While the number of homes listed for sale in San Francisco has started to tick up, the pace of sales has further declined.

As we outlined three weeks ago, the pace of home sales in San Francisco was already “down 20 percent on a year-over-year basis and dropping fast.”

Last week, the number of homes in contract was down 40 percent.

And pending home sales are now down 46 percent versus the same time last year in San Francisco, with the average price of the homes under contract down 6 percent since the beginning of March and holding at under $1,000 per square foot (versus closer to $1,090 per square for those homes on the market for which contracts have yet to be written).

Comments from Plugged-In Readers

  1. Posted by sfres

    Kind of astonishing to me that the number of homes in contract is not down 90%. Odd times.

    Look at 266 Bella Vista Way. 3 BR home in Miraloma just closed for $1,820,000. Sold for $1,268,000 in late 2017. That kind of appreciation is an outlier, and focusing on anecdotal outliers in either direction is going to present a distorted view of the market. I’m amazed that anything is closing right now. Others must be more optimistic than I.

    • Posted by wilson

      I think you are seeing things that went into the pipeline before this all got serious. Just a thought here, but maybe what we’re really going to see short term is price insensitive/desperate buyers. Short term there is a lot of forbearance and foreclosure moratoriums, so sellers in trouble are just skipping payments. Probably hard to stage & sell even if you wanted to. Who is buying now though? Especially if people aren’t getting a huge discount it would seem that you’d only buy if you were price insensitive and/or desperate. The people raising asking prices might have the right idea. We might well see closings collapse to a very small number, but those people who do buy might be paying a steep premium.
      Now, medium term after this is all done reality will catch up to many of these sellers. But during the lockdown the best strategy might be to hold out for a very low chance of a very high priced sale.

      • Posted by Notcom

        Desperate BUYER ?? Isn’t that contradictive of a collapsing market ?? I guess if the supply disappeared completely – or nearly so – that would leave buyers with very few choices, but the reasons for short-time frame buying – e.g.. just got a new job and need to move – would seem to be falling just as much; indeed I’m guessing there will be a glut of hotel rooms available in the next few months, and could easily accommodate just such people while they house hunt.

    • Posted by SocketSite

      For context, in April of 2009, at the beginning of the Great Recession and six months after the stock market had crashed, home sales were down 34 percent on a year-over-year basis in San Francisco, with the largest year-over-year decline in sales during the recession years having occurred two months prior (which was down 37 percent).

      • Posted by Notcom

        Of course people weren’t also required to ‘stay home’…though no doubt many wanted to !!

        • Posted by sfres

          Yes, this is my point. We haven’t even been able to go to a store and buy a pair of shoes for the last five weeks. Yet a fair number of homes are being listed, going into contract, and closing. I would have thought all that would grind to close to zero. Astonishing that the activity is as high as it is, and a place like the Miraloma home I mentioned above closed up 40% in a few years after it was listed at pretty close to the 2017 sale price. All surprising and odd to me.

        • Posted by SocketSite

          Keep in mind that private showings are still possible (and happening). And it’s private showings, not open houses, which typically move homes. Regardless, sales started trending down prior to the COVID-19 hit while inventory levels had hit a 9-year high.

      • Posted by scurvy

        Also for context, 60k San Franciscans have filed for unemployment already. The peak in 2008-2009 was 55k. Another 40k are expected to file in the next 2-3 weeks.

        This thing is just getting started and many will be listing fancifully for a 2008 real estate market.

        [Editor’s Note: Bay Area Employment Dropped by at Least 77,000 Last Month]

        • Posted by Kyle S.

          I doubt the intersection of “people who are filing for unemployment due to a COVID-19” and “people who are looking to purchase San Francisco real estate” is anything close to a circle. The demand curve will take a substantial shock, but those hoping for real estate to crater will be upset by the realities of our area’s highly stratified income regime.

          • Posted by wilson

            Income has been stratified in the bay area for a while now. I doubt that your intersection was close to a circle back in 2008 either. It’s not just retail being laid off. Many startups and professional companies are shutting down or laying off.

            And every piece of RE is owned by someone. Renters not paying rent squeezes owners with mortgages to pay. My friends who have been AirBnb-ing to help with their mortgages have seen that go to zero.

          • Posted by scurvy

            “And every piece of RE is owned by someone. Renters not paying rent squeezes owners with mortgages to pay. My friends who have been AirBnb-ing to help with their mortgages have seen that go to zero.”

            Wilson gets it. Investors own rentals for income. Without jobs, people won’t stick around to pay rent. Without income, investors will get hosed. Things will get sold whether they want to sell or not. A large portion of real estate income these days depends on leverage and cash flow. No cash flow means no dough.

            Also, there will be lots of tech people, accountants, doctors, nurses, etc laid off. Haven’t you seen what’s happened to medical foundations and business?

            As someone much smarter than me once said, when the stuff (clean) hits the fan, the correlation of everything goes to 1. You sell what you can to stem losses and raise cash for the next go-round. If anything, hasn’t the recent spate of events shown this pretty clearly? Oil, gold, equities, commodities, etc.

          • Posted by wilson

            Nationwide 6.4% of all mortgages are already in COVID-19 forbearance plans. Skipping mortgage payments (and rent for renters) removes a short term problem, but it is good to keep an eye on this because payments deferred now are going to be distress later

    • Posted by tipster

      The 2017 public document recordings are somewhat unusual, and perhaps reflected someone moving their prop 13 tax basis, and the sale price got picked up from that. Doesn’t look like a vanilla sale.

Add a Comment

Your email address will not be published. Required fields are marked *

Recent Articles