Having hit a 9-year high in the absolute last week, the number of homes on the market in San Francisco has continued to climb and now totals 1,140, representing 60 percent more inventory than at the same time last year and 110 percent more inventory than in 2015 as listing activity across the city continues to outpace sales.

At a more granular level, the number of single-family homes currently listed for sale in San Francisco (340) is now running 40 percent higher than at the same time last year while the number of condos (800), which tends to be a leading indicator for the market as a whole, is currently up by over 70 percent.

The marked jump in inventory levels shouldn’t catch any plugged-in readers by surprise. And once again, keep in mind that inventory levels typically decline from June through August and then peak in October.

Comments from Plugged-In Readers

  1. Posted by Oscar

    I’ve read all over socketsite that listing prices are on the decline but it really hasn’t felt that way. I’m still patiently waiting for that to happen.

  2. Posted by James

    How much of this inventory is pent up supply given that we have missed the spring market?

    • Posted by tipster

      Shouldn’t there also be an equal amount of pent up demand? I’m only seeing 60 sales this past week, with 200 listings, in a month in which inventory usually falls. If it were all pent up supply, there wouldn’t be 70 price reductions each week.

      154 Alhambra reduced by $200K. 28 Carl -$100K. 380 Lexington -$205K. 338 Main 14C -$195K. Those are just a smattering from this past *week’s* reductions alone. 2837 Greenwich reduced by a million dollars since April.

      260 King street 903 currently priced under its 2015 sale price. 663 Marina Blvd came on yesterday just trying to get their 2015 sale price plus selling fees as their opening ask.

      It’s brutal out there for sellers, and inventory went up by 300 in the last 4 weeks when it usually falls. Meanwhile rents are tanking, placing buyers in no hurry, and which will soon cause even more investors to start fixing up their formerly rented properties to sell after a few months with no takers at rents that don’t involve a monthly loss, and that will only put accelerating downward pressure on the market.

      And the PPP money, stemming the exodus, hasn’t even run out.

      • Posted by sfres

        Brutal for sellers? Maybe one would reasonably think that would be the case, but it certainly does not describe reality at this point. Given that we’re still largely stuck at home and in the middle of a pandemic, I remain astonished at how homes continue to move. Take 620 Baker #5. Pulled as we sheltered in place, then listed on May 20, in contract two days later, and closed in four weeks. For $1,425,000 for 1100 sq ft after selling for $1,330,000 2 1/2 years ago. Buyers looking for huge bargains, good luck. I hope you find it, but I wouldn’t bet on it. We’ll see how things progress in the broader economy, but so far things have remained astonishingly strong.

        • Posted by Chris G

          Completely agree, I think June’s average and median sold prices for SFH will be another all-time-high, I am really surprised with how well the market has held (and advanced in some instances)

          • Posted by SocketSite

            As we noted last week, the “median/average” sales price stats over the past couple of months have been dramatically skewed by an uneven drop in sale volumes (i.e., driven by a change in the mix).

            And as always, while movements in the median and average sale prices are a great measure of what’s selling, they’re not necessarily a great measure of changes in value, especially when sales volumes are down.

        • Posted by tipster

          And in just the last few hours, 1917 Stockton down by $200K. 241 Telegraph down $200K. 33-37 29th off $200K. 922 Minnesota reduced $100K. 4312 23rd Street -$100K. 927 Hayes reduced and now listed for $100K under its last sale.

          72 Macondray Ln #4, down by $100K after no takers for 6 weeks, and if it sells at asking, will represent a $35K net profit over its 2013 sale. I’m sure the owner will be “astonished” to realize almost all his profits since 2013 have evaporated and the PPP money keeping thousands of startups alive, has not even run out.

          • Posted by sfres

            Crazy, huh? Or look at 1299 Bush St #2. Sold for $570,000 in 2015. Just closed at $778,000. Listed, in contract, and closed in the middle of a pandemic. 36% higher than the 2015 price for a 712 sq ft 1 br 1 ba condo at the edge of the tenderloin. We’re just playing anecdote vs. anecdote, but the broader market numbers sure indicate one would be far better positioned being a seller than a buyer right now. And the NASDAQ is back at all time highs. We’ll see what the future brings. Perhaps, home prices should be falling, but claiming it’s already all crashing down and brutal out there for sellers is simply to ignore the evidence.

          • Posted by SocketSite

            We’ll assume you meant 1299 Bush Street #602 (which was actually an off-market transaction in 2015). If so, keep in mind that the 712-square-foot unit one floor below (#502), which sold for $757,000 in May, traded on the open market for $525,000 in 2011. And the 711-square-foot unit one floor above (#702) sold for $850,000, or roughly $1,266 per square foot in January of last year.

          • Posted by tipster

            Couldn’t find a #2. There’s #201, failed to sell after almost a year. There’s a #302, also 712 square feet that sold in 2011 for 573K. So your unit sold for the same price in 2015 that #302 sold for in 2011? Really?

          • Posted by sfres

            Yes, 1299 Bush St #602. Thanks for the correction. Sold for $570,000 in 2015. Just closed at $778,000. Looks like it would have sold for an even bigger gain a year ago?

          • Posted by SocketSite

            Again, unit #602 traded off-market in 2015, at a price which was anomalous to the units above and below. But you’re right, it does looks like it would have sold for more 18 months ago (as would have most properties in San Francisco).

          • Posted by wilson

            “Looks like it would have sold for an even bigger gain a year ago?”
            “is simply to ignore the evidence.”

            That’s the thing here. It looks like there is some question about the validity of the data point you picked. But even if it was a true 36% market value appreciation over 5 years how would that be evidence against market weakness in the last month or two?

            If you acknowledge that the market was already trending down over the past year pre-COVID and now post-COVID inventory & price reductions are up, rents are dropping and cellphone mobility data shows people exiting the city then I’m not sure what evidence you think 5 year old sales will provide against that.

        • Posted by filbert

          Your 620 baker cherry pick comes out to a mid 2% annualized return. Astonishing! When the best cherries the bulls can pick are in the 2’s, thats not a strong market.

          • Posted by sfres

            The “bulls”? Seriously? I just pointed out the patent fallacy of the claim that the SF housing market is presently brutal for sellers. For the record, I went about 75% cash in the markets late last week. Would have gone 100% but the capital gains tax on the portion I’ve kept in the market would have been awful. if I miss further gains in the next year or so, I’ll live. I’m keeping my SF house.

      • Posted by Brahma (incensed renter)

        tipster wrote:

        Meanwhile rents are tanking, placing buyers in no hurry, and which will soon cause even more investors to start fixing up their formerly rented properties to sell after a few months with no takers at rents that don’t involve a monthly loss, and that will only put accelerating downward pressure on the market.

        Much as I’d like to see this happen, I doubt it will. Investors have and will be able to take advantage of small-business loans, even if they don’t have a legitimate business, like those who buy properties that would otherwise be covered under rent control and turning them around with a few nominal improvements and advertising them as short-term rentals on sites like Airbnb. Owners of investment properties with mortgages can also seek forbearance if they can’t pay their mortgage payments due to loss of income related to the coronavirus.

        If and when a downward spiral gets going in earnest, I’ll be the first person to take my hat off to you and say you called it, but given the plethora of options available to owners, I don’t think it will happen.

  3. Posted by Homeowner-1

    I think people forget that a lot of San Franciscans are now unemployed and the monthly mortgage and property taxes are coming up soon.

    • Posted by Brahma (incensed renter)

      I don’t think people have forgotten that “a lot of San Franciscans are now unemployed”. I think that they are assuming that the overwhelming majority of unemployed San Franciscans don’t have a monthly mortgage or property taxes because they don’t own property. And that’s because many, many S.F. residents are renters and the folks most likely to have lost their jobs also happen to be in the set of residents most likely to be renters.

      • Posted by wilson

        Every property has an owner. It doesn’t matter that much if the owner is the occupant or not. A rent or airbnb payment that isn’t being made is a hole in the actual owners budget and may often times cause a problem with their mortgage.

        There is a lot of kicking the can down the road with mortgage and eviction forebarences though. But unless this debt piling up is forgiven, it is going to come due sometime.

        • Posted by Brahma (incensed renter)

          Sure, every property has an owner, but it does matter quite a lot of the owner is an occupant or not. If the owner is a landlord holding their property as a separate business entity they can just default on their mortgage or have the separate entity declare bankruptcy if the unpaid rent makes too much of an impact on their personal finances. If the owner is the occupant and the property is their sole residence, defaulting would mean losing their home, so the owner would be much more likely to liquidate other assets first in order to pay the mortgage payments.

          The WSJ ran an article recently about the travails of property owners and speculators who bought or leased real estate in leasing those properties at above-market rates on Airbnb. A few of the illegal hotel operators quoted in the article just matter-of-factly said they were defaulting. They might be a little sad and a tad poorer on paper, but they’ll come out of this alright.

        • Posted by wilson

          Sure, if it gets to a point of desperation people will usually fight harder to keep their home then they will to keep an investment property. But with all the forbearance we aren’t at that point. Also, since so many SF properties are not owner occupied this would actually point to more inventory pressure.

          The point is you cant discount the huge spike in unemployment because many of those people rent. All that income that was going to pay for housing one way or another has disappeared. And that is going to have an impact.

  4. Posted by taco

    I think it is wrong to assume the unemployed are the same who can buy property. It has hit service inudstries far harder than anything else.

  5. Posted by ExSFLandlord

    Price reductions caused by?? Some would say it’s, “just part of a cycle”. But maybe it’s different this time.

    How about terrified sellers fleeing social unrest. How about seeing first hand roving mobs defacing and destroying public and private property. How about reading that their politician’s are going to raise taxes. Local politician’s are handing out tents to the homeless. Seeing with their own eyes a city in decline. How about reading that their District Attorney is releasing convicted criminals back onto the streets….just what mom’s want to hear. A growing homeless population filled with drug users and mentally unstable people and a city unable to cope with the growing social health needs of these folks. Politician’s who feed into the problems seemingly unaware of the reality on the streets.

    Watching a tax base evaporate before their eyes, i.e. the convention business and tourist visitors avoid San Francisco.

    I’m guessing that the sellers are reading the WSJ and watching other news sources other than CNN and MSNBC. I’m guessing they see what’s going on with their own eyes…..sort of a daily reality check. Watching roving mobs defacing private and public property, disrupting daily life, blocking traffic, auto brake in’s etc….some might say…just another day in San Francisco.

    I’m only guessing that all the above might be having a psychological effect on those with the economic means to leave San Francisco quickly and find a home in the burbs where they believe they are safe from all the chaos and civil unrest. I’m only guessing the smart money or maybe terrified moms are willing to sell at any price just to get out of San Francisco. Let’s see how the “summer of love” works for San Francisco. Those who are paying attention are seeing how well it’s working in Seattle.
    Read name link for more perspective on the subject.

    • Posted by Notcom

      Naw: It’s just part of the cycle
      But thanks for the link! I’ve not been reading ‘TMIN’ much since they cut back their sports coverage.

    • Posted by CoinCounter

      Anyone as risk adverse as you describe would have never moved to SF in the first place. You’re describing the existing residents of a gated community outside Dallas. Self selection effects matter a lot!

    • Posted by The Milkshake of Despair

      That TMIN website seems alarmist to say the very least. Most of the stories seem to be about some sort of catastrophe about to occur: earthquakes, disease, nuclear war. Maybe they’re just extending their alarmist perspective to urban living?

      • Posted by Notcom

        Well, CA has a lock on two of these, so perhaps it’s some kind of “buy two catastrophes, get a third free” special.

        That having been said, the Bay Area in general is showing stress; take retail: today it was announced the Sun Valley (Concord) JCP is closing; a few weeks ago it was the Stoneridge (Pleasanton) Nordstrom. None of these is an isolated event. Penney’s is a mess and both chains are in mass closing mode; but the SV store was reported only a few weeks ago as being the top performer on the West Coast, and the Nordstrom closing is the second (of the chain’s small number of BA stores) in as many years. Sure you could argue this is just a reflection of the shift to online, and that the BA is over-represented is a sign we’re in the forefront of that shift, but the reality is these are – were – key anchors to major sales-tax generators and community assets. Nothing…nothing tangible… is stepping in to replace them.

        • Posted by sparky-b

          Target is taking the Stonestown space, is that nothing tangible

          • Posted by tipster

            Holy tax base loss, Batman, we’re trading Nordstrom for Target, so they can cannibalize more sales of Walgreens and Rite Aid? Talk about defunding the police!

        • Posted by Plugger

          If JCPenney’s in Concord closes, it’s a sure sign of a collapse in 3BR SoMa condo prices.

          • Posted by sparky-b

            Yeah cause big department stores Are the future and were raking in the tax dollars. That’s why they are closing.

            Anyway I was answering to a claim that nothing would replace the closing Nordstrom, something is. Same as the closed Macy’s at Stonestown, it has been closed for a while (no taxes how have the police survived). Not it will be a movie theater, Wholefoods and food court. Big department stores don’t anchor malls anymore. But you know that

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