For the eight month in a row, the National Association of Realtors has lowered their annual sales forecast for existing homes across the nation. And the latest forecast now calls for an 11 percent drop in sales (down from 8.6% last month). At the same time, however, the median existing home price is now forecast to drop only 1.3 percent (versus last month’s forecast of a 1.7 percent decline).
“The forecasts signal the housing decline is deepening and the market isn’t recovering. Mortgage lenders such as Countrywide Financial Corp., the largest, and Wells Fargo & Co., the second-biggest, have raised standards in reaction to a surge of foreclosures, Donald Kohn, Federal Reserve vice chairman, said in an Oct. 5 speech in Philadelphia.”
U.S. Existing Home Sales May Drop to Five-Year Low [Bloomberg]
JustQuotes: NAR’s Monthly Moving Target (September Edition) [SocketSite]

43 thoughts on “NAR’s Monthly Moving Target (October Edition)”
  1. I highly doubt the median will show a drop for existing SFRs around here, October to September. I am now oh for four in the last three weeks of trying to get my clients something for a reasonable amount over asking …

  2. fluj,
    how long are you going to let them sit this out? how bad to they want a place in the city that you find them to be worth bidding on? if it’s turnkey and in a nice hood, i don’t see the prices coming down like everything else in the country.

  3. This being October, at least we only need to see two more downward revisions from the NAR this year. First there was no bubble, then the bubble was contained, now the containment is spreading.
    On the local front, first California was immune, then coastal California, then the Bay Area, then San Francisco. Now it seems that only certain parts of San Francisco are still immune (any house fluj seems to approach skyrockets in value instantly). Wonder what will still be immune by this time next year?

  4. These are damn near total fixers that they’re going after. They want to earn equity and get some semblance of a good deal. Nothing doing! And the nice homes, in nice ‘hoods? No chance.
    A friend of mine was in town recruiting Stanford grad students for a NYC hedge fund yesterday. He said Manhattan is the same way. There are isolated pockets around it that are doing great still. Nicer Fairfield County (where he lives), desirable Brooklyn, Riverdale — all still performing strongly a la Berkeley, nicer San Mateo, Marin. But Manhattan is cruising, he said. Just like SF.
    Used condos and slightly screwed up houses are the only properties to get good deals on around here, period.

  5. Dude, I’m pretty tired of your armchair baloney. You obviously aren’t trying to buy SFRs in a neighborhood where there aren’t occasional stray bullets. Everybody knows what’s going on except you, it seems.
    Again, I want the change to come. Bring it on. Where is it tho? you don’t get to holler “sea change” for two years and still be correct.

  6. I agree 100% with fluj. The bay area is totally immune and will never ever experience decreased housing prices. Only the extremely wealthy live here, and they are so separated from the rest of the nation that housing prices 5 miles away won’t effect us. Granted in a regular economy, a global trend in housing prices eventually effects all areas because that’s how demand works – but this is the Bay Area and it’s not part of the global economy. We are basically an independent Republic and we’ll strive forever with 30% year of year housing price growth for eternity.

  7. Smarty, you’re SARCASM-TASTIC baby. Who loves ya? I think I just had a sargasm!
    Don’t put words in my mouth, OK?

  8. Sorry fluj – guess the SocketSite thread above is armchair baloney as well – because properties in nice areas aren’t stagnating on the market and seeing their prices reduced?
    Regarding the sea change, I do get to holler for 2 years, because real estate moves in cycles. We had a 5-year boom, now we’re in year 1 of the down cycle.

  9. Lol. You’re willing to grasp at anything. Read my response to the post above. Three of those examples display greed, nothing more. Bay street though — at this point somebody could make a decent buy on that one it seems.

  10. All you have to do to see how Bay Area has performed in the past compared to the national trend is Chart the CSI for the Bay Area vs. the Ten City Composite, like this …
    http://www.papereconomy.com/CSI.aspx?id=CSXR|SFXR&yoy=0
    and if you think somehow SF proper is ‘immune’ or ‘bubble proof’ I suggest you read some of the Data Quick press releases from the mid 90’s, like this one.
    http://dqnews.com/AA1995OFA06.shtm
    California Homes Being Sold at a Loss
    by Real Estate Analyst John Karevoll
    June, 1995
    Resale houses
    Sales counts & loss percentages
    March-May 1994 and 1995
    Mar-May Loss Loss
    County All Sales# Pct. 95 Pct. 94
    San Francisco 1,026 16.2 pct. 24.0 pct.

  11. “Immmune” — not anything I’ve said.
    But do go try to buy a nice house, anywhere in the city that’s safe, if you don’t believe me.

  12. And all you have to do is go to open houses in desirable areas to see that the prices/demand have not thus far been affected much by the national trend.
    So you see, i think like most internet arguments, both sides are right! Prices CAN fall in San Francisco, and prices HAVE NOT FALLEN San Francisco.

  13. So just to verify, and not quote anybody out of context, the segment of the local market that’s still hot is just Single Family Homes, not condos, and only in northern areas, right? Because the bulk of the city’s SFRs are in places like Sunnyside, Excelsior, Bayview, Parkside, Glen Park, and Sunset. And I think we’ve already agreed that most of those areas (excluding the inner Sunset and nicer Glen Park) have lost value. I just want to educate myself, since everybody seems to know what’s going on besides me. Thanks.

  14. No. In my opinion, if it is a nice area, citywide, and a flawless property, it is still selling for big bucks without an appreciable hit. Mission Dolores, Castro, and Glen Park on the north side, are seeing some of the highest prices ever. The Inner Sunset too. Richmond too. Noe, still. North side of Potrero, desirable Bernal. Anywhere central and not screwed up (i.e. an irregular lot, bad floorplan, etc.) are cruising along.
    [Editor’s Note: That almost sounds like a real estate flight to quality in San Francisco (which we first called about 18 months ago).]

  15. “No. In my opinion, if it is a nice area, citywide, and a flawless property, it is still selling for big bucks without an appreciable hit. Mission Dolores, Castro, and Glen Park on the north side, are seeing some of the highest prices ever. The Inner Sunset too. Richmond too. Noe, still. North side of Potrero, desirable Bernal. Anywhere central and not screwed up (i.e. an irregular lot, bad floorplan, etc.) are cruising along.”
    In Summary, awesome places in awesome neighborhoods with zero sign of “non-awesomeness” still cost a lot of money. Thanks for the insight.

  16. And THANK YOU, Spencer, for the cynicism.
    To refresh your memory, or in case you didn’t read it (more likely) Dude said “northern areas” and I responded. The end.

  17. See, now this one, Fairmount … it’s pushing the envelope, isn’t it?
    It’s still on the market because of the following. Only six or seven houses have ever sold for more money in Glen Park. All of them were bigger, save one. And that one was Digby st., which I remember because it was mindblowingly beautiful. I bet it will sell near its pricepoint. Not sure about over, tho. Maybe a little less.
    It looks great tho. Did they stay inside the envelope or did they blow it out? seems as if they did the former, sight unseen.

  18. Well, doh, I just figured out I could use sfarmls.rapmls.com to see for myself it was still active.
    Issues:
    (1) View from main level potentially obstructable by downhill neighbor;
    (2) Need to be stunt car driver to use garage;
    (3) Can’t build any equity, every inch is perfect, this is as beautiful as the existing structure will ever be;
    (4) bedrooms on lower level feel like they are “lower level”
    So, not a pure play pimped-out Noe 4 br, since it’s south of 30th (though some might consider that a plus). The day I was there the place was swarming.
    More to my price range, I think Dude found a real interesting listing further south.
    http://www.137otsego.com
    I don’t know that block, but that area between San Jose and Alemany bears watching. Not nearly as sporty as when you cross Mission or Geneva, plus walk to BART/J church.

  19. Glad to be of service. I like this place as well – generally clean, despite the kitchen being old, fully detached, close to BART – it’s got a lot going for it. As for the area…I personally prefer the other side of 280, but there are some really nice places here. Between us, I think $700K is still high.

  20. Agreed, Dude, it is too high. But this area – Mission Terrace – is below the radar and is more susceptible to get hammered pricewise. Noe Valley and those glamorous points north won’t. Even if they do, half off of infinity is still infinity. Glen Park and Bernal Hts could get interesting depending on the length of the downturn. Both definitely above the radar.
    And that kitchen, well, you can gut it without guilt.
    Another bonus, no gang named after this neighborhood. Even Digby is a little close to Addison for my taste. Fluj, do you recall the address of the property you mentioned? I can’t believe I missed checking it out, at least.

  21. Fluj is funny. Seriously. funny. The preponderance of evidence and data all point against him. This comes back to the point that it is best for the N.A.R. to not provide any granular data to keep the market one of anecdote not data. It will always always be easy to cite a couple of unnamed anecdotes about how hard it is to buy in San Francisco and how SF is its own market and then call others who don’t share your view full of armchair baloney. I like the discussion though. You vote with your dollars. Renters point to all the evidence that housing is falling apart. Owners point to evidence that housing is still strong. Makes for a fun discussion. Realtors want/need to keep this thing going for as long as possible– not just for commissions and business– but because they are trying to sustain a way of selling houses and a commission structure that will change fundamentally over the next five years. Efficiency making is coming, albeit slowly and fought tooth and nail by the N.A.R.

  22. Constant realtor bashing — it’s par for the course around here. I could care less about trying to convert a bunch of sideline dwelling sourpuss armchair economist bears. Watch October’s statistics when they come out. They will show an increase from September.

  23. It’s somewhat ironic to criticize citing “data and evidence.” It almost serves to illustrate the point that the N.A.R. wants as little local/granular data out there as possible. Let’s keep this a market of anecdote so we can keep spinning tales . . .

  24. So snidely dismissive, always. One note. You know it’s much more difficult to write humorously and inoffensively, right? Anyone can type out a dis or three for a little spot of shadenfreude. Try disagreeing without being meanspirited for once.
    The four offers I wrote for a client in the past three weeks, are reductively dismissed as anecdote. Is that not a small data subset?
    Bears on here love to seize on items posted by the editor as evidence, yet simultaneously disregard other anecdotes as, well “anecdotes.” It’s puzzling.

  25. “The four offers I wrote for a client in the past three weeks, are reductively dismissed as anecdote. Is that not a small data subset?”
    sorry, but as far as i can tell you haven’t provided one iota of data much less a single solid anecdote. try posting addresses, listing/selling prices, sales history and comps for all those offers/properties.
    it’s not puzzling, “trust me it’s happening” is a weak argument and should be dismissed. period.

  26. Thanks for info on 46 Digby. I am pretty sure I’ve been to a garage sale there a few years back. Shows the high finance circles I move in.
    CAR is joining the fun now too. “State’s housing market agony predicted to deepen next year”
    http://www.sfgate.com/flat/archive/2007/10/11/chronicle/archive/2007/10/11/MN5ISN7GA.html

    “This is the weirdest downturn in the history of California,” said GU Krueger, vice president at Irvine’s IHP Capital Partners, one of the largest U.S. investors in residential development. “Most previous downturns were driven by super-high interest rates or very weak economic fundamentals. This one is neither. It’s driven by prices getting ahead of incomes and by the drying up of financing that was making the run-up in pricing possible.”

  27. 755 Sanchez, $1,084,000 LP. Wrote at $1.205M. Sold for $1.465M.
    4363 24th st. $1.195M LP. Wrote at $1.250M.
    Sold for $1.35M
    2033 Bush st. $1.329 LP. Wrote at $1.250M
    Pending
    409 Clayton $995K LP. Wrote, one day after it hit the market, for $1.15M
    Pending

  28. Sorry folks for putting in the exact same quote that BadlyDrawnBear did earlier this morning. I guess I wasn’t plugged in early enough!

    Sanchez went for 381k over asking? Zillow says sellers paid 285k total in 1992. Buy low, sell high, location, location, location, these sellers are clearly masters of the game.

  29. You can use statistics to prove anything…18% of people know that.
    Topically, fluj blasts the bears because we point to a few overpriced properties, which have been reduced, and erroneously claim the market is coming down.
    Couldn’t find data on all his postings above, but 4363 24th and 2033 Bush were both listed and sold for $/sq. ft. BELOW the norm for the current market there. So my counter is that if overpriced listings getting reduced do not indicate a weak market, then underpriced listings getting overbid can’t indicate a strong one. Furthermore, if you look at the average $/sq. ft. selling prices in the neighborhoods fluj lists above, they’ve fallen since 2006. So people selling today are getting less per property than in 2006.
    I’m not saying fluj is wrong…I’m saying the market is definitely off its peak and trending downwards.

  30. Allright Dude, steps up to the plate with real research again.

    How far below average was 4363 24th St.? Dumb question, how do you find the average PPSF for a given neighborhood or zipcode? I don’t have the PPSF fluency that seems typical on this board, but I’m working on it.

    BTW, I would expect a house on 24th to be at a discount to the surrounding area. Plus, it’s near, ahem, FOUNTAIN. I recall reading, quite recently in fact, that that is the worst area of Noe Valley. 2 out of 3 Dentists agree that 50% of all properties must go below the median price.

  31. Of six single family homes sold in Noe Valley proper over the last month, the average PPSF was approx. $863. 4363 sold at $830 psf, slightly below that average. The high PSF was $1096 for 4455 23rd while the low was just 555 for 780 Elizabeth. All six homes sold for over “asking,” but who knows if the prices were lowered at some point.

  32. “2 out of 3 Dentists agree that 50% of all properties must go below the median price.”
    Even more shocking, research indicates that half of the population is below average.
    Property Shark has $/sq. ft. for zip codes. Like median price, this number can be skewed by one outlier property selling for much above or below comps. So it’s another imperfect indicator. But the general trend I’ve seen is that $/sq. ft. is falling throughout the city (and yes, I know people can show me examples of the opposite – I’m saying “general” and “across the city”).

  33. Hard to believe this was a bargain property:
    http://www.780elizabeth.com
    Sounds like lower level not that nicely finished but included in the square footage, could be throwing off the equation. Thanks for the update, and I’ll start checking out propertyshark.

  34. The property shark data is really odd. It seems like it would be a useful tool, but some of it is terribly inaccurate if you don’t subscribe.

  35. All of these properties were fixers. They’re not gonna stand up to $psqft scrutiny. Each would cost at least 400K to fix up. Factor that in.

  36. Hello, Dude?
    You can indeed use statistics to prove anything. Going to $Psqft on something you know absolutely nothing about would be an example of that. You’re strictly out of pocket, Dude.

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