CFAH

San Francisco Listed Inventory Update: 5/12/08 (www.SocketSite.com)
Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 3% over the past two weeks (37% higher on a year-over-year basis) while listed sales volume appears to have slightly slipped. Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor do they include multi-family listings (unless the units are individually listed).
SocketSite’s San Francisco Listed Housing Inventory Update: 4/28/08 [SocketSite]

Comments from Plugged-In Readers

  1. Posted by resp

    If anyone can confirm – just want to make sure of the methodology behind these numbers – pulled directly from the MLS (with the stated exclusions) at month-end or month average?? Seems like the most accurate measure of inventory here – anyone disagree?
    Does anyone keep track of the sub-categories to support the thought that condo inventory is out of control and single families in the right neighborhoods are still hard to come by?
    Anecdotally I think the same high growth in inventories is true of multi-unit buildings – especially if you add up all the units within those buildings . One noted SF real estate agency seems to be trying to get a huge owner of multiunit buildings out of his portfolio, and not too successfully.
    thanks
    [Editor’s Note: Listed single-family home inventory in San Francisco is up 32% (YOY); condo inventory is up 40% (YOY). In terms of a bulk sale of multi-unit buildings (for which “huge” would be an understatement), we’ve heard the same.]

  2. Posted by Trip

    I agree resp’s proposals to get the best read on the measure of inventory make sense. However, given the significant number of contingent offers that are falling through these days, I’m not sure excluding contingent offers isn’t skewing the numbers.
    And I also agree it makes sense to break out condos and SFRs — although I think it is realtor spin that SFRs in the “right neighborhoods” are hard to come by. Just look at the MLS and you’ll see lots of SFR inventory in great neighborhoods, and it is not moving fast. Paragon reports some summary info by zip code — e.g.:http://www.altosresearch.com/paragon/latest/paragon_market_update_zip_based_cmid_55_zipd_94114.html
    And here is a good site with SF condo listing data: http://www.sfcondosales.com/condocount

  3. Posted by resp

    trip – just for the record there’s no way i’m a realtor. but a few things i’ve noticed anecdotally about SFH’s in “good areas” like district 7 and Noe.
    – buyers looking in district 7 for vacant 2-unit buildings to live in as a single family cuz they can’t find any SFH’s below $3M without hair on them – look at the D7 listings – one’s the famous firehouse neighbor, two are on busy Richardson, one’s a total fixer for $1.7, etc.
    – the argument we all had last week about about the Noe property that was legally 2 units but being marketed as a SFH.
    – the Avila St. SFH being sold by the chef that was listed at $2.695 i think and sold for $2.8. wow.
    I’m just getting the sense that making money in SF real estate by TIC conversions and condo development is so yesterday, and the new game is going to be making multi units liveable by single families.

  4. Posted by fluj

    However, given the significant number of contingent offers that are falling through these days, I’m not sure excluding contingent offers isn’t skewing the numbers.
    That could be skewing either way, tho. No it’s probably right to exclude. Either they’ll be sold a month to a month and a half later or they won’t.

  5. Posted by FSBO

    In addition to the 1,491 (+/-) active listings, there are 300 under contingent offers and 391 pendings. I wouldn’t change the methodology – and unless SocketSite has captured these other quantities for the previous points in time, you would lose the historical comparisons.

  6. Posted by jd

    Do your figures include all of the new construction/conversion units offered by developers, or is this figure only the properties listed through MLS?

  7. Posted by Foolio

    @fluj:
    Interesting comment about the (relative) increase in contingent offers that are kicking out. Anecdotally, it also seems to me like properties are staying in contract much longer now, even *after* the contingencies have been removed (at least according to public data).
    Are you seeing this too? Any explanation? Thanks for any insight on this, it’s something that I’ve been curious about for a bit.

  8. Posted by fluj

    I didn’t make the comment about contingent offers kicking out, really. But what’s happening is that banks are changing criteria on people mid stream. This in turn is causing managers at brokerages to encourage agents to write offers with longer financing contingency periods.

  9. Posted by Trip

    That was me (not fluj) who remarked about a perceived uptick in contingent offers falling through. And I admit I have no hard numbers to determine if this has increased as of late. I’m only remarking anecdotally based on a number of areas I’ve followed, and it simply seems as if I’m seeing far more places re-listed as active after having been listed as contingent than was the case in the not-too-distant past. One recent favorite SS example in my neighborhood — 65 Caselli Ave. in the Castro.

  10. Posted by Foolio

    Whoops…the lack of quote marks threw me.
    I feel like I’ve seen the same thing (contingent offers falling through), FWIW.
    I also perceive that properties are staying in contract *without* contingencies much longer now, and changing financing terms wouldn’t seem to explain that. I wonder what that’s about?

  11. Posted by urban_angst

    2 interesting things from the Paragon chart of SFR and Condo activity in San Francisco:
    1) The condo market appears to have bottomed back in Q1 2007.
    2) The DOM for the lowest quartile of properties is very large compared to the highest quartile. In other words, cheap buildings in lower class areas aren’t selling as quick as the higher priced product.

  12. Posted by Miles

    resp – it is very difficult, if not impossible, to convert multiple units into a SFR. Basically, you are removing rental units from the market and need planning department approval for this. It is generally not looked upon favorably by the planning department as it is seen as reducing the rental stock. Kind of the same reasoning why you can’t demolish an apartment building now. I don’t see this as becoming a major trend due to the difficulty in combining units to get a functional floorplan on top of the difficulty in removing rental units from the market. I think you are correct though in seeing owners looking at multiple unit buildings as an alternative to SFRs though.

  13. Posted by resp

    miles u are right. i’m not saying anyone is legally converting the buildings. just keeping multiple units for themselves. and occasionally breaking down walls, boarding up doors, and maybe removing kitchens to make a multi-unit suitable for their lifestyle. all yet another negative effect of rent control, in my opinion.
    btw, does anyone know the over/under on prop 98 passing (removal of rent control)?

  14. Posted by SFwatcher

    urban_angst, are you referring to some other chart?
    1) How can the condo market have bottomed out, if there are more active inventory now than Q1 2007, and rising…
    2) There’s always a quick solution. Increase prices for cheap buildings in any area, they will sell like hot cakes…

  15. Posted by fluj

    ” also perceive that properties are staying in contract *without* contingencies much longer now, and changing financing terms wouldn’t seem to explain that. I wonder what that’s about?”
    How can you tell when contingencies are removed? I doubt you can. You can only perceive lenghts of time. I put it down to financing.

  16. Posted by Spencer

    “1) The condo market appears to have bottomed back in Q1 2007.”
    hahahahhahahahahahaha.
    April Fool’s ended 6 weeks ago.
    Give or take 3-5 yrs, you may be right.
    The condo market may bottom in Q1 10 at the earliest

  17. Posted by urban_angst

    Isn’t the “bottom” the low point on a graph of numbers? Especially when the numbers continue to rise from that point?
    Well, if that’s what a “bottom” is, then the low point for the median price of condos in San Francisco is Q1 2007. Take a look for yourself…

  18. Posted by Treeman

    urban_a-
    If only the chart were charting median price, you’d be correct.

  19. Posted by nonanon

    @urban_angst: the fact that cheaper places are selling faster than more expensive places would drive the median up! median can rise even when prices are falling.

  20. Posted by anon

    Number of units for sale, in and of itself, doesn’t really have mcuh meaning.
    What about the number of months required to sell the units (months of inventory)? For example a car dealer can have 100 cars that it can sell in one month or 10 cars it can sell in a year. The velocity of sales is the key.
    It would be interesting to see how the months of inventory is trending. In parts of SF there are still multiple overbids, and in other parts the open houses seem pretty dead.

  21. Posted by Treeman

    nonanon-
    That’s not the case. Cheaper places selling quicker would drive the median down. This isn’t the point though. The point is that the chart has nothing to do with median prices.

  22. Posted by fluj

    LOL at people knowing the timing of the condo market.

  23. Posted by BottomFeeder

    Can someone post the link to the “Paragon chart of SFR and Condo activity in San Francisco”

  24. Posted by Foolio

    @fluj:
    “How can you tell when contingencies are removed? I doubt you can. You can only perceive lenghts of time. I put it down to financing.”
    Well, the data I see shows two different stages, Escrow and Escrow-Firm. I’ve been told that the latter means clear of contingencies, including financing. Perhaps you’re looking at different data?

  25. Posted by nonanon

    “Cheaper places selling quicker would drive the median down.”
    @treeman: yes it would! meant to write “the fact that more expensive places are selling faster than cheaper places would drive the median up!” which is what urban_angst wrote is happening.

  26. Posted by fluj

    “Well, the data I see shows two different stages, Escrow and Escrow-Firm. I’ve been told that the latter means clear of contingencies, including financing. Perhaps you’re looking at different data?”
    I think I’m probably looking at the same data but categorized differently. For you I would think that someone who runs whatever site you use transcribes properties that go into pending status and place them as “escrow-firm.” So that’s probably accurate, then. I do know that a lot of people are having problems getting loans because lenders are changing criteria.

  27. Posted by jimmythekid

    Cyril Moulle-Berteaux argues in the wallstreet journal that the housing market has bottomed.
    http://online.wsj.com/article/SB121003604494869449.html?mod=opinion_main_commentaries

  28. Posted by urban_angst

    @ bottomfeeder
    The link to the Paragon chart is in Trip’s post from 8:44 a.m. (the second post in this thread).

  29. Posted by HappyRenter

    @JTK,
    A realtor sent me that same article yesterday.
    Moulle-Berteaux works @ Traxis. I would argue that he is probably talking his book while trying to unload some condo buildings.
    Also note how the article talks about the natioanal statistics when the NAR is constanly reminding us the there is no national market and “all real estate is local”.
    I think that while some areas appear to be becoming investable (positive cash flow from day one regardless of de/appreciation) the major metros are still overpriced.

  30. Posted by FSBO

    Good point HappyRenter – never accept anything that a hedgie (or anyone from Wall Street) says without knowing their ultimate motivation. These guys are not in the habit of making public service announcements. And you certainly can’t trust the ones who are actually in public service (eg ex GS-er Hank Paulson). That article was from a week ago – Cyril is probably talking out of the other side of his mouth this week.

  31. Posted by fluj

    “http://online.wsj.com/article/SB121003604494869449.html?mod=opinion_main_commentaries”
    I don’t think this analysis takes the isolated pockets of relative strength into account in any way. He’s talking new homes, KB and the like. He’s talking big picture. So yeah, the only point that this guy makes which applies to SF RE is that mortgage interest rates are still historically low, and that we are now three years into a bust many other places in America.

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