CFAH

San Francisco Listed Inventory: 3/02/09 (www.SocketSite.com)
Inventory of Active listed single-family homes, condos, and TICs in San Francisco rose a nominal 1.1% over the past two weeks (versus an average of 6.6% for the same two weeks over the previous three years) and is now running 24.4% higher on a year-over-year basis (up 11.8% for single-family homes and 33.2% for condos/TICs) and 66% higher at the end of February 2006.
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 Update: 2/17/09 [SocketSite]

Comments from Plugged-In Readers

  1. Posted by eddy

    What these numbers don’t show obviously are the # of pent up properties, pulled properties, and pocket-listings. It’s pretty amazing to talk to agents. Everyone has 3 or 4 pockets. Crazy. Sure these were there in 2008,2007, etc… but the extent to which I’m seeing the off-market homes is pretty unprecedented. I remember in 2006 when inventory was so low and property turnover was so high.

  2. Posted by anonn

    “I remember in 2006 when inventory was so low and property turnover was so high.”
    I remember 2006 too. Wow. Seems like three years ago. My how time flies.

  3. Posted by eddy

    anonn, not sure I understand the sarcasm? I was just making a reference to old times and the comparison / contrast of the markets. The inventory and sales are really crazy. I don’t think even the biggest bears in SF could have seen this coming. (I’m sure this comment will get a few replies! 🙂

  4. Posted by anonn

    Don’t mind me. I just thought saying, “I remember in 2006 .. ” was funny. That’s all. I mean, I certainly hope we all remember three years ago.
    Inventory is going up, true. Sales are way down from highs of course but seemingly way up from what they were in January, let alone November and December’s volume nadirs. Saturday was the first time that I can remember where for a few hours or more sales outnumbered new listings. It’s mostly lower priced stuff that’s selling, but several mid to high priced properties also sell daily. It is indeed an interesting market.

  5. Posted by steve

    I wonder what role the net plays in buyer psychology. The last time I purchased was in 96 and agents controlled all of the information. After a 3 month search, I still felt uniformed about the market — and I was looking in a very narrow area and price range.
    Today, my search net is much wider and it is infinitely easier to track data. As a result, it is clear to me that waiting for further (inevitable) price reductions is the best option right now. I wonder if the explosion of real estate sites and information was just as powerful in fueling the 05, 06, 07 run-ups. If you were tracking DOM and recent sales closely, a feeling of “buy now or be priced out forever” would have been hard to shake.
    Can redfin, zillow, etc create more of a snowball effect that would have been possible in the 90s? Or, alternately, is it possible they will provide a softer landing in SF as it is much easier for people to pasively track their dream properties and wait for an opportunity than it would have been if you were entirely dependent on an agent?

  6. Posted by LaughsLast

    2006 does indeed seem like at long time ago. Representatives of this industry were actually taken seriously:
    http://www.realtor.org/press_room/news_releases/2006/10/ehs_sept06_existing_home_sales_ease

  7. Posted by anonn

    Another point is how are the zillows and redfins of the world looking these days? I don’t see any Help-U-Sell signs anywhere anymore, or ZipRealty. Their revenue streams are discounted to begin with, and volume/revenue is down. Also, who is advertising on Property Shark, and why?

  8. Posted by badlydrawnbear

    I don’t think even the biggest bears in SF could have seen this coming.

    You’re being facetious right? Because there were plenty of bears here on socksite arguing that large inventories, plunging sales volume, and 30-50% price drops for SF (even the “real” SF) were a sure thing for several years now.

  9. Posted by eddy

    anonn, all good — sorry for being defensive. There is more activity around and there is a lot of price discovery. Buyers are making low offers; and that never happened in 06/07 — buyers just waited for the agent to drop price and they there would be a bidding war! Eventually once the financial markets stabilize in the dow 5000’s I actually think we’ll see activity pick up. So much fear right now.
    A new listing on Jackson st priced at 500psf is going to probably fly off the market. Same with a new listing in Laurel that makes the other $4m place look like a joke. Agents are starting to get more aggressive on pricing and that will shake some buyers out.
    steve, i think the internet has accelerated the rate at which consumers receive information in RE. Used to be that USA Today, 20/20, Time, BizWeek were the communication mediums for this sort of market shifting news as they reported the facts. The the facts aren’t so much reported as they are discovered real-time. Pre-internet, the lehman failure, the foreclosure activity, etc.. all would have taken months or at least weeks to trickle out to the masses. Now it’s diseminated and its forcing the major media outlets to turn stories out much faster. Hard to keep up sometimes!

  10. Posted by unearthly

    Also, who is advertising on Property Shark, and why?
    If you sign up you get 8 free reports a day; after that you have to pay for extra look ups and advanced features.

  11. Posted by Trip

    Anyone willing to post the February sales numbers from the MLS? From what I can glean, it looks like they should be around 150 — pretty close to January’s numbers. That would put SF around 10 months of inventory or more. I’m even more curious about the >$!.5M segment which SS seems to focus on — that looks far slower.
    2007 and 2008 both had the anticipated “spring bounce” fizzle, but not terribly so. Back then the bottom had dropped out on the low end, and it looks like we’re seeing the reverse now. But the trend there certainly should be more clear in the next several months.

  12. Posted by Jorge

    @anonn
    “Another point is how are the zillows and redfins of the world looking these days? I don’t see any Help-U-Sell signs anywhere anymore, or ZipRealty. Their revenue streams are discounted to begin with, and volume/revenue is down. Also, who is advertising on Property Shark, and why?”
    I always thought Zip/Redfin’s main appeal was more on the buy side than the sell side. I wasn’t aware that Zillow managed any percentage based real estate transactions, though. I’d be curious to know if anyone knows how well Ziprealty and Redfin are doing and if they’ve used their services. It seems that rapidly decreasing transactions coupled with lower prices should squeeze the agent market significantly in the coming year. It will be interesting to see if Zip and Redfin get follow on rounds. Long term I think they both have interesting models that work for knowledgeable buyers in the local markets.

  13. Posted by anonn

    February sales were 180 in number and up 5 from January’s 175 according to the MLS. That accounts for SFRs, condos, TICs, 2-4 units, 5+ units, commercial, and unlisted solds. Remember that February had three fewer days though, and the numbers are still coming in.

  14. Posted by ex SF-er

    not to be too repetitive,
    but SF continues to follow the pattern that other bubble markets exhibited (specifically San Diego) with a time lag of a few years.
    but again, I don’t make too much of January/February numbers even though inventory today is running 76% higher than 2007 levels… just too few transactions due to seasonal issues… we may also be seeing increased inventory right now as people rush to get their homes to market before others for the spring rush…
    the real tell will be when the May numbers come out (in June). that will be sufficient numbers to give us some better info.
    that said, I doubt there’s any question that SF’s real estate market is under pressure… which has been foreseen for some time by many.

  15. Posted by anonn

    And not to be repetitive but a lag time of two years is a different pattern all together.

  16. Posted by Trip

    Thakns anonn. It looks like Feb and March typically see a bit fewer closings than Jan, so the Feb numbers are actually not disastrous, (relatively speaking). However, are we seeing an outsize and growing number of REOs and very low end places being sold? That would follow the pattern of other regions that have been slammed and would make the pure sales numbers look better than the market’s real state (hence, my interest in higher end sales stats).
    April-July is where we’ve seen the big leap in volume in past years, and I agree that those data will be a better indicator of things.

  17. Posted by eddy

    badlydrawnbear — I was only half serious as I know there were lots of people predicting this mess (myself included to some extent); but I’m not sure anyone thought the turnaround would be this quick. Then again, some of the loudest voices on here have been pretty aggressive.

  18. Posted by FSBO

    Here are the total sales for single-family homes and condos (combined) in San Franciso for Jan and Feb respectively:
    2009: 154, 174 (reported as of Mar 2)
    2008: 225, 310
    2007: 308, 380
    2006: 295, 399
    2005: 352, 354
    2004: 371, 378
    As Feb sales reportings continue to come in, I suspect that the Feb count will rise from 174 to about 200.
    [Editor’s Note: Cheers: Early February Listed Sales Count For San Francisco: Down 35-40%. And as always, thank you for plugging in.]

  19. Posted by LMRiM

    Wow, interesting data FSBO. It looks like there are not enough liferafts on the Titanic.
    If it’s not too much trouble, could you post median prices and mean $psf data?

  20. Posted by FSBO

    And meanwhile in southern Marin, there have been a total of 4 sales of single-family homes in Tiburon and Belvedere so far this year. There are 80 active listings in those areas – so that works out to a 40-month supply (and this excludes many unsold expired listings).

  21. Posted by Jorge

    Thanks FSBO.
    So percentage-wise February looks to be the same or worse than January YoY.

  22. Posted by FSBO

    Here are the MLS numbers for Jan 09 & Feb 09 (as of Mar 2) broken out for SFH’s and condos:
    Jan09 SFH: 82 sales, $609K median, $481 psf
    Feb09 SFH: 94 sales, $712.9K median, $514 psf
    Jan09 Condo: 72 sales, $622K median, $600 psf
    Feb09 Condo: 80 sales, $751.5K median, $639 psf
    Jan09 Total: 154 sales, $610K median, $541 psf
    Feb09 Total: 174 sales, $724.5K median, $576 psf
    Pretty big jump in the median price and mean psf for Feb over (the really low) Jan. I’ll post some stuff by district soon – but may want to wait until the late Feb reportings trickle in.

  23. Posted by Trip

    Whoos — so my remark above about February typically seeing fewer closings that January was wrong. I just noticed that the web site I was using for that posts past data as 3-month moving averages. So I guess February looks to be continuing the extremely slow January trend. With sales down 50% (and I suspect averages are down as well meaning the hit to industry commissions is even worse), I can see why we’ve seen recent public signals to pressure clients to reduce list prices.

  24. Posted by anonn

    “It looks like Feb and March typically see a bit fewer closings than Jan”
    I don’t think that could have possibly been the case this year. January got the seasonal whammy plus the post-September fallout plus a litany of newer bad financial news stories one after another. Nowadays even though the news might even be worse or else just as bad, in terms of news cycle it has lost its newness.
    “However, are we seeing an outsize and growing number of REOs and very low end places being sold?”
    Yes, lower end + REO has been greatly affecting San Francisco mix for about seven or eight months now. However, every day properties still sell for near peak prices too. Today so far, 814 44th Ave a 2/1 fixer way out in the Richmond sold for 724K, 2301 37th Ave a 2/2 corner home very similar to that Ortega property (except nicer) sold for 835K, 45 Deming a very nice Corona Heights 2/2 sold for 965K, and 1300 20th a small 2/1 in Potrero Hill sold for 809K. A 2/2 in the Brannan closed for 1/.495M with an asterisk after five weeks on the market too. (That one might be an apple. It sold for 1.475 in ’05.)
    Anecdotes all sure. But capitulation is simply not occurring, nor is freefall.

  25. Posted by Jorge

    @Trip
    With respect to industry commish, my estimate is 0.66 (Sales number decrease based on FSBO’s numbers) * 0.8 (Sales price assuming a 20% drop in home prices from 2008), or 52.8% of last year’s commission revenue rate. That’s a huge drop year over year especially considering 2008 was no banner year.

  26. Posted by LMRiM

    Thanks for the data, FSBO. With these very low volume numbers, we should see a lot of instability in the medians and summary stats.

  27. Posted by eddy

    Jorge, I’m also hearing that buyers are negotiating commissions more than they used to be as well. There is a lot of competition for these listings. Supply/Demand works on the Agent / Commission side of the business. 6% isn’t what it used to be.

  28. Posted by ex SF-er

    And not to be repetitive but a lag time of two years is a different pattern all together.
    huh? You can’t be serious.
    it’s comments like these that make you lose credibility.
    of course one can have a similar pattern with a time lag. time lags do not mean “different pattern”
    an example:
    school.
    I started school with kindergarten, and progressed all the way to 12th grade and graduated.
    There are millions of children who are following that exact same pattern today, with a time lag of a few decades.

  29. Posted by ex SF-er

    I agree with anonn that it is doubtful that Feb March sales will be lower than January’s, for the reasons he already stated.
    Regardless, I really look at the current info as more “noise” than anything. month of May will be critical IMO. that month should have the numbers of sales required to be of any statistical significance.

  30. Posted by anonn

    ex-SFer, how do you figure? The patterns are not congruent, period. If you were to cut them out of a cardboard chart and lay them atop one another they would not match. You and others like you insisting that the same thing is happening here with a two years lag is what strains credibility. It isn’t. Those two years are not nothing. It’s different regions with different housing stock, different jobs markets and different demographic makeup behaving differently.
    Although, again, according to Case Shiller from last week the rate of deceleration for price in SF IS second to SD.

  31. Posted by Jorge

    @flujie
    “It isn’t. Those two years are not nothing. It’s different regions with different housing stock, different jobs markets and different demographic makeup behaving differently.”
    Complete B.S. SF is special, but not special enough to be the only region in the US to “retain” its inflated run-up prices. Keep selling that same line to clients and you can expect the YoY sales to continue falling. It strikes me a bit odd that realtors are trying to defend home values when common sense should tell them to do the opposite right now to assist price discovery. Until we get there, few banks and bagholders will want to join the speculation on how far this will drop. Meanwhile realtors will be facing the double edged sword of reduced turnover AND reduced prices.
    It really is all macro now, brah.

  32. Posted by mktwatcher

    What’s happening in SF real estate reminds me of the Nasdaq in late 2000. The bubble has popped and the party is over. Believe me I remember it because I held a bunch of tech stocks through that period that I wish I hadn’t. I even read an article around that time about how people psychologically are much less apt to book a loss than book a gain even when prices are going down and down. Human nature causes you to hope and hope that it’s a temporary decline and that the conditions that created the earlier high prices will magically re-appear. It’s not and they won’t. I had sevearal conversations over the weekend with people who went to get appraisals for re-financing and are sick about the numbers the banks came back with. The rationalization is that the banks don’t really want to lend. The truth is that they aren’t going to lend at a today price when tomorrow’s is going to be a whole lot lower even with the common 30% down requirement.
    I expected a longer, slow decline but I think what we have here, in fact, is the hard landing our friend Mr. Paulson tried so hard to avoid.

  33. Posted by anonn

    I’m not selling anything to anyone, Jorge. I’m asking you and others like you to explain why those two years and a half years are nothing. Why it’s OK to subtract them from the chart, and to slide SF over so that it’s congruent with San Diego.
    I said SF is a different region that behaved differently than San Diego.
    Predictably, you said, “selling this to clients,” “defending home values,” “realtors this realtors that.” etc etc.
    You don’t know what I say or do other than what I challenge you and others like you with on here.
    You’re always going after me with such aggressive language, man. I really don’t get it. Learn how to express yourself contrarily without hostility or something. Sheesh.

  34. Posted by At this point, DENIAL is not a STATE, it's a COUNTRY

    My name says it all

  35. Posted by anonn

    The Nile is a river. Denial is a state of mind. Something got lost in that metaphor mix. You might as well have said, “DA NILE AINT JUST A RIVER IN FRANCE NO MORE!”

  36. Posted by tipster

    Anonn, SF held on because of jobs. The theory was that China and other emerging markets were now self sustaining, and when the U.S. tanked, they would still be buying.
    What, pray tell, do we export like crazy: Tech and Airplanes. So the Bay Area and Seattle held on longer, because businesses were not as likely to pull the plug on their employees in those two fields, and so areas that had a lot of tech or tech and planes found that their real estate prices held on longer than areas in which a greater percentage of jobs were related to the bubble itself: SD, Stockton, Central Valley, Las Vegas, Phoenix, Orange County, etc.
    Its tough to hire new employees: you take a risk, have to train them, etc. When things started turning down, the tech companies boards told the management to hold on to the employees: don’t be too quick to fire. The home builders and areas related to them closed up shop. This caused problems for some areas, not for others.
    Tech is now getting slammed. Instead of the gradual layoffs that Sears and Lowes and the homebuilders had, tech spending has fallen off a cliff at the same time that people realized that the other economies were not going to bail them out. So areas dependent on tech are getting hit harder than other areas, because they were all holding on long past when they should have started laying off. Lots of catch up in downsizing going on here in the Bay Area.
    Not that the country has stopped laying off: the country is losing 600,000 jobs per week! But tech was thought (hoped) to be relatively immune until about 2 or 3 weeks ago. No one thinks that any more and it’s hitting everything hard.
    That not only hits jobs, but buyout opportunities, stock prices, everything.
    The reasons are more complex than the above, there are other factors, such as reset and recast schedules, and a lot of other factors, but that’s a big part of what you are seeing right now.

  37. Posted by anonn

    Yep, jobs. Exactly. If tech/biotech/clean tech/web goes like you say it will then perhaps SF will mirror SD after a year or two. If it goes like other analysts say, and tech is something that will help get us out of this recession sooner than other industries, then SF will never go that route. It remains to be seen. However, flatly saying “slide this chart over two and a half years and this equals that” is not a fair thing to say right now and I’ll argue against it every single time. Also, let’s be honest. Revenue and profit down requiring strategic layoffs is not equivalent to wholescale implosion, or quarter after quarter of loss. Loss and profits not making estimates is only the same thing in to Wall Street.

  38. Posted by ex SF-er

    I see what you’re saying anonn… but please recall what I’ve actually said.
    What I’ve said is that the years prior to the SD downturn there were high numbers of sales and very low inventory, with everything selling everywhere quickly.
    as the downturn began in San Diego, (2005) you saw in increase in inventory and decreased sales, but the median pricing was pretty stable. so there was argument about whether or not there was a downturn at all
    (**this corresponds to what we saw in 2007 in SF)
    The following year (2006) we saw an increase in inventory again with decreased sales again, with only slight median price drops, but more significant problems in the non-desireable areas.
    (**this corresponds to what we saw in SF in 2008)
    the next year (2007) was when we saw significant drops in home prices in the outlying/less desirable areas, with “Prime” SD holding up with only mild price drops.
    (this is what we are seeing in SF in 2009)
    then in 2008 it all worsened, and the damage was happening in more central and more prime locations.
    (we are starting to also see this in 2009 in SF, but not as bad as what 2008 was like in SD)
    you are correct, if you overlay the graphs you will not get an exact overlap. I’m talking about the pattern of downturn in this RE downturn.
    You keep saying “SF’s downturn is different than those other cities” but I hardly see that. SF’s downturn seems remarkably similar to other metro areas. The downturnn begins insidiously, takes a few years, hits the outskirts and “less desirable” areas first, then works its way inwards. the downturn may or may not affect uber prime areas. (for instance, home prices have held up fairly well for the Mission Hills Nabe in SD, as well as La Jolla… which correspond to the prime SF and Marin).
    will SF always follow this pattern? I dunno. but it is following quite nicely thus far. which is why the smart bears have been predicting a very slow and steady downturn in SF RE as opposed to blood in the streets… because RE markets don’t usually work that way.
    patterns my friend.

  39. Posted by ex SF-er

    Yep, jobs. Exactly. If tech/biotech/clean tech/web goes like you say it will then perhaps SF will mirror SD after a year or two
    not necessarily.
    SD’s downturn happened BEFORE the layoffs and job problems occurred. it happened because the house prices simply got so high that people couldn’t afford them any more.
    it wasn’t until AFTER the downturn that the major SD job losses happened (2007 mainly).
    likewise, SF’s downturn started prior to job losses. now the job losses are mounting, which puts further pressure on the RE market.
    but I agree with you, these aren’t exact carbon copies of one another… just trends/patterns. If your point is “they’re not exact in every single way” then I agree with you.
    I’m just looking at the overall macro patterns… and there will certainly be variation from the patterns due to the time lags.
    lastly:
    I think you guys OVERESTIMATE San Diego’s downturn. Just like in SF, SD has areas that have been slaughtered (Chula Vista, far out areas, bad hoods, gentrifying hoods, downtown highrises) and areas that are struggling but doing not super bad (Mission Hills, La Jolla, etc). as anonn says “it’s all micro dude”. And the same with San Diego. There are areas getting slaughtered within a few blocks of areas holding up fairly well in SD. there are certain perfect properties that still get multiple bids, and others that go 30%+ off… and like everywhere else, SD was affected by the most recent credit crunch even more than prior.

  40. Posted by Conifer

    eddy: “A new listing on Jackson st priced at 500psf is going to probably fly off the market.”
    Right you are, because it is a potential great single family house, what the left wing of the Planning Commission spitefully calls a “mansion”, even if currently chopped into four. (May need Ellis.) Nice eastern PacHts neighborhood. And a big garage, which unfortunately overwhelms the facade from the street. Very few big houses come on the market that meet all these criteria in this price range.

  41. Posted by Jorge

    @anon
    “Yep, jobs. Exactly. If tech/biotech/clean tech/web goes like you say it will then perhaps SF will mirror SD after a year or two.”
    Jobs are going EXACTLY that way in SF. No perhaps about it. I work with ALL of these sectors (including construction and law) in the BAY AREA. Every single one is cutting back on staff and trying to cut costs any way they can.
    The fact that RE volume has dropped 40% and prices have dropped over 20% has obviously evaded you. But then again, so have the multitude of warnings from the posters on this site.

  42. Posted by anonn

    “prices have dropped over 20% has obviously evaded you.”
    It sure has.
    Prove it, angerman. Don’t go giving me any MSA chart either. What’s this website about again?
    If you’re gonna stand on principle and rave, prove it.

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