closer, at least on average and overall.]
prices only dropped for cash buyers at auction or the rare short sale. People with good credit and loan approval were “stuck” dealing with underwater buyers who always pulled from the market (or went BK and thus properties went to cash buyers anyways.