San Francisco Active Listed Inventory: 8/3/2008 (
Inventory of Active listed single-family homes, condos, and TICs in San Francisco fell 1.4% over the past two weeks (a typical end of July drop) but remains 27% higher on a year-over-year basis.
Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).
∙ SocketSite’s San Francisco Listed Housing Inventory Update: 7/16/08 [SocketSite]

44 thoughts on “SocketSite’s San Francisco Listed Housing Inventory Update: 8/05/08”
  1. Slightly surprising to see inventory levels holding down this much.
    In fact its the 4th consecutive decrease in the level.

  2. I called the Psychic Friends Network last night and they said the Housing Inventory number will either go up or down 🙂 They also assured me they couldn’t do any worse that the SocketSite tea leaf readers. That may be the only valid piece of information they have ever disseminated. Accordingly I throw my dart up against the wall and say the number stays about the same through October.
    Please do not use my proprietary psychic insights as a basis for your investment decisions.

  3. July 2008 condo sales were rock solid in SF. A great high-volume month, looking like the best in a long, long time. If August keeps up this pace, the market is in good shape.

  4. re: condo sales figures. Are people trying to get into the market before the new January FM/FM loan maximums? A lot of the condo inventory is in the $700-$850 range where the current $729K FM/FM loan limits can be helpful. Next year when the loan limits are $625K, I wonder how quickly the upper half of that range will move.

  5. i’ll take the bait.
    the numbers are what they are. that’s the nice thing about them. you can try and massage them or make them what you want them to be, but in the end, the numbers are real.
    that said, there are lots of potential explanations. the market may be stronger than some of us would have expected (I have been surprised by the relative strength, though I believe this is a short term phenomenon in an otherwise long term slow flat to downward trend). it may be part of the ‘beauty pageant’ effect that stachel theorizes. it may simply be that the current numbers are just average numbers and we don’t have a great data set for comparative purposes. it may be the ‘manipulation of the MLS’ argument that is so popular. all of none of these may be valid.
    bottom line is that a trend of increased MLS inventory was expected by many, including me, and it has not materialized. in the short run this is a good thing for those selling. no question about it. long run – who knows, because that is where the above bases for the numbers become important.
    the other bottom line is that the deleveraging of the housing market is ocurring rapidly in some places, and very slowly in others. it is happening very slowly in SF (in the ‘good’ nabes at least) and very quickly in areas like the central valley.
    the deleveraging is inevitable though. it cannot be stopped at this point. as it occurs (house sold, was 100% financed, now 80% financed), little bits of air escape from the bubble. it may take years. in fact, i bet it will take years here in SF, but it will happen one way or another, whether we root for it or not.
    but these numbers are incredibly useful. if these MLS numbers are real (i know a point of contention), they explain the lack of a bubble pop here in SF. if inventory would skyrocket, it would force rapid deleveraging (ala Sacramento, or most of Vegas etc). so watching these numbers is an important leading predictor.

  6. Not sure what the excitement is here?
    This graph shows that listing volume is UP 27% yoy.
    The sales number chart shows SF sales DOWN 9.8% yoy.
    The median chart shows that SF medians are DOWN 11.9% yoy.
    The Case Shiller data shows that – apples to apples – the SF MSA (note, the entire MSA) is DOWN 22.8%.
    There’s no other reasonable interpretation of the data set descriptive characteristics, in the context of a data set (SF houses and condos) that is very heterogeneous and likely exhibits heteroskedasticity: the average homedebtor in SF is losing equity daily.
    That loss is a wonderful thing IMO. Bubbles create distortions. One of the biggest distortions is the inability of people in the prime bubble region to recognize what is happening. The very slow motion crash continues apace.
    Any questions (about anything except heteroskedasticity ;))?
    (OT – enonymous, did you see the long post I made in response to your question in the case shiller thread the other day about abstract rent/buy analysis?)

  7. “July 2008 condo sales were rock solid in SF. A great high-volume month, looking like the best in a long, long time. If August keeps up this pace, the market is in good shape.”
    Can you share these numbers with us, along with the source of the data? By the way, is the data broken down by district, by any chance? Thanks.

  8. Inventory will continue to DROP if I am reading the market right.
    Remember that just before a tidal wave, the tide goes OUT. Guess what: just before your hopelessly underwater option-arm loan resets, you don’t sell. Why bother when you are one of the 80 percent who made the minimum payment and now owe 125 percent of the 2005 price. Instead, you just stop paying the mortgage. The normal churn on the inventory levels from these properties has stopped altogether.
    It should drift even lower, but then NODs will start to rise next year.

  9. I’ve said it before and will say it again here. Inventory cycles lag behind demand cycles. While there’s always a volume of sales based on normal “life change” driven reasons (i.e. people who must sell due to job move, divorce, expanded family, etc.), there are also plenty of flexible opportunistic sales.
    When the boom was heating up, it took a while for people to realize that they could cash in. “You mean I can sell this hovel for a million and retire to Grass Valley ? Sign me up !” That flushed a lot of inventory out of the market prematurely in the 2004-7 run up. Those earlier than normal sales has the effect of depleting the amount of natural “life change” sellers today.
    On the flipside those same optional sellers might be getting the feeling the now is a bad time to put a property on the market. If you think you can get a better price by holding out 10 years or so (and have the ability to stay put) then why not wait and time the market ? Hence a further suppression of properties being brought onto the MLS.
    How many properties had languished on the MLS recently only to be pulled ? Those are the flexible opportunistic sellers re-evaluating their position.
    If I had known how this cycle is playing out, I might have sold everything in 2006 and would now be a renter. At least I didn’t buy (but came real close in several offers a year or two ago. Whew!) Now that we’re gliding down, prop 13 has me convinced to ride it all out.
    Of course an opposing force comes from homeowners who are being forced to sell because they can no longer afford their increased mortgage payments. The net effect is what you see here.

  10. (OT) satchel – i just saw it but didn’t have a chance to really study it
    i’ll reply on that thread (trying to reach 200 comments for our omnipotent editor)

  11. True, but both the inventory and sales figures do not suggest that things are getting worse than the start of the year – in fact the opposite.
    Then the YOY inventory was as high as up 49% YOY.
    And volumes as much as 27% down YOY.
    median prices are as we know notoriously unreliable due to changes in mix.

  12. I did see a very robust condo sales district by district breakdown somewhere. Did anyone else? I’m thinking SF Schtuff had it. But I just got back into town after a week and it seems to be gone.

  13. If half the people who would like to sell take their homes off the market because the market sucks, then these numbers get heavily skewed. i think a lot of people are stupidly deciding not to sell and “wait it out” they may be waiting a long long time to sell for prices they could sell at today.

  14. “If half the people who would like to sell take their homes off the market because the market sucks, then these numbers get heavily skewed.”
    That’s the way markets work. When prices go down, and/or sales become difficult, there is less motivation to sell.
    It happens that in San Francisco, there is a low turnover of homes, and many people who have low mortgages and low tax valuations (with Prop. 13). They can wait until the market is more favorable.
    Several friends of mine were renting houses in the early ’90’s, and many of those houses were sold during real estate run up of the last decade. That supply of rental houses is less likely to come to market, until the market heats up again.

  15. I don’t get how many of you are blaming prop 13 for unavailability of housing and on the same time boasting an increae in inventory? 27% more than last year as has been mentioned. What’s the problem? Oh, the price. Yeah, well that’s what the market bears at these levels at this time. Prices have already fallen quite a bit according to some of you bears so I’m not sure why prop 13 is still the villian here. Maybe it’s the fact that many of you just cant afford to buy, won’t make the sacrifices necessary, can’t discipline yourself to save, aren’t brave enough to risk it, or just feel that you are just entitled to have the property that someone else already has bought and in many cases paid for, because they are’nt paying enough taxes. Once these people are forced out I guess the idea is to buy them at 30% discount in order to meet the P/E equations and rent to value multiples, etc.. Really, what a bunch of crap. Grow up and stop using scape-goats, that’s such a cop-out.

  16. viewlover – the market is influenced by a number of forces and prop 13 is just one of them. As I mentioned before, we’re seeing the net effect of prop 13 allowing some owners to wait out the market (reduces inventory) combined with reduced demand (increases inventory)
    Those are just two opposing forces. There are many more. It is unreasonable to latch onto just one market influence and ignore the others.

  17. I’m not a “bear” (or a “bull”). I like that my property taxes remain predictable and relatively low thanks to Prop. 13. But Prop. 13 is a disincentive to sell. It provides an incentive to hold onto one’s house for an extended period, if home prices have risen since purchase. I plan to wait to sell my home until after I turn 55, so that I can transfer my current tax to my new residence. Even if prices remain stagnant, it is financially advantageous for me to hold my property until then.

  18. prop 13 helps people stay in their homes as well and not be taxed out of them. Using taxation to “level” the playing field is also a bit wacked. That is a benefit that far outways the impact it may have as one of the elements that creates the “net”. Using taxation to “level” the playing field is also a bit wacked.
    It’s also a fixture in the entire state and not just SF. So any impact would have to be weighed across the state and I dont’ think prop 13 is adding any upward pressure to Sacramento, Modesto, Stockton, San Diego and alot of other communities. It’s not just the mansion on the hill that the owner does not want to sell because he does not have to.

  19. Prop.13 does more for the elderly than Rent Control. I think prop.13 works well for what it is set up for. Without it there would be lot’s of people forced out of Noe Valley unfairly for example. While rent contol is abused as often as possible.

  20. heres SFH sales data for July
    and condos
    sfhs still seem to be doing well also -particularly district 5.
    clearly d10 is dragging down the total SFH median – and with sales YOY increasing 18.5% in this district, is having a clear and significant effect on the…drumroll….mix as well.
    [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).]

  21. OK..good point.
    I’d argue whether d2 is “low cost” though, the sales price for this district seems to be around the SFH median (850k or so?) – it was certainly above the SFH median for June (828k)
    [Editor’s Note: Again, rank order all the districts. D2 is in the bottom half (along with D3 and D10) in both 2007 and 2008.]

  22. Not sure how you are ranking all the districts.
    You say its in the bottom half – wouldn’t there be 5 districts in the bottom half and 10 in the top half? You seem to only have 3?
    I am not sure thats the best way to do it anyway – whether a districts price is above or below the overall median is a better way to do it I think.
    Either way I think volume drops in this district which is so close to the median only means that movements in volume in those districts above and below it only increases in importance – hence the increasingly distorted effect of d10.
    [Editor’s Note: Sorry, rank order by price and then count transactions (the median in terms of the number of districts is irrelevant). And don’t even think about comparing these averages to another reports median.]

  23. Yeah, that’s the one. On second glance it isn’t as bullish as I had thought. (My memory was clouded by another site’s more bullish crowd seizing on what is inarguably a huge surprise, D9 condo sales.)
    And as for interpretations of “mix” — D2 lost a volume of 11 but only decreased by 3K, D10 gained 7 but lost 100K. Whatever tho! None of us will convince any of the others of anything other than median isn’t very precise in a town of such extremes.
    [Editor’s Note: Keep in mind that whether D10 lost $1K, $100K or $200K is irrelevant (that’s one of the upsides of “medians”).]

  24. Let’s imagine the classic supply/demand curves.
    We know the demand curve has shifted left. If the supply curve doesn’t move(D4), we get lower volume and lower price.
    If we get same volume, lower price (D9), or even higher volume and lower price (D10), it means the supply curve also shifted left. That means the mentality of the sellers also changed.
    If we get lower volume but same price (D2, D3), the supply curve has to move right. That means the sellers are LESS willing to sell.
    And D5 got same volume and higher price (D5), that can only mean one thing – the demand curve (for that district) shifted right instead. But supply shifted left. More demand, less supply.
    D6, D7, D8 do not have enough sales to be statistically reliable.

  25. You’re right fluj. effect of changes in volume for d2 are next to negligible (very close to the median price, and little change in price). Those in d10 are hugely significant (way below median price and huge falls in their price). But the methodology outlined here gives them the same weight. Theres lies, damned lies…
    Bottom line is d10 share of total volume has risen YOY from 17% to 22%. That, coupled with the drop in price for that district is significant.
    “reverse beauty pageant” anyone?
    [Editor’s Note: Keep trying (see note to fluj above). And for the last time, D10 isn’t the only “low cost” area in San Francisco.]

  26. “[Editor’s Note: Keep in mind that whether D10 lost $1K, $100K or $200K is irrelevant (that’s one of the upsides of “medians”).]”
    I’d personally rather not keep trying. It’s a citywide context versus a district by district context that we’re disagreeing upon now. And again, while I understand why median might be of interest to you, to me it is not.
    [Editor’s Note: Whether or not people are interested in medians, they should understand how they work and and how they can be effected (especially considering the industry’s predisposition to touting their movements).]

  27. Editor’s Note: Keep in mind that whether D10 lost $1K, $100K or $200K is irrelevant (that’s one of the upsides of “medians
    I didnt understand that comment either. Not all d10 homes sold for exactly $578k. Some d10 homes are much more expensive than this (800k+). Again, I think thats one problem with your thinking – that all homes in a district go for that districts median. things are more complicated than that.
    The median home in SF might actually be a d10 home one month.
    The fact that there are more of them selling is more significant, yes. but the price drop is a factor to. together = mix.

  28. No industry touts median nearly as much as the r.e. blogging industry, cerca 2008.
    [Editor’s Note: Wow. Ironic considering how long we’ve been poking holes in “medians” (especially at the neighborhood level) and have taken plenty of heat for doing so.]

  29. Say 7 homes sold for
    600,600,600,700,800,900,1000 median = 700
    say the 3 600 and the 1 800 homes are in a district which falls 200 each.the rest stay the same. next month
    400,400,400,600,700,800,900 median = 600
    but homes in other districts havent fallen.
    did it matter whether home in low district lost 1k, 100k or 200k…yes.
    [Editor’s Note: In your hypothetical example of seven homes, it makes a difference. In the context of the actual data above, it doesn’t.]

  30. REpa,
    The guy doesn’t want to talk downward mix, and it’s his blog.
    Take it easy,
    [Editor’s Note: No, we’re just not going to talk about downward mix (not to be confused with downward dog) unless that’s what the data actually demonstrates (we’re kind of funny that way). And with that, we’re off to crunch more numbers…]

  31. Oh great so a thread on home sales volume gets morphed into median…again.
    As the editor says people should know what median means. It means currently 20 houses all for sale @ $799K are throwing off the median. The actual median house is one of these 20. Those sneaky agents are all up to something trying to sell a particular house as the median.
    Since sales by district show that the median district is D9. Then we have a winner 4142 Folsom st. THATS THE MEDIAN
    $671 sq.ft, 2 bed 1.5 bath; sorry already in contract. The good news is that there will be another median house soon

  32. First, I agree that median sale prices are a nearly insignificant indicator of real estate market direction. But I also agree that the real estate industry has long cited this single bit of data as the ONLY indicator of market direction. So it should be addressed and understood.
    REpornaddict, your example is correct, but it is not relevant to this particular discussion because D10 did not have anything close to the 57% of total citywide sales that is your premise. It was only 22% of the volume. So if in your example, the two (28%) 600 homes in D10 each fell to 400 (or 40 or 4), it would have no impact on the median at all. It is irrelevant, as SS pointed out, when you have a larger sample and D10 comprises such a small overall percentage of the total sales. You have to look at the overall mix and cannot draw any citywide conclusions one way or the other by looking at just one district (and we don’t even know if or how the mix of sales in that district changed).

  33. 259 out of 1270 sales for SFRs is not a small amount. It is 20 and change percent, that’s one in five. It shouldn’t be one in five! Do District 10 houses make up one in five SFRs in the whole city? No, they don’t.
    So factor 100K losses on average for those sales. How this can be argued as not effecting mix is unknown.
    Another — and perhaps the only interesting, fact — that has arisen here is this: People are buying in 10. Are they all bargain hunters?

  34. Any idea what was the highest price of a SFH in District 10? Is it higher or lower than the median?

  35. OK, this is my final post on this thread – and regarding mix (for now).
    yes my 7 home example was simplistic. And I would not claim that the magnitude on mix is anywhere near that in the example.
    But, it will affect the actual data.
    Lets say 45 sales, with pre price falls 35 below and 10 above the median. After price falls 40 below and 5 above. If the median citywide is the 100th sale, pre price falls its the 65th ranked in all other districts. Postprice falls its the 60th ranked – this will pull down the median.
    This is before the effect of increasing volumes – say theres actually 60 sales in the district, 50 below 10 above. Then median is then the 50th ranked in all other districts. (assuning, as we have seen, sales fall elsewhere so the 100th home is still the median).
    clearly the magnitude of those falls (1k, 100 or 200k) will affect how many more fall below the median after the falls.
    Anyway, as I said, this is my last post on this thread. and, you know, I’m not normally this argumentative. But I guess I’ve always been a sceptic regarding the median supporting the mix claim – although I do accept its alotmore complicated than sales by district – that is one of the better (only?) mix data we have. And, I do see it moving in the opposite direction at the moment.

  36. “Any idea what was the highest price of a SFH in District 10? Is it higher or lower than the median?
    235 of the 259 were below the medians ~730K. I mean, one sold for $1.3M, but that is precisely what we’re not talking about here. Again, some of us are not compounding by district-specific median first here, and some are.
    I mean, 149 SFRs were under 600K. That’s 11.7% of sales for the entire city (and well over half for the district) @ ~130K under the median.

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