Pending U.S. home sales increased 3.2 percent from February to March (which shouldn’t have caught anybody by surprise) but also increased 1.1 percent higher on a year-over-year basis (3.9 percent and 1.7 percent respectively in the West). Think foreclosures.
At the same time, a plugged-in reader’s early count of closed April sales suggests a year-over-year drop in activity of around 40 percent for listed properties in San Francisco.
∙ Pending Home Sales Rise, Housing Affordability Near Record [Realtor.org]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]
∙ 465 Hoffman: Architects Unveiling This Evening (And On The Market) [SocketSite]
Call me skeptical but I’ve come to literally trust nothing from NAR. Nothing. Couldn’t pending home sales, a statistic I don’t recall being published much before, be accounted for by simply taking longer than historical averages for homes to actually ‘close’. That is, more homes with financing / home sale contingencies, etc… taking longer thus pushing the stat of ‘pending’ homes much higher. It is certainly reasonable to assume that homes are taking longer to close. And given the speed that most homes closed with during the boom years — it wouldn’t take much to make the ‘pending’ stats look good on a YoY basis.
I see fewer realistic listings now than in January. I think the sellers are more hopeful than ever in recent times, thanks to Hank Plante rebound and low interest rates. I predict even fewer closed sales as the year progresses, till the sellers wake up and smell the market once again. Buyers are in no hurry, the rent is falling like a rock.
It is certainly reasonable to assume that homes are taking longer to close.
Why?
As someone doing some SF Real Estate open house lurking yesterday, yep, happy days and 2007 pricing is here again!!!
Woohoo…
I’ll be back to a few of those listings when they drop 20% to 2009 reality though…
In other news, 43 Topaz Way has a horrible floorplan and no yard IMO, sigh.
Why?
Well you either agree with the my underlying philosophy or you do not? I’ll assume that you do otherwise it would pointless to ask “Why?”.
In terms of why I think it is reasonable to “assume” it’s taking longer for homes to close (and this is covering the broad RE market, and NOT just SF), it has become significantly more complex to secure financing, get qualifying appraisals, and it’s clearly taking longer for existing homes to sell. Assuming that most home buyers will need to sell their existing home prior to closing on a new one would certainly extend the close process. Lastly, during the boom there was a definite contraction of closing conditions (e.g., waived home inspection, financing, fast close) to sweeten the offer. So even if the close process was returning to pre-boom conditions the number of “pending” sales would increase. The fact that we’re probably experiencing longer ‘closing’ windows would skew this data even further.
I’d love see some data points one way or another.
“As someone doing some SF Real Estate open house lurking yesterday, yep, happy days and 2007 pricing is here again!!!”
Your kidding right? I am not shopping right now but hey if what your saying is true I would potentially consider selling now.
GWTF, I thought you were going to stay where you are for awhile?
“Your kidding right? I am not shopping right now but hey if what your saying is true I would potentially consider selling now. ”
Kidding? No… Pricing != Sales…
What I was referring to was pushy realtors and high asking prices… Plus the insistence that I needed them to negotiate the best price possible… 43 Topaz Way’s price was “available upon request” for example…
But I’m someone who will likely end up renting something somewhere in SF for 6 months to a year to figure out when, what, or if I should even bother to buy here as I already own something really nice outside the city and I really don’t want to sell it unless my socks are blown clear out of my shoes.
He he… good memory. Yes I am staying and want to stay – very happy. However if I can make some $ than great, rent for a bit wait for a deal; end’s up a win win. Perhaps buy rental units and rent myself (multi). 0 profit (including factoring of closing cost etc.) = I happily stay on course with the current long term plan.
i do see a lot of traffic at SOMA open houses, which initially makes me think a unit is going to sell because of such apparent strong interest, but the same units are still sitting the market after weeks and months.
There are a lot of potential buyers in the marketplace in general right now, especially in the 800K and under category. But most of them are waiting for come to god price discovery moments it seems.
But most of them are waiting for come to god price discovery moments it seems.
buyers’ psychology is interesting. it fueled the bubble and it will likely create the very added reductions on the way down.
this is not directed at anonn, but most agents at open houses go out of their way to tell me this is a once in a lifetime opportunity and emphasize the benfits of low rates. I wonder how many more months of stalemate it will take for agents to start pressuring their clients to be more realistic on price. (speaking about the 1.5-2.0 market now)
But most of them are waiting for come to god price discovery moments it seems.
Most are waiting for the prices to fall in line with traditional PE ratios. And by “in-line” I mean somewhere in the ballpark, which currently, they are not.
As an anecdotal side note, I know of several families with kids in a private SF middle school who are now planning on moving to the burbs. Some own, some rent but they all want to save tuition and housing costs so that they are ready for the college bills/golden years.
So yeah, the “come to god price discovery moments” may be on their way. In this case, patience is a virtue.
It seems we’re headed for massive inflation and my prediction is that we’re not going to see any RE appreciation, let alone inflation adjusted appreciation, for a long time. I honestly don’t know if holding RE assets are going to be a better bet than sitting on your cash and watching it’s buying power diminish.
honestly don’t know if holding RE assets are going to be a better bet than sitting on your cash and watching it’s buying power diminish.
so, eddy, buy gold and rent?
$800k my ass, I’d rather pay $2800/mo for the same unit. And the rent will come down to $2500 by the summer. Argenta is already there. (http://sfbay.craigslist.org/sfc/apa/1154150022.html)
Steve,
“I wonder how many more months of stalemate it will take for agents to start pressuring their clients to be more realistic on price. (speaking about the 1.5-2.0 market now)”
The problem is that there’s still a trickle of peak sales occurring. An SFR in Glen Park at 80 Mizpah just went for about 100K more than I would have guessed, today. There was that fixer on Anderson last week. The Gaviota Way sale. And on and on. Sellers look at these things and think, “I can get that too.”
As far as “once in a lifetime opportunity” type salesy pitches … I feel like the risk-reward for that type of talk isn’t worth it. You get branded a charlatan by a group, they tell their friends, and on and on. But your mileage may vary. Some people are just cheeseballs. Whattyagonnado?
The Gaviota Way sale.
Do you mean 7 Gaviota? It took them a year to sell that house.
But it sold, and it sold for well over 1M, when the CW is that the neighborhood doesn’t support 1M+.
Buy gold? Not clear that gold isn’t also in its own bubble.
What did 7 Gaviota sell for?
One point one eight
Keep this in mind when you hear some of the reports trickling out this week, from one of my favorite sources of information:
http://www.theonion.com/content/news/nation_ready_to_be_lied_to_about
The discussion of California income tax revenue has been moved to: California Income Tax Revenue Drops 44% Year-Over-Year In April. Now back to that other forty-something percent year-over-year decline (in listed San Francisco sales activity)…