Having bottomed out at the end of April, at which point they were down nearly 50 percent on a year-over-year basis, the number of homes in contract to be sold started to rebound in May and turned positive, on a year-over-year basis, last month.

In fact, pending home sales activity is currently up around 40 percent versus the same time last year, which should result in strong July and August sales volumes, at least on a relative basis.

That being said, the rebound in “pent up” sales activity appears to have already plateaued with contract activity having slipped a few percent over the past week. And on a year-to-date basis, pending home sales activity is still down over 10 percent with the peak of the typical spring buying/selling season having passed, driving listed inventory up to near recession era levels.

Comments from Plugged-In Readers

  1. Posted by Pragmatist

    We listed out house at $3.6 and had 23 different showings within two weeks. We’re now closing shortly. There may be more inventory but the narrative that people are fleeing in droves is false.

    • Posted by tipster

      There’s only one pending SFR listed between 3.5 and 3.75, a completely renovated 4/4 SFR with a large view deck listed as having over 4000 square feet for $8XX psft.

  2. Posted by SF Landlord

    My personal anecdote is single family home sales while down from recent years are still robust. The condo market though is pretty slow. Not surprising when people are valuing space and private outdoor yards now more than ever.

  3. Posted by ST

    I put a 2/1 condo in Russian Hill up for rent… got 8 applications in the 2 weeks that it was on the market.. Rented for $100 more than the previous tenants who stayed there since 2017…

      • Posted by ST

        I agree with the “in general” trend… Personally, I would love to take this opportunity to buy a property, but struggling to pull the trigger as it is hard to tell where/when is the bottom…

        • Posted by Some Guy

          Probably sometime in late 2021 or early 2022.

          • Posted by ST

            Because COVID hit different employment sector differently, I wonder if there is going to be a huge wave of foreclosures 18 months down the road….mostly small business owners….

          • Posted by jimbo

            my guess would be mid-late 2021. i wouldnt personally buy anytime before then. Of course, there may be a long buying window, like from 2009 to early 2012 where market stayed near bottom for 3 yrs

          • Posted by sparky-b

            jimbo,

            Spring of ’09 was THE bottom, end of ’12 was the last dip.

          • Posted by SocketSite

            That’s incorrect. While the rate of decline for SOME segments of the market had flattened by mid-2009, THE bottom of THE market in San Francisco was in late 2011, early 2012.

          • Posted by sparky-b

            Well, I have my own metrics and don’t put that much weight into many that are used here. But I should have clarified that. I am speaking of SFH’s for one thing.

          • Posted by SocketSite

            And based on your own metrics, you think prices for single-family homes in the southern neighborhoods, such as the Excelsior, bottomed in 2009? If so, you wouldn’t be alone in having made that mistake (albeit less publicly and despite the benefit of additional hindsight).

          • Posted by wilson

            Isn’t this splitting hairs?
            Look at the Case-Shiller graph and the difference between ’07 vs ’09. And then ’09 to ’12. There’s missing the bottom by a mile and then there’s missing the bottom by an inch.

          • Posted by jimbo

            prices were lower in Q4 ’11 and Q1’12 than in 2009, but only slightly. i look at it as a 2.5 yr bottom

    • Posted by Property Manager

      Same here with listings in the Inner Sunset and Cole Valley. We just listed our recently vacant flat with a price 5% higher than what the previous tenants who moved in a few years ago were paying and got 5+ applications before our first showing. Maybe we should have priced it higher? Some neighborhoods are extremely hot right now.

  4. Posted by two beers

    My anecdotal observation, based on almost daily walks in any combination of the Mission, both Haights, Duboce, Bernal, Noe & Hayes Valley, Alamo Square, SOMA, and north and west sides of Potrero Hill, there is more moving activity now than at any time since ’89, and maybe even WW2.

    The ratio of out to in is about 3 to 1. The ins are largely SFHs and flats. The outs are bailing mainly on condos and apartments. Some of the moves are no doubt cross-town, people moving into larger spaces with yards, or taking advantage of the softening market to move up or move cheaper. But a strong majority of the moves are out of town (maybe elsewhere in the bay or state, but still, out of town).

    • Posted by sparky-b

      You do daily walks in 10 different neighborhoods? Man I got to up my Covid Fitness

      • Posted by markets_arent_a_panacea

        And apparently two beers has been walking 10 diff hoods since WW2!

        • Posted by two beers

          Personal knowledge of ’89, not of WW2, hence “maybe.”

          Where have all the reading and logic skills gone?

      • Posted by two beers

        What part of “any combination of” don’t you get?

  5. Posted by Al Greenspan

    I am seeing astonishing strength in housing markets in several far away areas such as Oregon, Mass, and DC. I don’t understand it. When this virus lockdown began, I really thought we’d see a crash in real estate prices. I figured I’d take a hit on current holdings but that I’d try to buy low.

    Must be the effect of $5 trillion slamming pumping into an artificial crisis.

    • Posted by Dave

      Yeah. A friend’s daughter moved to/got a job as a nurse in Vancouver Wa. Just prior to Covid. Given the near record low mortgage rates she is looking to purchase her first home in the Vancouver area. She has made bids on three and was significantly outbid on each. In two cases the homes sold to people from the Bay Area who did “virtual purchases” – not bothering to physically travel there to inspect the homes prior to purchase.

    • Posted by wilson

      From anecdotes, I think buyers from high priced urban areas are conditioned that properties will be listed significantly under what they will sell for and bidding will be competitive. Also the dollar amounts are so much lower for far away areas vs SF/NYC that a high percent overbid can just be chump change in dollars. The people moving now have a sense of urgency and strongly favor move in ready or nearly so. And there is herd behavior. People hear about the areas that their peers and friends are looking at and focus their search there even though there may be many other desirable areas out there.

      I expect this to die down shortly. The supply of wealthy urbanites leaving cities is much smaller then the number of homes in desirable areas across the US. More so when your timeline extends to allow for major renovations and new construction. Land is cheap and construction is easy across much of the US.

      Someone previously mentioned bare shelves at home improvement stores in far flung areas (but not in SF) and I think that this is a reflection of the demand spike in suburban/exurban areas as much as any supply chain disruption.

      • Posted by Curmudgeon

        Re: home improvement stores. an anecdote from N.H., where my brothers own a building supply business in the Lakes Region (vacation land for Boston residents). They’ve had their best year EVER, as second home owners arrived permanently in March and promptly began doing projects to make their vacation homes function better as permanent homes. There is no longer any pressure treated wood available for decks there has been such a run.

        I hope and trust that this suburban and exurban decampment trend ends soon, because I love cities. But it is very very real.

    • Posted by hy

      Millennials are starting to have children, and at least in my friend group, this has significantly raised the interest in home ownership. And when you consider the impacts of PPP, unemployment benefits, mortgage and rent forbearance, etc.. most individuals have not yet felt any financial impact from the pandemic. Due to this, as long as the financial supports remain, I suspect any correction is going to be a long, slow process.

      • Posted by Jeffrey W. Baker

        I don’t know where this “beginning to” stuff comes from. Sometimes it seems like many Gen X and Boomer people do not understand that Millennials, like everyone else, age at a constant rate of 1 year per year. The oldest Millenials are now 40. 40% of Millenials already have children.

        • Posted by jimbo

          40% of millenials across the country maybe. not in SF. im 45, so i guess in the younger 3rd of Xers. Most of my SF friends just started having kids in the last 5 years. im guessing the average age for 1st children in SF is around 35. the majority of millenials are not there yet

          • Posted by Jeffrey W. Baker

            Your guess is at odds with the data. 69% of first-birth mothers are younger than 35 in San Francisco. This figure is 91% nationally, so yes the age at first birth is older in SF, but it’s not as old as you say.

          • Posted by jimbo

            ok. thanks. it was just a guess. the median is probably closeer to 32-33 then? the median age of millenials is 32. your point is well taken that they are not “just starting”. but a large bolus of them are starting to have children, and maybe more importantly, the kids are getting to school age. (the age many move out of SF)

        • Posted by hy

          You are being overly pedantic. I am a millennial, on the older side, and in the last 2-3 years my fiend group went from consisting of around 5-10% who were parents to around 60-70% parents or expecting. My sisters are a few years younger, and their friend group is closer to the 5-10% range.

          Perhaps a better way to phrase it: City-dwelling millennials are now in their prime child rearing age (the median millennial is around ~32 and that is also close to the median age of first birth in high cost of living areas).

  6. Posted by Chris

    Low interest rates. Feds pumping money into the Stock market to keep it up. It’s a real estate investor’s perfect storm right now to either buy, refinance or sell. It’s almost like we have a real estate investor grifter in charge of the country.

  7. Posted by sparky-b

    Well my search doesn’t go south of 280, so the Excelsior wasn’t taken into then or now. I called bottom on this site in February or March of 2009, check the tape. So I am not just saying it now in hindsight.

    • Posted by SocketSite

      As we said, “while the rate of decline for SOME segments of the market had flattened by mid-2009, THE bottom of THE market in San Francisco was in late 2011, early 2012.”

      • Posted by sparky-b

        I was just trying to help jimbo help ST. ST are you looking in the Excelsior? House or Condo?

        But to the editor what is the metric you are using for that declaration?

        • Posted by wilson

          There’s trying to get bragging rights and then there’s trying to be helpful. You really need to look at the Case-Shiller graph to get a sense of scale. I’m sure there are other metrics, but I doubt that the differences between reputable metrics are all that significant.

          Bottom line is that even if you were right and THE bottom was 2009, missing THE bottom by three years was practically insignificant. Buying (or selling) in 2007 vs 2009 on the other hand had life changing consequences for many people.

          All years are not equal. The graph of any metric is going to have a price axis and a time axis. Practically it matters much more how far off you are on the price axis than how far off you are on the time axis.

          • Posted by sparky-b

            fair point on the bragging rights, so let me try to actually be helpful (although if I am totally wrong it probably won’t help). I think the current rate of decline will continue until September, then there will be a steeper decline when the distance learning for schools/no college football hits home. That will continue until November when Biden wins, it will be flat for a while since it’s winter/holiday time. Then the market will pick back up in the early spring when essential workers start getting vaccinated.

            With the lesser inventory from traditional pulling of houses and not listing come Thanksgiving, I am thinking late October is going to be the ideal time to buy.

        • Posted by SocketSite

          Our model is based on a bucket of metrics, including: sale prices, sales volumes, inventory levels, foreclosure rates and indexed values.

    • Posted by SocketSite

      In which case, and despite the benefit of hindsight, you remain as correct today as you were back then (as to 2009 being THE bottom of the market, which it wasn’t).

  8. Posted by Freeloader

    I co-owned investment property in LA from 2003-2007 and got out just before Lehman. In April 2012 I bought a condo in SF… sure felt close to the bottom at the time and almost immediately after closing escrow felt markets shifting up.

    Looking to upgrade to an SFR but too scared to pull the trigger on a $3M+ place in this market. Also not yet sure whether to stay in the city or head to the burbs. I thought the market was going to dip late last year but haven’t noticed it until really the past 2-3 months, and now think a school-less fall will lead to greater declines in the SF SFR market as techies glee to Marin, Tahoe, and the hills of the East Bay, as many parents we know have already done.

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