Inventory of Active listed single-family homes, condos, and TICs in San Francisco fell 4.2% over the past two weeks and is currently running 21.8% under 2008 levels on a year-over-year basis (down 29% for single-family homes and down 17% for condos/TICs) but remains within five percent of listed inventory levels at the same point in 2006/2007.
36% of active listings in San Francisco have undergone at least one price reduction (versus 40% a year ago) while the percentage of active listings that are either already bank owned or seeking a short sale is just over 10%.
The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).
∙ SocketSite’s San Francisco Listed Housing Inventory: 10/13/09 [SocketSite]
Inventory is now at a 4-year low. Can we stop hearing about the alleged ‘housing crash’ that’s supposedly going on in this country and get back to the more important business of gawking at expensive real estate?
Oh goodie then! The crash is over the crash is over! I should expect a steady 4-8% YTY appreciation of my expensive real estate then right? Which house around $1.1 (my budget) will be worth $1.4M in five years? That’s all I need to know folks.
2008 listings just reflected lots of wishful sellers trying to bail out at 2007 prices.
2009 listings reflect people trapped in their homes.
The comparison with 2006 has to be made in the context of a change in demand to identify whether the inventory is “low”. If you believe that,like 2006, anyone with a pulse can qualify for a loan of 8x income, inventory is a bit low. If you don’t believe the 2009 demand is the same as 2006, a comparison with 2006 numbers will lead to the wrong conclusion.
2008’s October peak represents what happened after a very big September scare.
2009 represents the fact that a lot of San Francisco home owners don’t need to sell, and won’t because they don’t wish to take a loss.
*”trapped in their homes” — represents unflagging negative wordplay
I’m happy to believe the “trapped in their homes” theory as its after the fact creation so neatly fits the inventory data, but I’d like to see some proof. surely obtaining the average LTV ratios for a sample of withdrawn listings isn’t an impossibility? if it is 94% or higher I too will race to post on data threads that seemingly good news for sellers data is really the opposite.
Any convenient way to calculate a running months-inventory multiple? The raw inventory number is useful, but it also serves as a Rorschach test. If the inventory numbers are normalized against prior month’s sales, we would have a better sense of the health of the market, and whether it tends to favor buyers vs. sellers.
Also, could you have this lovely new graph available by 9am this morning, please?
This fits with what I’ve been seeing in the open-homes listing of the SF Chron. Not much new inventory coming on the market compared to other years.
I’ll leave to others the speculating as to whether many want to sell but cannot afford to.
The lower inventory is good news to those hoping for higher RE valuations. Lower supply supports higher pricing than you’d otherwise have.
Comparison to prior years is somewhat perilous given the extreme amount of government intervention into the markets in 2009 that was not there prior to this year… however that govt intervention doesn’t seem to be going anywhere anytime soon so it may be the “new normal”. at least until the bond vigilantes show up (if they ever do).
inventory can go down either because people pull their listings or due to sales. the last sales post by socketsite showed that sales were up 17% yoy as of July 2009.
in general, inventory going down with rising sales would be a good sign indeed.
inventory going down with stagnant or lower sales would simply indicate that sellers are giving up trying to sell.
my guess is that it is a mixture of the two.
of course, my typical caveat: this is all dependent on Washington DC. SF RE is not particularly special. It is simply responding to national events, just like it did from 2003-2006/7. DC is the center of SF real estate.
I think, for 2009, people expected prices to fall off a cliff relative to past years, not inventory.
And, yes I do think there is a big, big difference between recognising this as not a great time to sell and being ‘trapped in a house’.
“I think, for 2009, people expected prices to fall off a cliff relative to past years, not inventory.”
Actually, I said back in Jan that 2009 would be boring.
I wasn’t specifically referring to you but regardless I will be interested to see the source,a nd the context.
But anyway, I don’t think 2009 has been boring in the slightest!
the last sales post by socketsite showed that sales were up 17% yoy as of July 2009.
The 17 percent year-over-year September gain was for recorded sales. In terms of listed sales (apples to apples), single-family home sales were down 4 percent (versus the 29 percent drop in inventory) while condo sales were up 37 percent (versus the 17 percent drop in inventory).
Keep in mind the impact of expiring (or what was expected to be expiring) tax credits in the fourth quarter.
Random points:
1. Mr. Debtpocalypse (8:46 AM), unless you are giving a economic class – please try not to throw in terminologies such as “Rorschach Test” or ” inventory normalized against prior month’s sales.” Regular person like myself without an MBA loves to hear your point but finds it difficult to stay interested. I am always impressed with the knowledge and education of the readers on Socketsite but this is really not a forum for economists or aspired economists. So keep it real simple for us simple folks…please
2. No one is “trapped” in their home ! If you lost your job and can’t afford the mortgage or relocated, you would sell it at whatever market price is or let it foreclose. If you lost money in the home but can afford the mortgage and like the home, why would you want to sell ? The ONLY people that are “trapped” are the speculators/investors who bought because he/she thinks there was a fortune to be made quickly and now they are stuck because they have to stay in it for years to come. Even then, you can get out if you choose – just without your original investment or credit or both. You are NOT trapped !
3. Housing Crash – The term “Crash” is being used too loosely. Housing downturn or depression is okay but “crash” to me means a free fall and we are not anywhere near that. We saw “crash” in the 1929 stock market. We saw a one or two day stock market “crash” October 1987 when real intrinsic and underlying book values were thrown aside and small version of it earlier this year on Wall Street. To me, “crash” is when NO ONE would step up to purchase regardless of how low the price was. If a prime one time 3 million Marina 4/3 SFH lists at 395K and no one (including Tall Guy 7:39 AM) would take it, you may have a “crash” on hand.
Keep in mind the impact of expiring (or what was expected to be expiring) tax credits in the fourth quarter
LOL @ this placement
I’ll post the pent up supply numbers tomorrow. Will be interesting to see how many of the current sellers are members of the Coalition of Willing versus Summer Sellers.
The longer I live in the City (going on eight years now), the more confused I am about why people buy real estate here.
Economics started with the assumption that people acted rationally, which economists generally mean in their own economic interest. Real estate in SF is an exception that proves the rule.
There would be world peace and life would be simple “IF” people act rationally… but they don’t. If San Francisco is an enigma, try New York City !
“D”: Why do people buy real estate here? … because they want to live here longer than just 8 years. Nothing irrational about that.
D, your time in SF just happened to coincide with the greatest housing bubble this country has ever seen. The irrationality you have witnessed is by no means confined to SF. People have paid absurd prices here for the same reasons they paid absurd prices in Modesto, Las Vegas, Miami, and so on. If you would have lived just about anywhere else, you’d be scratching your head asking the same question (Real estate in Fresno is an exception that proves the rule). In SF as elsewhere, banks lent money to anyone with a pulse and everyone was certain that prices would only go up from their already absurd levels, so it was a no-lose gambit.
Well, reality is setting in now, in SF just as in other places. We have not deflated this bubble yet, although the air is slowly leaking out, and many in SF and other places continue to act under the misconceptions that fed the bubble. But give it a couple more years.
@sanfrantim
My wife refuses to move out of SF, so I plan on living here for much longer than 8 years. Never in the time I’ve lived here has buying made economic sense, regardless of how long I plan on living here.
I look forward to housing prices dropping in half so that it makes rational sense to purchase. I’m not saying it will happen; I’ll leave the prognostication to others. But that’s what it’ll take for me to buy in SF.
As an aside, I own property outside the city that I rent out.
D – I get not buying, I really do. For me, and many of my friends, the decision to buy was bound up with a decision to put down roots here for the long term, if not lifelong. It is not irrational to link the two.
Not that one cannot be a lifelong renter. I have friends in that category too.
good luck to you.
“2008 listings just reflected lots of wishful sellers trying to bail out at 2007 prices.
2009 listings reflect people trapped in their homes.”
This is the most intelligent post I have seen in years.
The future of the housing market is one of decaying equity, moratoriums, zombified homeowners, and RE being sold/shuffled via the backdoor through auctions.
Obviously no future in being a realtor
Not that one cannot be a lifelong renter. I have friends in that category too.
That was pretty F’n smug. Is this an internal defense mechanism against negative equity???
grrrr. The data doesn’t pan out the way some predicted and suddenly homeowners are all trapped, desperate, under-water, zombified, self-deceiving and defensive. believe what you want if it makes you feel better and good luck to you.
^ hey! Some of my best friends are renters!
Pent up housing supply appears to be holding steady. Currently, 1609 homes are in some state of foreclosure (NODs, NOTS, bank owned) in Ess Eff. This is up slightly from 1603 two weeks ago.
If you want to call it pent up supply you should at least parse with regard to the percentage of NODs that typically move forward. A lot of times people figure something out. NOD is only the first step in the process.
Common practice is that an NOD isn’t filed until 90 days overdue, right? I agree with anonn that it’s relevant information how many NODs typically end up moving forward, but it’s worth noting that NODs usually mean a default in each of 3 months.
Technically, yes, an NOD can be filed when payment is 1 day late, but it usually doesn’t mean that.
EBGuy, are you getting your stats from PropertyShark or something like that?
A lot of times people figure something out.
What they seem to be figuring out, lately, is that in spite of putting down five percent, they are better off letting the property go back to the bank.
controllio, These are extremely noisy stats (duplicate entries, etc.) from Yahoo!RealEstate. Their intent is to show general market trends.
Your link to the marquee lofts is relevant to untold stories of countless people with different scenarios in some way, I’m sure. Another question, do you pare down the NODs, NOTs, and REOs that are already on the market?
The $8,000 credit is going to be extended through April 30th too. I think the intent is pretty clear. Support housing until jobs come back.