CFAH

San Francisco Recorded Sales Activity: July 2008 (www.SocketSite.com)
According to DataQuick, home sales volume in San Francisco rose 8.0% on a year-over-year basis last month (609 recorded sales in July ’08 versus 564 sales in July ‘07) and rose 6.7% compared to the month prior.
Keep in mind that DataQuick reports recorded sales which not only includes activity in new developments, but contracts that were signed (“sold”) many months or even years prior and are just now closing escrow (or being recorded).
San Francisco’s median sales price in July was $749,000, down 6.3% compared to July ’07 ($799,000), but up 3.1% compared to the month prior. In terms of mix, we see the median being weighed down by the recording of Below Market Rate units (which is also spiking recorded sales activity) and a nominal uptick in activity in less expensive Districts (a shift of around 3% based on listed transactions).
For the greater Bay Area, recorded sales volume in July was up 2.2% on a year-over-year basis and increased 5.7% from the month prior (7,586 recorded sales in July ’08 versus 7,423 in July ’07 and 7,178 in June ’08). But the recorded median sales price fell 29.3% on a year-over-year basis (down 3.1% compared to the month prior).

July sales were the highest for any month since June 2007 and marked the first annual sales gain for any month since January 2005. However, last month’s sales still fell 22 percent short of the average July sales total since 1988, when MDA DataQuick’s statistics begin, and were the second- lowest for a July since 1995.

Foreclosure resales — homes sold in July that had been foreclosed on in the prior 12 months — made up 33 percent of all resales. That was up from 29.9 percent in June and 4.2 percent in July 2007. Foreclosure resales ranged from 4.6 percent of the resale market in San Francisco to 65.9 percent in Solano County.

At the extremes, Santa Clara recorded a 13.1% year-over-year reduction in sales volume (a loss of 250 transactions) and a 16.4% decrease in median sales price, while Contra Costa recorded a 30.3% increase in sales volume (a gain of 502 transactions) but a 41.6% drop in median sales price (think foreclosures).
UPDATE: While the numbers are above, it’s worth highlighting the impact of foreclosures on sales volume last month. Not counting the resale of foreclosed properties, sales volume in the Bay Area actually dropped 28.5% from 2007 to 2008 (versus the 2.2% increase referenced above). And in San Francisco, we estimate the increase in year-over-year recorded sales volume for non-foreclosure properties to be closer to 4% (versus the 8% referenced above).
Bay Area home sales climb above last year; median price falls hard [DQNews]
San Francisco Recorded Sales Activity In June: Down 9.8% YOY [SocketSite]

Comments from Plugged-In Readers

  1. Posted by badlydrawnbear

    Ok, even I look at these numbers and find myself shocked at how well the SF median continues to hold up in the face of this housing bust.
    So, in my best Vizzini, from the Princess Bride, voice I can only say … “inconceivable!”

  2. Posted by Craig

    AMAZING.

  3. Posted by dub dub

    @BDB: you wouldn’t be so shocked if you used my (patented) google stock price indicator 😉

  4. Posted by AMinSF aka 44yo hipster

    i wonder if SF will pass marin in highest median price for the bay area? i think that alot of higher end property is being taken off the market in marin right now, and thus their median is lower as a result.
    but is the same thing happening in SF? it would be interesting if SF, with all the affordable for sales housing, as well as all the lower end stock in the southern districts manages to overtake mostly high end marin county. (go SF!)

  5. Posted by Anonymous

    If prices are down 6.3% year-over-year for San Francisco, despite a CPI up 5% year-over-year (using the August 14, 2008 Bureau of Labor Statistics report), and you add to that a broker’s commission of 5%, then the one-year loss (sorry, that should be negative appreciation) in real dollars is about 16 percent, right?

  6. Posted by dub dub

    Anonymous: well, if I let you fudge that way, why not let me do the calculation in Euro’s? Or gold, for that matter.

  7. Posted by Anonymous

    It’s reality. As I said, in real dollars.
    Of course, the loss would be even greater in Euros or gold from a year ago.

  8. Posted by Amen Corner

    I continue to be amazed at the strength of the SF market even as almost everything around it is crashing and burning. The differential in price between SF and the East Bay is now quite remarkable.

  9. Posted by condoshopper

    I continue to be amazed at the strength of the SF market even as the politicians are deliberately ruining the city.

  10. Posted by fluj

    “If prices are down 6.3% year-over-year for San Francisco”
    They aren’t uniformly. Think mix. But deducting commissions from only one side of the equation is classic. Nice one.

  11. Posted by enonymous

    If prices are down 6.3% year-over-year for San Francisco, despite a CPI up 5% year-over-year (using the August 14, 2008 Bureau of Labor Statistics report), and you add to that a broker’s commission of 5%, then the one-year loss (sorry, that should be negative appreciation) in real dollars is about 16 percent, right?
    wow, that was the worst use of math i think i’ve ever seen on this site
    and for those who continue to claim site bias – note the emphasis on mix causing downside pressure on the (useless) median

  12. Posted by Brian

    How much of the median is being driven down by district 10?
    Is it bigoted to say that out loud?
    [Editor’s Note: Very little as an increase in District 10 transactions are offset by a loss in District 2 transactions (both of which are relatively low cost areas).]

  13. Posted by SocketSite

    UPDATE: While the numbers are above, it’s worth highlighting the impact of foreclosures on sales volume last month. Not counting the resale of foreclosed properties, sales volume in the Bay Area actually dropped 28.5% from 2007 to 2008 (versus the 2.2% increase referenced above). And in San Francisco, we estimate the increase in year-over-year recorded sales volume for non-foreclosure properties to be closer to 4% (versus the 8% referenced above).

  14. Posted by Brian

    UPDATE: While the numbers are above, it’s worth highlighting the impact of foreclosures on sales volume last month. Not counting the sales of foreclosed properties, sales volume in the Bay Area actually dropped 28.5% from 2007 to 2008 (versus the 2.2% increase referenced above). And in San Francisco, we estimate the increase in year-over-year recorded sales volume for non-foreclosure properties to be closer to 4% (versus the 8% referenced above).
    Any analysis of the impact on median sales price when excluding the foreclosures? If you’re going to throw stuff out of the sample pool…
    [Editor’s Note: Unfortunately DataQuick doesn’t release the level of detail required for that analysis (we’d be happy to do it if they did). That being said, as we wrote above: “…a 41.6% drop in median sales price (think foreclosures).”]

  15. Posted by NoeValleyJim

    I remember that SF passed Marin county very briefly as the most expensive in median sales price in 2000.

  16. Posted by tipster

    Um, the stats shouldn’t throw out foreclosures at all. They are sales like any other. If sales went up 8%, they went up 8%. It makes no sense to pull out foreclosures or any other type of sale.
    With a foreclosure, there is a buyer and there is a seller and a price that allowed them to make a transaction. Just like any other.
    Sale because of death of the owner? Stays in. Foreclosure? Same thing. It is intellectually dishonest to pull out foreclosures because it under counts the # of buyers. Which, whether I like it or not, went up. Maybe some of those were from Infinity and One Rincon, but those numbers aren’t that large and were about the same in June.
    # of sales went up. End of discussion.

  17. Posted by @home.com

    If the CPI is 5%, then homeowners who put 10-20% are paying back their fixed loans with highly inflated dollars. Looks like another win-win. With this spike in activity, it is reasonable to suggest that we are in the vicinity of the bottom.

  18. Posted by fluj

    [Editor’s Note: Very little as an increase in District 10 transactions are offset by a loss in District 2 transactions (both of which are relatively low cost areas).]
    Again I disagree. In fact I think this theory of yours was disproven two weeks ago. We saw then that D10 is way down in price but not volume. D2 isn’t even down in price in terms of average sales price, and by about 5% in $psqft.
    [Editor’s Note: It’s not a theory, it’s simply the data. District 10 gained 8 sales. District 2 lost 8 sales. Net effect on moving the median (not mean/average) when both were below the median point to start?]

  19. Posted by SausalitoRes

    Do I understand correctly…only foreclosed properties transferred to a new purchaser (as opposed to transferred by Sheriff’s sale) are included in the statistics? Do the statistics distinguish between Sheriff’s sale to the lender and one to a real buyer?
    [Editor’s Note: That’s correct. Defined by DataQuick as the resale of a property which had previously been foreclosed upon (i.e., sheriff’s sale) within the past twelve months.]

  20. Posted by "Dave"

    People like to toss inflation stats around to point out the delta between real and nominal investment returns but they always seem to ignore the part about having to actually live somewhere while awaiting their perfectly timed entry point into real estate “investment”. It should be noted that rents (the only alternative to ownership beyond couch-surfing or the “van down by the river”) are as dramatically impacted by inflation as real investment returns are.
    A big component of CPI is owner equivalent rent, which is shooting up as more people are priced out or lack access to financing. Even with a CPI at 5%, I think SF rents have increased between 10-15% in the last 12 months, no? It makes no sense to focus solely on asset prices and pay zero attention to earnings.

  21. Posted by anono

    I think it would be helpful also if you could put in the monthly numbers for the past few years and not just the last year. It’s hard to tell from the chart where the sales compare to 2005 and 2006.
    Editor?
    [Editor’s Note: See comment below.]

  22. Posted by Anonymous

    Nothing’s wrong with my math. The editor of SocketSite himself plainly quoted DataQuick:
    San Francisco’s median sales price in July was $749,000, down 6.3% compared to July ’07. . .”
    I said, “If prices are down 6.3% year-over-year for San Francisco. . . ” qualifying it that way because I’m fully aware that the median means median, and that doesn’t even mean average, either, and it certainly doesn’t mean every house went down 6.3%, and everyone knows that–even you.

  23. Posted by Satchel

    IMO we can begin to talk about a “bottom” when we get a sustained period (say, 6 months or so) where we see (1) relatively flat to slightly declining median prices y-o-y, combined with (2) a trend increase in sales volume y-o-y. I think you really need both. Until then, while it’s fun to look at the chart, it’s really just noise and nothing that should really convince us of any trend change.

  24. Posted by SocketSite

    I think it would be helpful also if you could put in the monthly numbers for the past few years and not just the last year.
    In San Francisco, recorded sales volume in July was up 12% as compared to 2006, down 14% as compared to 2005, and down 32% as compared to 2004. For the greater Bay Area, recorded sales volume in July was down 11% as compared to 2006, down 39% as compared to 2005, and down 46% as compared to 2004.

  25. Posted by John

    [Editor’s Note: It’s not a theory, it’s simply the data. District 10 gained 8 sales. District 2 lost 8 sales. Net effect on moving the median (not mean/average) when both were below the median point to start?]
    Is D2 below the median? If I remembered correctly, the median price for D2 SFH is over $800K, condo sales in D2 is minimum (and median also above $800K). So median for SF here is 750K.
    Are we looking at different numbers?
    [Editor’s Note: You’re mixing two different data sets: listed and recorded. Using your approach 84% of July sales were above the median…]

  26. Posted by REpornaddict

    On mix, I am not clear still how d2 SFHs can be considered low cost when its median is above the median citywide (reported above for condos and SFHs combined).
    anyway, yes d10 will have an effect on the median but its very difficult to put a figure on it. Despite the fact its 20% (or so) of all sales and their price is down 20% (or so) I dont think the effect will be as big as .2*.2 = 4%, although this may well be an approximate effect on the average price.
    So, yes a good month for SF.
    However Marin and San mateo definitely appear to be taking a hit now while they were not say 6 months ago. So it now appears SF is standing alone in not having any mateial price reductions. Although a caveat to that is I don;t know how the mix of Marin and San mateo has changed. This could especially be a factor for Marin given its small dataset.

  27. Posted by silly

    If prices are down 6.3% year-over-year for San Francisco, despite a CPI up 5% year-over-year (using the August 14, 2008 Bureau of Labor Statistics report), and you add to that a broker’s commission of 5%, then the one-year loss (sorry, that should be negative appreciation) in real dollars is about 16 percent, right?
    Hey anon, did you know that the Dow is down 20% from its high within the last year? Its further down if you count the broker’s commission!

  28. Posted by fluj

    I also see that D10 is down 24 sales but D2 is down 50. D-10 is down $37 a foot. D10 is down $76 a foot. (This is for SFRs, which is what both areas are composed of almost exclusively.) And D2 is below median? I doubt it. Below 749K? Only 83 out of the 264 SFRs sold in D2 went for below 749K so far this year! That’s barely a third of the total volume. Surely median is around the low 8’s.
    [Editor’s Note: See note to John above about mixing data sets (you’re doing the same thing). You’re also using YTD versus YOY for July.]

  29. Posted by anon

    The bottom passed in district 9 (SoMa / SoBe / Mission Bay) condos in Feb/March of this year. July 2008 sales volumes are up 76% (72 condos sold)) from their low point (41) in March. Median prices are now at an all-time high (765k).
    And we are yet another month closer to the end of this so-called downturn. Tick-tock. If this is the bad news, what will the good news look like?

  30. Posted by REpornaddict

    OK SS, I see what you think others are doing wrong (mixing data sets).
    But can you share where you are getting the data you are using from, and how you are breaking it down such that d2 comes out low cost compared to the overall median of 749k?
    [Editor’s Note: Start here. And as we wrote two weeks ago: “…don’t even think about comparing these averages to another reports median.”]

  31. Posted by enonymous

    I know the inflation vs deflation argument comes up time and again on this site, but since Dave brought up the (awfully constructed, but unfortunately continually applied) owner equivalent rent (OER) component of CPI, I couldn’t resist.
    If you are graphically inclined, and willing to read, and think, the link below provides one of the easiest to understand explanations of how (since 1983):
    1.) the CPI vastly understated inflation during the housing boom years (by its massive obfuscation of true housing costs through the use of the abysmal OER)
    2.) the CPI currently vastly overstates inflation during the current housing bust (nationwide, the arguemnt about SF ‘being different’ not withstanding).
    http://themessthatgreenspanmade.blogspot.com/2008/08/complete-and-utter-failure-of-owners.html
    My points then, are as follows:
    1.) Whether the CPI wants to show it or not, we are currently in a period of rather impressive deflation (nationwide).
    2.) During the ‘deflationary fear’ years post 9/11 we actually had rather impressive inflation.
    3.) In the long run, the use of the OER as a component of CPI will tend to even out, i.e. the underreporting of inflation during the housing boom will be roughly approximated by the overreporting of inflation during the housing bust. Unfortunately, in the very short run, the reporting of inflation using the current OER is way off. If policymakers are using this short run headline inflation (Greenspan did), their decision making will be (seriously) compromised.
    4.) To the degree that the SF RE market is different (see I’m not completely OT), and it may or may not be, our local inflationary measures may be rather different from the picture I painted above. Case Shiller data suggests that the drop in the greater SF area was 23% yoy but I suspect all but the most vocal bears would agree that the drop in SF proper is closer to the single digits, and may even be zero. Rent data for SF is even harder to glean. It may be up, it may be down, rent control plays a big role, etc etc. All in, however, it is not a leap of faith to state that inflation is higher here than in much of the rest of the US.
    I would argue strongly, however, that inflation, even here in SF, is virtually zero at the present time. We may not be deflating like the rest of the country, but inflation? No way.
    This is what deflation, on a grand scale, looks like. And amazingly the CPI says the exact opposite.

  32. Posted by Satchel

    Well said, enonymous.
    OT – I know you are a *closet* monetarist. Did you see the collapse in M3? People betting on inflation are making a huge mistake IMO. This deflation is being orchestrated by the Fed (but I don’t want to get into fights about that topic today!).

  33. Posted by fluj

    [Editor’s Note: See note to John above about mixing data sets (you’re doing the same thing). You’re also using YTD versus YOY for July.]
    I thought that as soon as I wrote it. I see.
    However, I show SFRs last year in July totalling 46 sales. This year 38. Last year they averaged 868K, this year 844K. The number this year that sold for under the median of 749K is only 10. Last year 13 sold for under 749K in July.

  34. Posted by badlydrawnbear

    Over at “The Mess That Greenspan Made” blog they have this lovely chart.
    I know it’s So Cal and SF is different and all that but I thought it might be useful to see how the counties that make up the southern region behaved over the last 5 years and possibly compare it to DQ’s Bay Area counties.
    From the chart you can see that San Diego was the first to cross into negative YoY Medians by Oct 2006 but LA county didn’t drop into negative until Oct 2007. However, as of last month they are both experience nearly identical -30% YoY declines in the median.
    Of course LA county is much much bigger then SF county so the comparison if obviously limited. But I thought some might find it interesting.

  35. Posted by badlydrawnbear

    You can also see Ventura and Orange county duke it out for highest median, ala Marin and SF, and the ultimate declines in medians, here

  36. Posted by REpornaddict

    Do you mean the comment here?
    Editor’s Note: Not so fast (and not quite). While District 10 gained 7 sales (18%), another low cost District (2) lost 11 (24%). In fact, if we rank order Single Family Home sales in July for all the Districts we see perhaps a 1% swing in YOY sales volume mix from high to low. But now we’re starting to steal our own thunder (i.e., more on mix this afternoon).]
    If so then I think you are also mixing data sets. D2 may be a low cost district for SFHs, but the datquick numbers are for all sales combined. Which appears to then make it a high cost district compared to 750k.
    [Editor’s Note: Nope (and you just did it again). Sticking with a single data set (listed July sales), the midpoint of all sales is a District 5 Condo (average sales price of $898,295). Average sales price for a District 2 SFH? $851,238.]

  37. Posted by view lover

    What I find interesting is comparing the sales activity graph with the graph for inventory. While the time periods are not exactly the same in that the inventory goes through mid August and sales go through end of July, the ratios seem to be very close. 609/1388 is .439 vs. 564/1307 at .431. This tells me that sales are not really up or down but relatively flat compared to inventory. However, given the credit crunch and only around 7% decline in prices over same period last year, SF is pretty remarkable. Specially when one considers that the rest of the nation and even the bordering areas are faring much worse.

  38. Posted by REpornaddict

    I agree view lover.
    The only niggling doubt I have is that in alot of areas things got pretty bad pretty fast – over the course of 5 or 6 months.
    The recent graps posted for LA demonstrate that further.
    I believe SF to be highly unlikely to suddenly “fall of a cliff” like other areas have done, but can’t say for certain.

  39. Posted by fluj

    The same Dataquick numbers, fleshed out better than bdb’s county-only chart, are here: http://dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx
    Those figures look a lot more like what we’ve seen so far this year in SF. And if you look at the areas of relative strength and add them up, they dwarf San Francisco in size and population both. The west side of Los Angeles itself is probably twice the population of San Francisco.

  40. Posted by rr AKA the original Ryan

    I can’t seem to find the whole dataset the graph comes from. Can someone provide a link to the 5 years of data, or, alternatively, do what I want to do with it and provide the graph of the same time period but on a 6-month rolling average?

  41. Posted by spencer

    “Hey anon, did you know that the Dow is down 20% from its high within the last year? Its further down if you count the broker’s commission!”
    the stock market is more volatile than real estate (meaning it can go up as fast as it goes down), but in the long run, stocks make a lot more money, on average.
    you can also average down as prices go down. you can only do this in RE if you buy multiple properties. Indvidial homeowners can rarely diversify

  42. Posted by kel

    Any investment vehicles out there to go long east bay short SF?

  43. Posted by SocketSite

    What I find interesting is comparing the sales activity graph with the graph for inventory.
    Keeping with the apparent “careful crossing your data sets” theme of the day, keep in mind that DataQuick reports recorded sales which includes closings in new developments while Active Listed Inventory Updates do not include the vast majority of new development inventory (only those which they list).
    And yes, our Q3 Complete Inventory Index (Cii) which will account for all listed, available and pipeline new development inventory is (still) coming soon.

  44. Posted by ex SF-er

    If the CPI is 5%, then homeowners who put 10-20% are paying back their fixed loans with highly inflated dollars. Looks like another win-win. With this spike in activity, it is reasonable to suggest that we are in the vicinity of the bottom.
    This is only true if the homeowners are benefitting from wage inflation.
    If we get increased CPI WITH wage inflation, then the homeowner comes out ahead, paying off the note with depreciated dollars (and they have more nominal dollars with which to do that)
    if on the other hand we have increased CPI WITHOUT wage inflation, then the homeowner has increased expenses BUT no more dollars… thus they have less money at the end of the month.
    The problem for the average US citizen the last 8 years or so is that the CPI is outpacing wage growth.
    the “average joe” needs WAGE inflation so that they can pay their bills… however this is exactly what the Fed doesn’t want (the so-called wage/price spiral).
    as satchel and enonymous have pointed out, we are actually going through CREDIT deflation but price INFLATION. this is the worst outcome for the average Joe. Can’t get credit, but daily bills keep mounting and wages don’t keep up.
    but it is theoretically a necessary step to “force” Americans to “save” more to restore the trade account balance.

  45. Posted by scorpio

    does anyone have the median price/sq ft for the main SF neighborhoods for the past 10 yrs? would love to see the trend
    [Editor’s Note: Would you settle for twenty years of listed history? San Francisco Home/Condo Sales: Historical Context.]

  46. Posted by spencer

    “And yes, our Q3 Complete Inventory Index (Cii) which will account for all listed, available and pipeline new development inventory is (still) coming soon.”
    how soon? i’m getting nervous

  47. Posted by ex SF-er

    as for the graph, it shows us what we already know:
    drop the price and we’ll get more sales.
    also: in the inventory thread I had hypothesized that one possible reason for drop in inventory was increased sales. Here we have proof.
    SF is showing that it can clear inventory with lower price. I personally don’t see anything in this data that would indicate “bottom” but as anon said:
    And we are yet another month closer to the end of this so-called downturn. Tick-tock. If this is the bad news, what will the good news look like?
    and so we are… But that does not mean we are anywhere near the end, only that we’re a month closer to it. sort of like my life… every day is another day closer to my death… although my death will hopefully not occur for decades to come!
    this is exactly what the govt/Fed wants… a very slow downturn so that people can slowly adjust. Just like gas prices… gas prices averaged $1.59/gallon (regular, USA) in Aug 2003. Today: $3.70/gallon (regular, USA). if we had jumped right from $1.59 to $3.70 people would have had a heart attack. But it slowly ramped up… and now many people see $3.59 and think it’s a bargain (because it was at $4.05/gallon).
    Our leaders are hoping to accomplish the same feat. Have house prices decline by just a few % per year, and let inflation do the rest. 5 years of 5% losses are easier for homeowners to take than 1 year of 25% losses.

  48. Posted by REpornaddict

    But I dont think you can take numbers based on one dataset (total listed sales)and apply results to another dataset (total listed and unlisted sales). Thats umm.. mixing data sets.
    particularly where the results are so different – you get a listed only median (you say average, but should be median?) of 898k as opposed to only 749k with all data included.
    I am guessing one reason for the huge discrepancy in these two figures are these below market rate units. Including these will clearly push d2 from being a low cost to high cost.
    And, actually, the difference in these 2 figures (898k cf 749k) shows the extent of negative mix of these additional unlisted sales, especially I am guessing the below market rate units. I am pretty sure there were alot less unlisted sales last year. The impact of this mix change is clearly significant – I doubt the listed sales median price was above 898k last year. Things are maybe healthier than I thought.

  49. Posted by tipster

    I’ve said it before and I’ll say it again: when the stock price of Fannie, Freddie and WaMu cross at zero, that’s the bottom.
    One thing I think we can all agree on is we’ve gotten a LOT closer to that event over the past few days.

  50. Posted by michiko

    Over and over SS has argued that the median is meaningless. My head is exploding.

  51. Posted by fluj

    SS itself? I disagree for the most part. SS itself shows the charts and numbers come what may. (Along side SS there is another voice not always in lockstep with topic. That voice will argue a bit more toward an expedient bear-ish framing. But that’s OK.) It is individual posters tend to argue one way or another about median depending upon inclination and usefulness. From what I’ve seen, SS as a site loves median. It drives discussion.

  52. Posted by ex SF-er

    tipster:
    it may be the bottom, but I doubt people really care about when the bottom occurs, they care when the RECOVERY starts.
    it seems many people believe in the so-called “V” downturn. where RE falls, hits the nadir of the V, then shoots back up.
    but it is highly possible (even probable?) that we will have a very wide U shaped downturn, or perhaps a |______/ shaped downturn. in that case it doesn’t help people to know when the ‘bottom’ occurs as it can still be years before recovery.
    I don’t think there’s any reason to try to time the bottom. Wait until you have YOY increases in RE values for a year or more, then you know the bottom is in. you’ll miss the first year of appreciation, but that’s no biggie because you limit your downside risk.

  53. Posted by Satchel

    “Over and over SS has argued that the median is meaningless. My head is exploding.”
    I don’t think that median is meaningless. It’s just that it becomes much less meaningful as the variation of the objects being observed increases.
    For example, median is likely to be very meaningful for sales in a new set of subdivisions, because the underlying value/desirability of the assets is likely to be similar. In a city with a very widely dispersed housing stock like SF, median becomes much less important.
    I would much rather see mean (average) prices, presented together with standard deviation of sales prices, as well as the higher moments (skew and kurtosis). Presented as a time series, these higher order descriptive statistics would be MUCH more informative than simple concepts like “mix”.
    The data exist – they are just not shared with the public. This isn’t rocket science – a B student in stats with a little intuition could provide some meaningful insight.
    Given the public interest in real estate pricing, I think the NAR should be forced through regulation to put all this pricing data out in the open, so that it can be vetted by disintersted analysts. These hurdles were all crossed, for instance, in the stock securities world in the 1930s, and in the nongovernmental debt securiies world there has been increased transparency through a combination of regulation and voluntary disclosure since the 1980s.
    It’s time for the REIC to come clean, and some potential for legal liability to be imposed upon the realtors’ association for false or misleading public data (just as there is for regulated broker dealers). I’m a small government guy, but if you need regulation in order to prevent future demands for central planning by an ignorant population, well, so be it!

  54. Posted by diemos

    When you try to reduce a large multi-variate data sample into a single number you lose detail.
    A median value is what it is.
    If you try to treat it as a perfect indicator of actual price values (if there even exists such a thing) then you’re pushing it beyond it’s region of applicability.
    If you ignore it completely then you’re throwing away information.
    The correct thing is to be aware of what it is and to treat it accordingly. It’s the median price of what people paid for a property. Nothing more and nothing less. It tells you nothing of what people recieved for what they paid and so comparing numbers from different time periods can be influenced by changing types of properties purchased.
    Case-Schiller tries to correct for that problem by using same-property comparisons but cannot identify properties that have either been significantly renovated or deteriorated. So it’s not perfect either.
    There is a marked tendency in the comments for people to embrace medians when they say what people want them to and to dismiss them when they don’t. In the sciences this is called experimentor bias.
    So what can we conclude from the above plot of median values? Given the size of the month to month variations, I would say pretty much nothing at this point. The median price in SF is pretty much consistent with flat since 2005. It’s equally consistent with slightly turning over. The data’s just too noisy to draw definitive conclusions at this point.

  55. Posted by michiko

    I’ve been pretty convinced by the argument that the sale of a very high or low priced property can skew the median. Particularly in a small data set, the average or the mean price would provide a more meaningful number. So I’m with you, diemos, when you say we can’t really conclude anything from this discussion.

  56. Posted by diemos

    Yup.
    Both average and median can be skewed by changing mix.
    Median tends to be prefered because it’s robust against outliers. For instance:
    If 99 people make 100K/year and Bill Gates makes 1B/year then the average salary is 10M/year and the median is 100K/year.

  57. Posted by michiko

    So then median is the preferred measure? If the median since 05 is flat or slightly changed, you’re saying prices haven’t declined or that we can’t draw conclusions?

  58. Posted by REpormaddict

    I read somewhere that the case-Shiller index is available at a county level, but this info has to be paid for.
    Is this correct?

  59. Posted by diemos

    I would say that the median data is consistent with flat prices but it’s too noisy to rule out either a slight decrease or a slight increase.
    Personally I pay more attention to Case-Schiller but unfortunately that number uses the entire metro area instead of just SF county so it includes effects from the suburbs. Hard to break out exactly what’s going on in the city.
    Zillow breaks things down to the zip-code level but since they don’t publish their AVM it’s hard to know how seriously to take those numbers or what things can affect it.
    The apples to apples comparisons that SS does are useful for tracking values but for that comparison we don’t know if there is selection bias in which properties SS features.
    In the end every property is unique and it’s not clear that a single number can be constructed to track “SF property values”.
    But as a scientist, and given the data I have, I am perfectly willing to conclude that SF house prices have not doubled in the past year and they are not half what they were so they must be somewhere in between those two limits. 😉
    If you were to push me I might even narrow that range to +5% to -10%.

  60. Posted by andyc

    Perception, Perception, Perception.

  61. Posted by robert

    re: owner’s equivalent rent and inflation, and the “mess that greenspan made”
    There seems to be confusion about “inflation” and CPI, which is *consumer* price inflation. CPI measures changes in the price of consumption items. It does not measure producer price changes (there is a PPI for that) and it certainly does not measure asset price changes (there are markets for that). It is *not* meant to be a substitute for “the value of a dollar” — as the degree to which CPI affects your ability to buy something depends on the proportion of your income that you spend on consumption.
    Housing plays the role of both a consumed good and an asset. And owner’s equivalent rent is an attempt to tease these things apart. The assumption is that you “consume” what it would cost to rent the house, which is pretty much the definition of renting, i.e. the amount paid just to live in the house, with no attempts to obtain equity.
    Contrary to “the mess that greenspan made”, the only confusion is in the minds of the website authors themselves. The economists who collect these figures know what they are measuring, and the official statistics reveal what we all know: that asset prices have decreased while consumer prices have not.

  62. Posted by michiko

    Thanks for the clarification. I’m in agreement with those approximations taken from my visual interpretation of the trend line.

  63. Posted by michiko

    Sorry Diemos, my last post was garbled. I agree with your approximations based on what I see in the trend line.
    I would note that the Chron interprets this data as “Local Home Prices Plunge.” ;>0

  64. Posted by John

    Editor’s Note: You’re mixing two different data sets: listed and recorded. Using your approach 84% of July sales were above the median.
    That’s not true. D2’s median recorded price was like $840K. I don’t even know where to get average/median listing price.
    I am sure you have that data. Check it.

  65. Posted by The Milkshake of Despair

    I concur with Ex-SFer’s prediction that we will not see a V shaped recovery. This is the third RE boom-bust cycle that I’ve participated in. The other two included long 3-7 year flat periods after the bust. Prices drifted down slightly and inflation nibbled more value away. There was no immediate bounce back probably because the economic reserves that drove the boom had been exhausted.
    What is different about this bust is the huge 30% drops that we are seeing in CoCo and the Central valley. I don’t recall that occurring before (though I never watched anything outside of the core Bay Area before this bust cycle)

  66. Posted by fluj

    “That’s not true. D2’s median recorded price was like $840K. I don’t even know where to get average/median listing price.”
    SS was using July’s figures only versus last July’s figures only, both which were smaller than the dataset of 30 typically accepted, by those so inclined, around here. I have certainly fielded my fair share of criticism for positing small datasets. Going back a few months and getting more sales definitely changes things.

  67. Posted by toni

    “SS was using July’s figures only versus last July’s figures only, both which were smaller than the dataset of 30 typically accepted, by those so inclined, around here. I have certainly fielded my fair share of criticism for positing small datasets.”
    You’ll get even more criticism for posting false info. D2 July SFH/Condo sales = 46/6 in ’07, 35/9 in ’08. D10 July SFH/condo sales = 38/3 in ’07, 45/4 in ’08.
    “Going back a few months and getting more sales definitely changes things.”
    You’re comparing a multi-month average to the one month median? Makes no sense.

  68. Posted by fluj

    @ toni,
    Thanks for not reading my earlier comments yet still criticising. If you read my comments first you would have seen that I showed your same SFR D2 figures.
    I initially compared YoY to YoY, and I excluded condos. Why did I exclude condos? Because it is the Sunset and District 10 and condos are not the market by and large. I didn’t do anything wrong and I just tried to add to the discussion. Thanks for dissing me for no reason. This site, man. It don’t quit.

  69. Posted by michiko

    toni, I’m with fluj on this one. Looks like you didn’t read the whole thread.

  70. Posted by toni

    fluj,
    I’m not dissing you for no reason. You wrote “SS was using July’s figures only versus last July’s figures only, both which were smaller than the dataset of 30 typically accepted, by those so inclined, around here.” but both datasets in July are LARGER than 30 with or without condos. What am I missing?

  71. Posted by michiko

    OT, but context. Shiller’s new book analyzes the causes of the housing crisis (enough blame to go around for all).
    http://www.thestreet.com/s/book-review-shillers-subprime-solutions/markets/marketfeatures/10433944.html
    Most interesting is his proposal to improve housing databases and disclosure, echoing a long running thread on SS.
    A new information infrastructure proposed by Shiller includes six changes: 1) Comprehensive financial advice for everyone; 2) New financial watchdog like the Consumer Product Safety Commission; 3) Default-option financial planning to avoid poor choices; 4) Improved financial disclosure; 5) Improved financial databases to share information; 6) New system of economic units of measurement.

  72. Posted by fluj

    Toni,
    The number of sales at or below median, which was the conversation from the very start? How it affects mix. So 749K (the median) was part of the criteria. I’m confused now. Even using your flat total which is now 39 the sales figures’ average comes out to ~842K for July this year. If the median is under 749K then that once again sucks because it is only 10 out o f 39.

  73. Posted by spencer

    Interesting from signonsandiego…..
    “By Emmet Pierce
    UNION-TRIBUNE STAFF WRITER
    11:55 a.m. August 21, 2008
    Those waiting for signs that the housing slump is nearing an end were disappointed Thursday, as MDA DataQuick reported 2,004 San Diego County homes went into foreclosure in July, a 9 percent increase over June and a jump of nearly 213 percent over last year.
    The July foreclosure tally was a record high since DataQuick began monitoring mortgage failures in 1988. It marked the county’s 40th consecutive month of year-over-year increases in both foreclosures and notices of default, the start of the foreclosure process. ”
    If we have a tlag of 2yrs on the housing slump curve, we are in for a long downturn.

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