According to DataQuick, the median sales price for existing homes in San Francisco was $825,000 last month, up 4.4% compared to a revised June ’06 ($790,000) but down 1.2% compared to the month prior. Sales volume, however, was down 10.2% year-over-year (633 sales in June ’07 versus a revised 705 sales in June ’06) but rose 2.8% compared to the month prior (616 recorded sales in May ‘07). And once again, think mix before jumping to too many conclusions.
For the greater Bay Area, the recorded median sales price in June was $665,000 (a revised year-over-year increase of 2.6%) and sales volume was 7,964 (down 26.5% from a revised 10,830 sales in June ’06). At the extremes, Napa recorded a 15.2% year-over-year reduction in median sales price (and 34.4% fewer sales) while Marin recorded a 15.8% year-over-year gain (and 22.7% fewer sales), and year-over-year sales volume continued to plummet in both Contra Costa (down 32.8%) and Solano (down 41.4%) counties.
As was noted, and in another nod to mix: “Bay Area homes continued to sell at their slowest pace in 12 years last month, led by sharp declines in many lower-cost neighborhoods. At the same time, sales [volume] tended to fare much better in higher-priced areas, which helped push the region’s overall median sale price to a new peak…”
∙ Bay Area home sales still slow, prices up [DQNews]
∙ San Francisco Home Sales Drop, Median Sales Price Up (Enter Mix) [SocketSite]
∙ A Little Mix Here, A Little Mix There, Here A Mix, There A Mix… [SocketSite]
Thanks for the numbers. The data is very telling and reflects what many of us know: Prices in outlying areas are going lower, and prices in more better areas are going higher. Put it another way, bifurcation and the well to do, are more well to do, and the less well to do are hurting, which is social injustice.
This whole housing market rise is causing a social uprising. Two 28 year old people making 100K 7 years ago. One buys a 500K property, that’s now worth 1mil, and the other rents. Both are 35 now, and their incomes are now at 200K. More likely the one who bought is in better financial position the one who did not, but not always the case. This asset explosion has created an unhealthy rift between the haves and have nots, and the haves and have mores.
With the economy healthy, the bifurcation will cause an even bigger rift as prices rise in SF, San Mateo, and Marin and drop in the outskirts. We need to fix this problem before an all out revolution occurs.
This data seems to underscore the validity of “location, location, location”. When the boom was at its height, people scrambled to buy in areas they never would have considered otherwise. Now, with demand slowing, established better-located areas are holding their value, while those whose value and appreciation were based only unnatural demand are slipping.
“We need to fix this problem before an all out revolution occurs.”
Who is “we”,..and what’s the fix?
IloveSF – I think you are confusing a bifurcation in sales volume with a bifurcation in appreciation. The median sales price is getting pushed up by a higher percentage of high-end homes but that doesn’t mean that those high-end homes are necessarily appreciating in value.
From the Times: “The high-end market is far from booming, to be sure. Many houses would still sell for less today than they would have a year ago. But the market has stayed strong enough to catch a lot of buyers and sellers off guard. They keep hearing about a real estate meltdown and then finding a different reality when they go to make a deal.”
The real question is if the “meltdown” will move upstream into some of those “better-located” areas.
IloveSF, I’m not arguing or disagreeing, I just don’t understand. Are you saying houses shouldn’t be different in different areas-that’s social injustice? Or it’s not right that I can’t afford to live in Marin but I can in an outlying area? Or your 28 year olds who rented will join the revolution because they realize they should have bought 7 years ago?
what do you propose to fix the problem? Price fixed houses? I’ll join the Revolution if you guarantee me a house on Sea Cliff Av or Marina Blvd.
You do know that SF isn’t even the most expensive city in the country. Look, if you can’t afford to live in the city, live somewhere else.
On second thought, I am happy some people can afford houses I never will be able to; and happy to live in the greatest city in the country.
Can we just keep in mind the medians are not prices? Just because the median sales price is up 4.4% that does not mean homes have appreciated 4.4%.
The median is deeply flawed and easily misses things like, 6 months ago 600k got me a 1 bedroom one bath and now it gets me a 2 bedroom 1 bath (hypothetically speaking). So while the median might not change much, or go up slightly if for no other reason then inflation helps push it up, that does not mean individual home prices are climbing.
In fact the Case Shiller Index for the Bay Area (sorry they don’t do just SF) shows single family home prices down, how badly depends on your point of view (of course the CSI has it’s issues to).
Michael,
Having looked in the city for the last couple of years, I will have to say the better properties did appreciate, even in this down market. However, I think the reason is remodeling. Higher percentage of the better properties in the city on the market have some kind of remodeling, and they are generally pretty good. That’s different from two years ago.
On the other hand, this bubble “popping” is a little different from previous one. I remember seeing LA data of the last bubble – the high end came down first (and eventually recovered first). This time, it seems the low end is falling while high end stays stable. This is probably due to the sub-prime problem.
Will we see the price doing down for the high end in this cycle? I don’t know.
as sort of a tangent to my previous post, the the median tracks spending and not prices, does anyone know how TICs are tracked as part of the median?
If 3 people each buy a 300k share in a TIC does it get recorded as 3 sales at 300k or 1 sale at 900k?
About the remodeling comment: Just last week I met with a realtor in NYC who relocated there from SF several years ago. He still keeps in contact with agents here, and a fair amount of his client base is San Franciscans moving to NY. He told me his agent contacts here are telling him there isn’t much inventory in the way of well-appointed properties in good condition. If someone is looking for a move-in-ready home in SF, pickings are slim. My experience has always been that I could sell faster and at a higher price if my property showed better than the competition.
I think the median +4.4% in SF actually is masking and understating the price appreciation in SF. The mid-to-high end is up closer to 8-10% imho. I’ve looked at many a home on Sundays, and they are moving, and moving much higher than the median states.
Just to explicitly spell out the issue with median price changes and amplify badlydrawnbear’s point, consider this simple hypothetical situation: say last year 10 houses were sold, 5 for $1.4M and 5 for $600k. This year, 4 of the exact same $600k houses resold for $600k and all 5 of the exact same $1.4M houses also resold for $1.4M for a total of 9 sales.
Last year: 10 sales, average price $1M ($10M/10).
This year: 9 sales, average price $1.044M ($9.4M/9).
So in this example the Y/Y sales volume is -10% but the average price increased 4% even though the houses’ prices were exactly the same. This effect is partly what we’re seeing with the DataQuick numbers. Note I’m using average rather than median prices for simplicity. Also note that the only people who made money in this example were the agents, lenders, etc. ;^)
IMHO for sure the market has strengthened in some segments. The soma loft I sold in 18 months ago, I could sell today for about $50k more (based on similar units in the same building). Over a four year period that the total increase was 41.5%. When I first moved there the area was a ghost town at nights and on weekends. Now you can’t ever find street parking at any time. The soma/sobe area is still changing for sure and overall I think will become more and more desirable.
Higher or Lower moving averages on low(er) volume means there is more volatility in the market.
I still believe that the best properties are selling well and that the less-prime inventory is sitting, or being pulled from the market.
Can you show that same graph but add the overall san francisco inventory number {SFH, TIC and Condos} as a data line please.
I think that might look interesting…
Badlydrawnbear, I think you are precisely correct in that comment.
So according to some feedback I received else where TICs and Invididual TICs are included as a single sale.
It would be interesting to see the median reflected the fact that many purchases in SF are actually comprised of 3, 4, or more separate transactions.
While it would bring down down the median it would also have a big impact on the affordability indicators for the region.
Could it possible make SF seem, relatively speaking, cheap?
And what would it do to those $1000 per sqr foot condos when the perception of SF being ultra expensive, so you just have to pay that price to live here, got blown out of the water?
Badlydrawnbear, I’m not entirely clear on what you have found. I think what you’re saying is that if a 3-unit building is sold as TICs at $600,000 each, that gets recorded in the stats as a single sale at $1.8 million. Do I have that right? If so, you are certainly correct that this would skew the median sale price way high. Given the fairly high number of TIC sales in SF, this would actually make the stats on median price completely unreliable.
There are actually a lot of TICs for sale in the City for less than 400K, and I’ve seen 1BR TICs in the Mission lately for less than 300K. This is just one more reason why the median price isn’t very useful as an indicator of market health; however, it is the one statistic that can so easily be used to convince buyers that they should pay a certain price.
Treating TIC sales as one transaction would also help further explain the really low number of transactions that S.F. posts in a year- besides only 30% homeowners.
Depends on the TIC AFAICT.
Our TIC has an assumable loan and each unit has been recorded separately.
I would think counting TIC’s as seperate units would not be reflective of the true price trend?
For example, if a build was sold for 1M first, then as two TIC for 0.7M later, it actually appreciated. But recording the TIC’s as seperate units would look like decreasing prices.
House A, B, C, D, E sale for: 100k, 200k, 300k, 400k, 500K respectively. Median price = 300K.
Next month, (Same houses) A & B don’t sale, while C, D, and E sale for 50K discounts. (250K, 350K, 450K) Median price = 350K.
Prices can fall and median price can rise at the same time. Hmm…