“From the mortgage crisis to the plunge in home sales, dark clouds continue to threaten San Francisco’s seemingly endless real estate summer. And yet remarkably, local Realtors I know seem as cheery as ever.”
What’s happening now in the reportedly stormy San Francisco housing market? [SFGate]

32 thoughts on “JustQuotes: Sometimes It’s Simply About The Readers’ Comments”
  1. Speaking of comments, this one is my favorite from that article:
    “mnyounger wrote:
    I’ll admit, this column took a bit of the wind out of my sails, as I am one of the people assuming (nay, “hoping”) that, even though they are insulated to a degree, SF property values will stagnate or decline as part of a nationwide and/or regional downturn.”

  2. McBravio – don’t forget the rest of mnyounger’s comment:
    “However, this “crisis” is still less than 12 mos old – too early to tell what the 5-year effect will be on SF property values. This article doesn’t consider the effect that plummeting property values in the Western states (outside SF) will have on SF residents…what if the bottom truly falls out in Oakland or Seattle or Denver? I can imagine that having a downward pull on SF prices as would-be SF buyers take their money and buy cheaper property elsewhere. Ditto that I think there will be over-construction on these massive condo towers that are going up SOMA. SFRs are almost worth their weight in gold in this city, but that doesn’t mean the rest of the SF market isn’t considerably more vulnerable. My two cents…”

  3. nonanon, I didn’t forget the rest of the comment. I just liked the “wind out of sails” part best.
    Also, I’m not too worried about a mass exodus of SFers to Oakland, Seattle or Denver…

  4. Oh, please. An article that quotes realtors toeing the party line (“over asking,” multiple offers,” “packed open houses”) and then a quote from an analyst asked to comment on the reporter’s foregone conclusion.
    What about the fact that over 30% of the SFRs and condos/TICs listed on the SF MLS are at reduced prices (according to Zip Relaty’s site)? What about the Case-Shiller numbers showing declining prices? What about the fact that sales volume is down about 40% from 2-3 years ago? What about the tripling in foreclosures over the past year?
    I just read that the CEO of some large builder (maybe Toll Brothers) was blaming the press for the nationwide housing recession — likely the worst in history. I guess he can’t blame the Chron.

  5. Most SocketSite readers are not home owners.
    Why are the discussion on whether sellers can sell? The fact is, due to the tightening lending standard, it is harder for buyers to buy than ever
    The NAHB affordability is at 5.7. That’s the lowest number since they started tracking in 91, except Q3 2000 (also 5.7), when the 30-year was in the 8.5% range.
    The problem for buyers is, even if the price really drops (or “continue to drop”, if you prefer to say it that way), it will get harder and harder to buy if the mortgage rate continue to climb. I wouldn’t be surprised if the rate goes back to 8% or even higher.
    [Editor’s Note: Actually, in terms of the average SocketSite reader…the majority (58%) already own (with an average home value of $1,165,000); they have average household incomes of over $200,000 (with the median around $190,000); and three-quarters (76%) consider themselves to currently be in the market for a property.]

  6. I think the commenter mentioned markets in Seattle and Denver with the thought that they may influence SF prices if the “bottom fell out”, not that there would be an exodus to these cities. It is still a far-fetched scenario, who is really going to price their house based on markets 1000 miles away. In addition, the fundamentals are very different for Denver and Seattle than the are for SF. I live in Denver and our prices did not run up nearly as fast or as far as SF’s have. There is no conceivable reason that our market here in Denver would affect pricing decisions in California. That said, if prices start to fall drastically in other bay area submarkets that may have an effect on SF prices, as people may trade living in SF for a cheaper monthly payment.

  7. I for one wonder if your averages have changed in the months since your June survey. For one thing, the Chronicle feature on your site in July probably brought in more than a few fence-sitters, for another, I believe the more “well endowed” you are, the more likely you are to fill out surveys asking about your salary and home value.
    I also wonder if the average home value would still prove to be the same. Then again, that would bring us back to the ongoing debate about whether or not the sky is faling…

  8. Drew,
    I think what the commentor was suggesting is that if the bottom fell out of those markets it would draw potential buyers to those markets.
    I know for myself, as a consultant, it doesn’t matter where I live. I choose to live in SF I don’t have to.
    I realize my sittuation may be a bit unique but I have to admit I do keep an eye on the market of my old home town Chicago, and with prices where they are at there compared to here, I find it very tempting to pick up and buy the home that I want there instead of here and if the market falls there much more I may not be able to justify the expense of living in SF anymore (of course I would probably just buy outside of SF before I did that, but that would still be one less sale for SF proper)
    If others follow my lead and head to Denver, Portland, Seattle, where ever, what effect could that have on SF

  9. The Seattle market is a lot like this one, actually, perhaps better. So can we stop talking about it like the bottom is going to fall out? Go on any Seattle R.E. blog and you will see the same dialogues that we entertain. Nobody knows for certain. Half are sure there will be some sort of correction. The realtors all sing the praises of its briskness. And the people in the mix all say, “Where is this correction, and why do I have to pay 550K to live in Ballard?”
    If you read Carol Lloyd a lot, like I do, you’d know that this is the first article in some time that actually presents SF realtors’ perspective. And yeah, good realtors do make money in up or down markets. The article quoted two individuals, two highly reputable individuals. They both commented that the market is going strong, still. This is not mutually exclusive to being able to thrive in a down market. These two realtors are not grasping at straws. This is not spin. These are not calculated soundbites. This is what they really think. And I think it, too.
    Just look at the briskness of these new condo sales that are displayed so prominently on this very site. We are a long way from tanking. The question is, “Why?” And that was the point of the article.

  10. It’s all about the inventory (as the article states). There are still too many 2 lawyer or 2 MBA couples who earn $400,000 combined salaries whose parents are telling them to buy now before they’re priced out. And they all want to be IN the city.
    The high rise sales that are discussed here have pretty much come to a halt in Chicago. I’m surprised they’re still selling the overpriced one bedrooms in SF. It’s not like you’re raising a family in one and you can rent for less.
    In Chicago, I recently visited a newly announced Streeterville project that is considered a “luxury” building with views of the Lake. They’ve been advertising in the Wall Street Journal (among other places.)
    In the first four weeks of sales they sold only 6 units out of 250. In Chicago- they sell the units before they start constructing the building- and I can tell you just based on the empty salescenter that the building will never be built.
    We have several hundred million dollar homes available in the best Chicago neighborhoods just sitting there – waiting to sell. Some have been on the market for over a year already. They’ll be reduced further by next spring.
    But it’s all about the inventory.
    I also think it’s mainly psychological. Does anyone know someone who has actually lost money on a property in SF? We only hear the stories here about some friend who just sold and pocketed $200,000 after owning only 2 years etc. etc.
    No one is on here from Vallejo (granted- totally different market)- where there are over 100 bank owned properties on the market and something like 200 homes sitting empty and more to come. EVERYONE in Vallejo knows someone who has lost money on a property (or has been foreclosed.) You think they want to buy in this market? Of course not. That’s why sales have plunged there and inventory is increasing. They can’t give the homes away in Vallejo.
    When will the psychology change in the city? That’s the million dollar question.

  11. “[Editor’s Note: Actually, in terms of the average SocketSite reader…the majority (58%) already own (with an average home value of $1,165,000); they have average household incomes of over $200,000 (with the median around $190,000); and three-quarters (76%) consider themselves to currently be in the market for a property.]”
    It is not a random sample. People who are well off are much more likely to respond to your survey. You can only say “the majority of the ones who responded already own….”
    It didn’t change my argument. The market is very tough for buyers and may get tougher, even if the selling price gets lower.

  12. Kaya: I agree with your comments about the survey results and made similar statements the last time they were used. I think the issue is that the typical Socketsite visitor and chronic Socketsite poster (who determines the tone of discussion on the site) are two different animals.

  13. I’m also a fan of Carol Lloyd’s stuff and have found her articles to be well balanced.
    The article focuses on Lake Street. Instead of Lake Street, though, you could also take a walk (or maybe drive) down Head Street or Ramsell Street in Oceanview. Half the homes for sale there are REOs or short sales going for thousands, sometimes hundreds of thousands of dollars less than last sale. Same goes for many streets in Excelsior, Bayview, Portola, Visitacion Valley, etc. It’s even beginning to spread to Parkside and Sunset.
    No, these aren’t “prime” areas. But according to mapquest, they are in the city of San Francisco. I guess my point is that, as SocketSite has already pointed out multiple times, the market is bifurcated. Some parts of the city are still going strong while others are floundering.
    When will the psychology change? Who knows. But I’d wager that most people buying today are those who are rolling bubble equity and keeping the same payment they’ve had for 5+ years. That can’t go on forever.

  14. When mom and dad and fluj start piling in, you can tell you are in the last stage of a heck of a bubble. Sit back and relax – and above all “enjoy the show”

  15. “I think the issue is that the typical Socketsite visitor and chronic Socketsite poster (who determines the tone of discussion on the site) are two different animals.”
    seehsee, gotta give you a lot of credit for that quote — particularly the choice of “chronic” — priceless – made my day!
    Even had to pull out the dictionary to improve my apprecation of potential meaning “1. Of long duration (yep, some of us write books!); continuing, constant (gosh sometimes it’s like just two posters back and forth on one issue they can neither let go — for hours!) 2. Prolonged; lingering (like someone tossing bait and waiting around to see if anyone takes it), as certain diseases” and with that, we’ll end there . . .
    Now THIS is why I stay plugged in.

  16. As to the comment about realtors knowing what is going on, they don’t necessarily. I’ve bought and sold properties many times and had realtors be DEAD wrong about the direction of the market, what I’d get for my property, etc. Remember, real estate is a financial market, and as with the stock market, even the best people make incorrect predictions much of the time because so many factors are involved.
    Wouldn’t you have a bit of denial if you were in a realtor’s shoes right now? AND don’t forget that the training you get to become a realtor is not that in depth. Anyone worth his salt who keeps abreast of trends and data and keeps his feet on the ground can know just as much about trends as your average realtor. Realtors’ strengths are in negotiating deals and understanding legal complexities, not in predicting the market.

  17. Anon, once again, you got nothing. Mom and dad and fluj … does that even mean anything? Do you even read what I write? You just go into autopilot dismiss mode as if I’m spouting polemic.
    This year marks the earliest Thanksgiving possible on our calendar. So save it. I can wait till then for a helping of turkey.
    Dude, Oceanview is a kill zone. Have you ever spent time there? I spent two hours there every Sunday this past summer playing soccer at the rec center. It’s got some bad activity going on, everywhere you look. And Bayview east of third was and is a big mess. Somebody tried to carjack me on Thomas last June.
    Dude, do me a favor. Show us one property that has sold, is in contract, has an offer, or is on the market that’s over 1100 feet and under 700K in Parkside. Otherwise, please knock it off with the Parkside stuff. You keep bringing that up as if it’s factual. It isn’t.

  18. Fluj: “The article quoted two individuals, two highly reputable individuals”
    If this is reputable, then it really doesnt say much about the industry now does it?
    From comments in SF Gate on one of them:
    1) Bonnie Spindler is not exactly a paragon on reality. She overpriced my home when I attempted to sell – and it sat on the market for 6 months. She also performs some dubious activities like having current boyfriend be the “best” handyman to correct things.
    Nuff said

  19. Badlydrawnbear,
    Now that I reread it, you are correct. I should avoid posting on this site while on conference calls. You and the SFGate commentor both raise a valid point. The thing that I find entertaining is the commentor’s feeling that people would move Denver only if the bottom fell out in the Denver market. Denver is already significantly cheaper than SF, and that has drawn Californians here for over a decade. There will always be places that are cheaper, but I think that the fact that people would live in Mateca or Stockton in order to still be “near” SF speaks to the attraction the Bay Area has. That attraction is what will keep people in SF by whatever means they have at their disposal. I think an exodus in response to dropping prices elsewhere is unlikely unless employers are the ones doing the moving. That might draw people away.

  20. “Show us one property that has sold, is in contract, has an offer, or is on the market that’s over 1100 feet and under 700K in Parkside. You keep bringing that up as if it’s factual. It isn’t.”
    Unlike others, fluj, I wouldn’t post a comment here that I couldn’t support with facts, nor would I ever make some sweeping generalization that could easily be disproven.
    Anyway, my 3 minute search on pacunion.com yielded 15 properties that fit that criteria, as follows:
    1347 46th
    1403 11th
    2714 39th
    2546 40th
    2578 44th
    2011 43rd
    1911 28th
    1707 33rd
    1934 47th
    3317 Taraval
    1737 Quintara
    1762 21st
    721 Judah
    1851 26th
    1875 34th (a SocketSite feature, now in contract)
    All of these properties are in Sunset/Parkside, all are 1,100 sq. ft. or larger, all on the market or in contract for $700K or less. But I’m sure you can find some error or fatal flaw with each of these to prove that there are indeed no 1,100 sq. ft. houses in Parkside under $700K.

  21. Brit, you are quoting an anonymous blogger from the SF Gate site. I guess that’s OK. There are others who would tell you differently. What it says about “the industry” I do not know.
    Dude, 34th Avenue is a fixer. 1851 26th is a cosmetic fixer on the market for only five days at 629K, angling for an overbid. 721 Judah is a 1000 foot condo in contract for 649K. 1762 21st — probably a good deal, but a fixer and a death on the property in a heavily Chinese area. 1737 Quintara — cosmetic fixer, 679K for 1036 feet. I actually like this one. Nice upside because it’s and has an oversize garage.
    I’m gonna stop there. No great bargains are to be had, clearly.

  22. Dude called your B.S. fluj. You asked for an extremely narrow data set — over 1100 sf and under $700k in Parkside and he came up with a bunch of examples. Just admit it — you were wrong on this one (it doesn’t mean you’re not right and have worthy opinions on many other issues, but admit this one).

  23. fluj: regardless of if they’re fixers, bargains, or have been on the market 5 or 500 days, the point is you made a blanket generalization and were clearly wrong. It would be big of you to admit it – I do it when I’m wrong.
    Before you claim I’m attacking you, I’m not – in fact, I actually enjoy your posts and think your observations usually add value. Some friendly advice, though: you might consider making statements that are less vehement and absolute. A lot of your comments make it sound like you’re the only one who knows what’s REALLY going on in the market, and anyone commenting to the contrary is a borderline retard.

  24. I admit it. What I said in this thread was a bit off. I should have said “non fixer” as well. You may remember that re: Parkside I said “non fixer, over 1100 and under 700K” (or maybe I said 650K) in another thread last week already.
    Do you admit that Parkside is not showing the beginning of a sea change? Because I do not see it. You’re still looking at 650 a foot out there for 1960s bathrooms and kitchens.
    Sorry if I seem like I’m Mr. Know it All. Seriously, I don’t wish to come off that way and you two guys actually debate without being jerks about it. No, I am not know it all. I try to qualify what I say each and every time. If I don’t manage to do that, then that’s a mistake.
    There are always many different perspectives. Like the SF Chron article said, some are into pricepoints. Some volume. That blogger was disappointed in the realtor’s pricepoint but he/she had surely signed off on it. Then you have individual houses that don’t fall into categories because they’re awesome or a piece of crap or what have you. No one person can make sense of it all.

  25. Thanks, fluj.
    I’m not sure how you define “sea change,” though. Is the market in Sunset/Parkside completely crumbling like Sacramento or Modesto? Of course not, nor will it, IMO.
    But has it visibly shifted? I think so. The stuff sitting at $650 psf would have sold for $700 psf a year ago. I see some places, the true fixers, going for $500 psf. Some of the places I listed above are priced below their last sales prices.
    Sure, there are properties today, even in Parkside, that still sell in days with overbids. But the overall trend I’m seeing is that homes are lingering longer and values, generally, are slowly coming down. Not sure if that constitutes a sea change or not.

  26. I must admit, I thought the downward drift would be a little steeper than we’ve seen. I should stop being surprised at how much money is in this town, or at least how many people are willing to (over)spend a ton here whether they have it or not. Nevertheless, the mortgage sh** hitting the fan is about 20 times worse than I thought it would be, and I did not think housing all across the whole country would be dragged down like we’re seeing. My money is still on an accelerating downward trend even though SF has certainly held on pretty well. There are a ton of indicators of a slowdown. I’ve seen quite a few very nice places in my neighborhood (Castro, Duboce) linger on the market a long time and go for what sure looks like less than prevailing prices of a year ago. But I can’t say I am terribly familiar with what is going on elsewhere in the city.

  27. Truth be told I am not seeing much variation in Parkside. I just did two searches comparing May of 06 and this day last year versus the same period this year, and this year is down seven bucks a foot (from 595 to 588) with a slightly higher median price (855 to 906). Volume is quite down, tho. This is the same trend city-wide.
    I feel like inventory remains very, very expensive for a neighborhood I don’t think has a lot going for it. I do agree that it should be one of the first to change. I feel the same way about the south slopes of Bernal, Potrero, and Glen Park. (Those ‘hoods north slopes are spiking in some ways, for luxury, Glen Park now actually has a $3M+ listing???) But research has shown me the same results. Volume down. PPSQFT same, slightly higher or slightly less, and median higher.

  28. I am surprised noone has mentioned the sharply declining stock market and the effect shrinking portfolios will have on buyer demand. In real numbers, it means fewer dollars available to buy properties. Yet, psychologically, a declining securities market makes buyers who’ve been waiting on the sidelines for “the right moment” want to invest their dollars in a home before more of their liquidity evaporates on the NASDAQ.
    The long run-up in RE prices in SF started right around last serious stock market declines.

  29. Prediction: If the Dow falls to 12000, then even those middling SF properties will start flying off the shelves.

  30. There are more places to park your money than just US real estate or US equities. Several shops offer FDIC-insured CDs linked to foreign currencies or commodities.
    I agree we may see Dow 12,000 in the near future. But I’d wager the effect is the opposite: middling SF properties will see no boost, but the top line properties, which are still selling well, may start to stagnate. I base that on my assumption that the truly wealthy have more money in the markets than the middle class, and will feel less wealthy if/when the Dow drops. Guess we’ll need to wait and see what happens.

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