CFAH

San Francisco Active Listed Inventory: 9/2/08 (www.SocketSite.com)
As expected, inventory of Active listed single-family homes, condos, and TICs in San Francisco fell 3.7% over the past two weeks (versus an average of 7.5% over the prior two years) and is currently running 18% higher on a year-over-year basis.
Expect to see listed inventory spike over the next couple of weeks as buyers, sellers and agents alike return from vacation and listings new and old return to the market.
The standard SocketSite Listed Inventory footnote: 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: 8/18/08 [SocketSite]

Comments from Plugged-In Readers

  1. Posted by debtpocalypse

    Dumb question – I’m sure it’s previously been asked & answered. So I apologize for it in advance.
    What’s the seasonality explanation for why listings peak in October?
    One always hears of the spring house selling season. You’d think they’d peak shortly before or during that.
    Thanks.

  2. Posted by Mole Man

    Just a guess: Events in the City bring a lot of visitors from June to September. My theory is what you are seeing is a peak of purchasing in the late summer and listings chasing that and not always making it.

  3. Posted by John

    Normally, any graph would be the weapon for both the bulls and bears…so come on, I am expecting more posts.

  4. Posted by anon013

    Perhaps it’s the weather in the fall

  5. Posted by anon

    I will be much more interested in seing the Sept and Oct numbers. As the last 3 years have shown Aug is quiet.

  6. Posted by sanfrantim

    I may eat my words (I’ve done it here before) but, do not be surprised if we do NOT see a post-Labor day spike as dramatic as the past 2 years. With all the market naysaying in the media of late, no one wants to sell now unless they have to.

  7. Posted by FSBO

    I’m surprised that the active counts has not been even higher. I know that there are many reasons (and some good anecdotal evidence) that discretionary sellers are keeping their properties off of the market. Check out the following list – it shows total sales of SFH’s + condos for San Francisco (per MLS) by year for the period Jan – Aug:
    2008: 3,094
    2007: 3,746
    2006: 3,908
    2005: 4,388
    2004: 4,601
    2003: 4,070
    2002: 3,930
    2001: 3,049
    2000: 3,549
    1999: 3,846
    1998: 3,526
    1997: 3,500
    1996: 3,146
    1995: 2,440
    1994: 2,919
    Keep in mind that MLS reporting for August 08 is not yet complete. (At this moment, the Aug 08 sales count stands at 355 compared with 492 in Aug 07 and 486 from July 08.) Also note that the MLS unit counts differ from the DQ numbers (and increasingly so over the past year or so).
    The number of YTD sales for Jan – Aug has averaged about 4,100 for the past 5 years (2003-2007) and about 3,500 for the previous 5 years (1998-2002). Given that YTD sales for 2008 are 400 – 1,000 units lower (and the delta would be even greater if, say, the trailing 12-months had been used), I would have expected the active listings to be much higher than the current level of about 1,337.

  8. Posted by tipster

    “I would have expected the active listings to be much higher than the current level of about 1,337.”
    At 10% price drops from the peak, I doubt there are many sellers on the sidelines. They would at least try a 10% above market price, since it’s basically free for them to try. So the discretionary sellers should be around as much as they always are.
    But if you are way underwater on your neg am loan, you don’t list your home. You CAN’T sell. You just make the higher payment to keep it from resetting and hope for better times next year. You aren’t going to pony up the serious cash it would take to sell. Even people without neg am loans may not be able to sell without coming up with at least some cash.
    In the meantime, more and more would be sellers are stacking up, and if there is a rebound in the next few years, it’s going to make it tough to get any traction in prices.

  9. Posted by Trip

    Thanks for the sales numbers, FSBO. Here is some info on the other side of the coin — listings:
    http://www.altosresearch.com/paragon/latest/paragon_market_update_zip_based_cmid_55_zipd_94103.html
    You can see the steady drop in $/sf (now at $506 city-wide for SFRs, down about 20% from a year ago), as one would expect from higher listing volume and lower sales. The August sales numbers are extremely low — over the last few years August volume has been just about the same as July. And August was one of your “5 Fridays” months that usually skews the numbers higher. Any idea why the sudden crash in sales (or the surprising uptick in July) other than the usual suspects? I’m seeing an awful lot of pocket listings, but I have no idea how it compares with past years. It will be interesting to see how inventory develops through the fall to see if the accelerating price declines accelerate even faster.
    I’ve said it a dozen times — I really don’t see why anyone is buying right now with this stark trend firmly having taken root.

  10. Posted by sparky

    Those altos numbers on $/sq.ft. are for the median on the MLS. So what about all the places that don’t list sq.ft.(because they know if would be high)?
    Also the $/sq.ft. of places for sale that fall in the median house $ are 535,621,645, and 585. So how do they get $506??

  11. Posted by ex SF-er

    What’s the seasonality explanation for why listings peak in October?
    I think PART (not all) of the reason is because sales decrease in fall.
    in the spring (after Superbowl) you have a crush of people putting their homes on the market, but also a crush of people buying… so inventory only goes up a little if at all.
    after Labor Day the sales drop substantially for 3 primary reasons (the following affect sellers and buyers):
    -people don’t want to move after the school year, but obviously this is less important in SF where many people are single and DINKs
    -less people want to move in winter, even in SF. (I moved once in January and it SUCKED. freezing cold drizzle and fog.. yuck).
    -few people like to up and move around holiday time. (sucks to be moving during thanksgiving/xmas/new years)
    right after Labor day you still have a few hopeful sellers who want to sell and get out prior to winter/holidays but less buyers… so inventories go up.
    but then a few months into fall (like Oct/Nov) many sellers get the idea that the sale won’t happen in the late fall/winter, and they don’t want to move around the holidays during bad weather anyway, so they pull their listing until next spring… hence inventories fall in winter.
    thus you get the peak in October (an October sale will often close in November prior to Thanksgiving… a November sale will close in December, holiday season).
    and this is why sales peak in May/June/July, since those homes will close in June/July/Aug.
    the question now is what happens next spring. I personally don’t think that any inventory or sales #’s will mean much again until next spring (after Superbowl) since most of RE sales happen in spring/fall/early summer anyway).
    If it’s anything like San Diego (I’ve used SD as an example many times before because SF is tracking similarly but not exactly to SD) then next spring you’ll see an even bigger crush of new sellers, but stagnant to even lower buyers, so inventory will rise again compared to this year.
    if (a big if) this pattern of progressively rising inventory and progressively lower sales occurs, then and only then will you see meaningful nominal price drops.

  12. Posted by KK

    “I’ve said it a dozen times — I really don’t see why anyone is buying right now with this stark trend firmly having taken root.”
    You can say it until your blue in the face, the reality is just because purchasing in this market doesn’t make sense to you, the majority of buyers are interested in a buying a HOME and don’t evaluate a purchase according to your criteria.

  13. Posted by Trip

    Yes, I overstated it — there are certainly plenty of non-financial reasons to buy rather than rent. But even if you’re interested in buying a home, why not wait until prices fall further? It’s not like there aren’t much less pricey alternatives to buying out there, and it can be devastating to find yourself in a home that has significantly depreciated in value, which is all but a certainty over the next couple of years or longer.

  14. Posted by chuckie

    There is a good chance that today’s buyers, in 10 years, will say, “seemed like a good idea at the time”.
    🙂

  15. Posted by Debtpocalypse

    Thanks for your thoughts ex-SFer. Since they’re extended, I’m gonna have to mull them over, to give them their due.
    Another component, I think, may be the duration of a listing contract with a realtor, because both the listings-peak and the subsequent collapse need explained.
    What the “typical” duration of a listing relationship with a realtor?
    Anyone? Bueller? Bueller? Anyone?

  16. Posted by sleepiguy

    A lot of top realtors save their prime listings for fall. When I first moved to SF years ago, my realtor told me that people simply don’t buy here in the summer. Maybe they’re traveling (buyers, sellers, and realtors!), or maybe the foggy weather is off putting – I don’t know. But a bump in inventory has little to do with poor fall sales and everything to do with realtors holding off a few desirable properties. Meanwhile, the leftovers from summer will typically have big price reductions.

  17. Posted by ex SF-er

    But a bump in inventory has little to do with poor fall sales and everything to do with realtors holding off a few desirable properties
    I disagree. you can clearly see that the peak in sales in San Francisco is in the late spring to early summer and sales are already falling by September. a realtor who tells his patient to hold listing their prime property until fall is doing his client a major disservice IMO.
    to fluj/FSBO/other realtors: do you ever counsel your clients to wait until September to list?
    if your hypothesis were true we should see a bump in sales in the fall (since one would assume buyers would pick up these properties like hotcakes during fall when the Realtors told the sellers to list). but you don’t see the bump in sales in the fall. quite the opposite.
    From socketsite itself. Compare spring, summer, and fall sales every year since 2004. the trend is obvious. sales highest in spring and summer, sales lowest in winter. sales in late fall in the middle.

  18. Posted by NoeValleyJim

    You can see the steady drop in $/sf (now at $506 city-wide for SFRs, down about 20% from a year ago
    You are not reading that graph very carefully. It shows prices at about $550/sq ft a year ago and $515 now, for a drop of about 7% from this time last year.

  19. Posted by Trip

    I stand corrected NVJ. The 20% drop is over the last year and about two months, not the last year. The table says $506/sf, the chart says $515. Either way, it is a significant reduction in SFR listing prices city-wide from 2007.

  20. Posted by REpornaddict

    I am curious, however, as was someone above (SDparky?) how the fact that many properites are listed with no $ per sq ft can affect this. Presumably these are excluded from the top and bottom of the calc, but either way that doesn’t help the reliability of the data.
    also important is listings by district – in fact I think this would be critical as shifts towards one district being more prominent in the listings could have a huge effect. OK, yep, call it mix…

  21. Posted by REpornaddict

    But no, I’m not seeing a 20%drop either – even going back a year and two months.
    A drop to 20% to 506 is 632 – I don’t see that anywhere in 2007?

  22. Posted by Sleepiguy

    I really have no statistics to back up my assertion. It’s just from observing my local market for the last 10 years or so.. Most of the top realtors have pretty paltry summer listings and then, a few weeks after labor day, you start to see really desirable properties hit the market. Take a look at, say, Malin Giddings’ website. She had one listing this summer and now she’s got 3 Pac/Presidio Heights listings “coming soon.” It’s like this every fall, at least in district 7. Whether the fall bump is designed to accommodate the realtor’s schedules or their clients, I don’t know.

  23. Posted by Trip

    I see there are something like 160 or 170 new listings just since Labor Day. I agree that this fall listing bump seems illogical, but it looks like the 2008 pattern may hold true to form.

  24. Posted by FSBO

    The Active count now stands at 1,472 – a big increase from earlier this week as Trip points out. The sales count for August is now 383 – down about 20% from July and from Aug 07. Here are the sales counts, mean price per sf, and median selling price for Aug 08, Jul 08 and Aug 07:
    SFH + Condo
    Aug 08: 383 sales, $630 mean psf, $785K median
    Jul 08: 486 sales, $656 mean psf, $803.5K median
    Aug 07: 492 sales, $685 mean psf, $818K median
    SFH
    Aug 08: 189 sales, $576 mean psf, $845K median
    Jul 08: 222 sales, $597 mean psf, $849.5K median
    Aug 07: 209 sales, $654 mean psf, $915K median
    Condo
    Aug 08: 194 sales, $685 mean psf, $725K median
    Jul 08: 264 sales, $716 mean psf, $776.1K median
    Aug 07: 283 sales, $716 mean psf, $720K median

  25. Posted by San FronziScheme

    Always interested by your numbers, FSBO.
    What’s most interesting in these sales figures is the YoY $psf change. Condos are only down 4% but SFHs seem to be taking a hit at around 12%. Even the MoM numbers do not look too good with 3-4% decreases.
    Of course the mix could be at play there. i.e. some districts selling more, or the quality of products sold changing. We’ll see in the next few moths if this trend is confirmed.

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