According to DataQuick, recorded home sales volume in San Francisco fell 33.6% on a year-over-year basis last month (402 recorded sales in April ’09 versus 605 sales in April ‘08) but rose 21.1% compared to the prior month (which seasonality would foretell).
San Francisco continued to experience the sharpest year-over-year decline in sales volume of any Bay Area county in April with San Mateo (-22.5%) and Marin (-19.4%) the only other counties recording declines. San Francisco’s median sales price in April was $628,500, down 16.2% compared to April ’08 ($750,000) but up 3.4% compared to the month prior.
For the greater Bay Area, recorded sales volume in April was up 13.1% on a year-over-year basis (a sharp decline from the 32.6% average YOY gain of the past seven months) and up 12.9% from the month prior (7,139 recorded sales in April ’09 versus 6,310 in April ’08 and 6,325 in March ’09), while the recorded median sales price fell 41.3% on a year-over-year basis, up 4.8% compared to the month prior (the first uptick in 17 months).
Last month’s sales were the second-lowest for an April since 1995 and were 23.2 percent below the average April sales total back to 1988, when DataQuick’s statistics begin.
Foreclosure resales – homes sold in April that had been foreclosed on in the prior 12 months – accounted for 47.4 percent of Bay Area resales. That was down from 50.2 percent in March and 52.0 percent in February. Last month’s figure was the lowest since foreclosure resales were 46.8 percent of existing home sales last November.
A lower concentration of discounted foreclosure resales in the statistics is one reason the median sale price has recently begun to more or less flatten, or at least erode more slowly, in many markets.
At the extreme, Solano recorded a 67.1% year-over-year increase in sales volume (a gain of 288 transactions) on a 43.7% drop in median sales price.
As always, 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).
∙ Bay Area home sales rise again; median price up slightly over March [DQnews]
∙ San Francisco Recorded Sales Activity In March: Down 34.6% YOY [SocketSite]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]
Huh, so the median price is still getting its usual seasonal uptick and SF is still way more expensive then a lot of other regions.
I just read this article and I am always amazed at how little we get for our money in SF compared to other places:
http://finance.yahoo.com/real-estate/article/107100/What-Will-$400,000-Buy-Today?
Median sale price is largely just a function of what sort of property happens to be selling.
First Republic commissioned from Case Shiller Weis an index of homes sold in eight Bay Area counties for more than $1 million. The average home value in this group is now $2.9 million, down from a peak of $3.1 million in 9/07, with price/sqft of $508, down from a peak of $533, also in 9/07. Still not much movement in this market. See http://tinyurl.com/qnwpex for more.
Rillion:
The problem with that article is that most of us don’t want to live in any of those places. Have you ever been to suburban Denver?
That looks like a bigger than usual bounce though.
last year it was reported the bounce was
“19.1% compared to the month prior (in part due to seasonaility, but also a significantly stronger gain than compared to the past couple of years)” so the April bounce seems to have been strong the last couple of years.
Any chance an update on the seasonality chart?
Sales fell from March to April in ’07, for example..
When those two lines converge…
@Rillion,
Speaking for myself, the job I currently enjoy would not be possible in any of the ten cities on that list. I create software for a web company, which means that I can either live in SF or the Peninsula.
Not even New York or Chicago would cut it.
Oh, and my job is awesome and pays well, so it makes up for the fact that my RH home is more expensive than a similarly sized lot in Fort Wayne.
Oh, and I live somewhere freakin awesome, and love life and love having awesome, interesting neighbors and the Bay a few steps from my front door.
So, yeah, that’s why SF real estate holds up.
Does this include new developments? Take out “hot, hot, hot” infinity, and the volume could be down more like 50%.
[Editor’s Note: As noted above: “As always, 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).”]
Not really though Fishtarian. Both the current and prior year contains these types of sales.
In fact last year there was much more discussion on this, how the Dataquick and MLS sales had such a discrepancy (180 or so),whether these sales should be counted, discounted or whatever.
You can’t just remove the current years new developments from the figures, and leave in the prior years sales every year.
I am guessing non new developments sales are no where near 50% down YOY – probably around the 33.6% here including them, and maybe even lower??
[Editor’s Note: Listed April sales, which are less likely to include new development sales but also misses “off market” transactions, were down 27.5% YOY. Unlisted sales volume fell 44% YOY despite Infinity being “hot, hot, hot.”]
Hey sortanewbuyer and rr, I didn’t comment on the desirability of the bay area. I’m here and not in any of those cities for a reason. Even though I enjoy SF and love living here it still does amaze me how little house/condo you get for your money here. Our median house price is way above those properties in the article and what you would get here for that amount is that cruddy little 560 sq ft shack on the other thread. That is crazy.
I’ve said for a while now that I’ve been waiting for the May numbers since those are part of the true peak homeselling season. we need to wait for one more month.
that said, clearly RE in SF is continuing to slow and clearly valuations are falling. the only question it would seem is to what degree.
we’ve endured about 1.5 years of RE downturn now, and have maybe 2.5-3.5 years to go. it’ll be an interesting journey. the govt continues to try to prop up housing, so we’ll have to see what happens there. I, for one, doubt it will be of much benefit.
that said, I’ve been noticing an awful lot of dollar destruction again lately. (stocks up, gold up, oil up, Euro up, Pound up, many commodities up).
we’ll see how this impacts housing going forward.
I agree with (Sorta)NewBuyer. To me, the ratio of home pricing to median income is an indicator of how badly people want to live in a certain place, not an index of mass hysteria– at least when you compare this ratio from one place to another.
Also, as I’ve posted before, a lot of wealth in the Bay Area comes from liquidity events (i.e., sale of companies). This means that people have a much higher ratio of net worth to current income than, say, New York, where there are a bazillion jobs that regularly pay big salaries.
Rillion, it comes down to preferences.
Many people are happy to commute two hours to a large house on a small plot in an ex-urb because sqft is the most important thing to them.
On the other hand, some people value short commutes, cool/smart neighbors, fun jobs, vibrance, etc. For instance, I’d rather live in 1,000 sqft in San Francisco than 5,000 sqft in Vacaville.
I don’t judge people who disagree with me. That’s their preference set, and God bless them because they “keep down” the price of SF real estate. You just need to acknowledge that prioritizing things like quality of life, view, short commute, and having neighbors like you and friends you can see in 5 minutes over home size is a reasonable view.
I create software for a web company
Dear NewBuyer,
We have outsourced your job to India. Thank you for your contributions to the company. Once you have finished training your replacements, we will no longer require your services.
-The Management
EBGuy … that was Cold! 😉
lolcat_94123 – seems like you are more stuck on The Marina rather than San Francisco. See ya at Circa tonight with all the diverse and interesting people. lolcat_94123 where are you originally from?
“Oh, and I live somewhere freakin awesome, and love life and love having awesome, interesting neighbors and the Bay a few steps from my front door.”
“Oh, and I live somewhere freakin awesome, and love life and love having awesome, interesting neighbors and the Bay a few steps from my front door.”
“So, yeah, that’s why SF real estate holds up.”
NewBuyer, you don’t have to support SF RE to enjoy all that. I just signed 750 sf at Paramaount with awesome view for $2100. You pay way more to buy a POS in a POS location like:
https://socketsite.com/archives/2009/05/bank_owned_and_back_on_the_market_on_the_north_slope_of.html
@Rillion:
Also, to be sure, there are a confluence of factors beyond just desirability that create our high prices (geographic constraints, laws artificially limiting supply, etc)
The point is not if SF prices should be the same as Kansas the $100K question is if they will stay at this elevated level for long.
In other worlds how high is high?
I would put the blame for the poor sales volume soley on the realtor/MLS system. They are artificially limiting the supply in order to try and maintain current price levels. Even if a building has multiple units for sale, it is typical to only list one and rlease the other when the first unit has closed. To get sales back up, they need to list all the units and let competition determine a fairmarket value. This would drive prices down and clear up the shadow inventory backlog.
It is a rigged game here currently.
That makes no sense for the developer, and so why would they do it. They are in the business of selling for top dollar, not market clarity. Plus if that’s the developers decision why “soley” blame the realtor.
^ my point exactly. The developer makes the call. Do you expect them to dump all the units at once so you can get a better deal. Me mo think so.
Rillion- you can complain about value in SF property, but it’s all relative bro. You get even less in manhattan, Tokyo, London, hell, even the good parts of Moscow.
I think the lower end in SF (meaning sub $1 mil) is starting to stabilize. I don’t think the reduced sales volume is a direct correlation with median prices. Rather, median is influenced more by sales mix. So lower end SF has a good chance of stabilizing, and if we avoid a prolonged resession or double dipper, the -10% this market segment sustained will be pretty minor in the long run.
Not a bad way to escape this recession. Why? Sorta new buyer said it best: Cause SF is special. Really special. Super duper special IMO. Me love SF!!
@schwede –
For actual purchasing of RE I would be buying in district 7, so of course I’m very interested in the happenings there. But that being said I’m still interested in SF as a whole.
To answer your question I grew up in Orange Country, came up here to go to Berkeley and stayed. I live in the Marina because I love the palace, the views and the water. Sure the people here have a bad rap but it doesn’t take long to learn to ignore the annoying ones and enjoy the neighborhood. 😉 I too go outside the ‘hood when I want to diversify. But I’ve lived in plenty of other neighborhoods and for a home base this area is hard to beat imo.
45yo hipster, you are smoking something really strong! No way has the “lower end” fallen by only 10%. More like 20-30% to date. 40% in lesser neighborhoods. Just look at some of the Bernal and D10 places on this site. I realize that the high end is falling farther and faster at this point, but the low end so far has fallen at least as much.
And no way is anything stabilizing. We have 2-3 more years of significant declines minimum. Heck, even with all the government money being poured into the housing market foreclosures continue to climb and prices continue to decline. Sales volume even continues to fall in SF, and it takes years after sales volume stabilizes that prices finally stop falling. And unemployment continues to rise. We’re still in the first quarter of this match. Much more action to come.
Very easy to explain this data: “The trend is your friend…”
Very easy to explain this data: “The trend is your friend…”
Yes, but the mix influences the pix.
Expect to see the median start to rise now that subprime foreclosures are starting to taper off and D7 has started giving in to the inevitable. D7 prices have basically fallen by 20% in a very recent amount of time, making D7 competitive again with other areas of the city, and that will cause the median to rise and the other areas to fall further to compete. Then D7 will fall again, etc.
^ anon- you are misguided
1- as I have said many times here before the low end in real SF (excluding D10 and soma) is down around 10%. Look at condos in the $500-800k range. No way 30%.
2- you prognosis of more decreases in the next few years is strictly opinion.
@EBGuy,
Yes, I hope that more software jobs go overseas, as that will improve the SF economy.
The only thing better than having software jobs exist here in the Bay Area is for us to send those jobs to India, make our companies way more profitable, and thus incentivize people to start new/innovative software companies.
I hope that Facebook gets huge, and begins to send its PHP coding to India. Then it can save enough money to weather this storm, end up stronger, and hire thousands of marketers, sales people, customer service agents, etc…
The Bay Area doesn’t need to cling to its jobs. It needs to cling to its companies and its role as the world’s HQ for innovation.
Innovation is defensible, even if a few programming jobs aren’t.
anon (with one “n”) wrote:
> 45yo hipster, you are smoking something
> really strong! No way has the “lower end”
> fallen by only 10%. More like 20-30% to
> date. 40% in lesser neighborhoods.
I have to agree with this (even the best property in Hunters Point and the Ingleside are down over 20% from peak)…
> And no way is anything stabilizing. We have 2-3
> more years of significant declines minimum.
This sounds about right…
Then the 45yo hipster wrote:
> 2- you prognosis of more decreases in the
> next few years is strictly opinion.
It is opinion, but it is based on the fact that almost everyone (for example after the Golden West sale I read that ~85% of their “pick your payment” borrowers were picking the minimum payment with negative am.) When the “great” loans out there in past years poor people were able to “buy” homes for not much more than renting (thanks to neg. am.) and when these loans recast almost all are going back to the banks…
If you listen to the bears on SS, you would still renting at 65, you would have all your savings in cash, and you would be complaining about everything everyday.
Can that seasonality link be updated?
The comparison of 09 with prior years stops at February, it doesn’t tell us anything about whether the rise in sales this month is typical seasonality or something else.
as for mix, Dataquick says it best..
” the region’s median sale price, can be misleading. In many cases it overstates the extent to which the typical home has lost value. Home price depreciation isn’t the only culprit driving down the median sale price, which is the basis for the typical monthly mortgage payment calculation. Another major factor tugging down the median price, hence the typical payment, is the unusually low level of high-end home sales, which are now under-represented in the Bay Area statistics”
This is most likely true in SF than anywhere else, due to the range of price points available.
The quote this site mentioned from the report was
“lower concentration of discounted foreclosure resales in the statistics is one reason the median sale price has recently begun to more or less flatten, or at least erode more slowly, in many markets.”
which I don’t think is true at all, as far as SF itself goes?.
So mix is significantly dragging down the median now, whereas a year ago it was supporting it. The result is that the YOY decline is no where near the 16% the numbers show.
[Editor’s Note: The March chart: No Rebound For You! (In Fact A Below Average Seasonality Bump).]
To 45 Y.O.’s point, I tried to find one very representative apple, and this isn’t a perfect one, but it was as close to an apple as I could find.
I looked in the Western Addition, not too close to any projects (Baker between Post and Sutter is a disaster, so I eliminated that area), and found 2001 McAllister. Originally built in 2003, purchased for 729K in Feb 2007, it looks to be modestly upgraded (probably new countertops and new appliances, and maybe a new kitchen floor): $25K. They listed it for 794 about 18 months later. They just wanted their money out.
Price was dropped to 648K (about $150K!) and then to 599 in January. It looks like it sat for awhile at that price and then got an accepted offer (it’s contingent), probably for something a bit under: I’m guessing probably not more than 595K given the amount of time.
So from a cost of 729K, plus $25K in upgrades, we have a sell for 595, a loss of 159 or 21%. The price when it was new in 2003: 599! So it’s under its new price and under 2003!
Now it isn’t perfect because the listing says pending litigation at the HOA, so it depends on what the pending litigation is about. But if the pending litigation is for something minor, or the developer is likely to pay, then that’s a pretty good apple in a very solid nabe, and well within the 500-800K range. And it’s only one listing, but it isn’t down no 10%! And remember, that doesn’t include realtor fees, transfer taxes, etc.
http://www.redfin.com/CA/San-Francisco/2001-McAllister-St-94118/unit-112/home/12399497
BTW, interest on 5% mortgage at 595K is about $2500, at 30% tax bracket is about $1750, now add $500 for HOA and $600 for property taxes ($400 after tax deductions). So cost of living here is maybe $2800 with insurance. That’s really not too far from the rental price: they could probably get $2200 for it as a rental. So there is a 25% premium on rent to own for that place. When the price drops to about $415K, you’ll have parity, assuming rents don’t continue to fall in a recession.
“If you listen to the bears on SS, you would still renting at 65, you would have all your savings in cash, and you would be complaining about everything everyday”
What’s wrong with renting at 65? And what savings? Your “savings” is now worth 30% less. (Actually, more like 100% less). Cash would’ve been better. As for complaints, my only complaints these days are to the LL about incompetent PHWS or when a neighbor misbehaves.
Check back with me in a couple of decades and I’ll let you know how it feels at 65. Meanwhile, this is how it feels like to be an owner at 50:
http://www.nytimes.com/2009/05/17/magazine/17foreclosure-t.html
Thanks!
will it be extended to show April also?
“an owner at 50”
Apparently, the new york times guy’s wife was a serial bankruptcy abuser (not mentioned anywhere in the poor fellow’s story), and one of the bankruptcies occurred while they were married (also not mentioned) 🙂
http://meganmcardle.theatlantic.com/archives/2009/05/the_road_to_bankruptcy.php
Wheeeeee!
EBGuy…
There is a limit to what gets outsourced. The Bay Area software/hardware gurus have a job for a reason. It is all the mediocre positions that would land in cheaper parts of the USA that have been outsource.
The American culture dictates the success of the Valley. We are a creative, innovative bunch–and, Asia cannot duplicate that…
If you listen to the bears on SS, you would still renting at 65, you would have all your savings in cash, and you would be complaining about everything everyday
this simply isn’t true.
If you had listened to me (a current bear but not permabear), you would have left the RE market in 2007 capturing your RE gains. You would have left the Stock Market in late 2007/early 2008, capturing your stock gains
you would have put a lot of your cash into Treasuries… so you’d be getting an assured 5% return, RISK FREE right now.
If you really listened, you would have shorted the equities market and made tons of money. Or made a killing going long all commodities during the big commodity melt up.
In short, you would be significantly further along in your financial health than had you jumped into RE… or even if you had held your paper loss.
that said: I own RE. I’m even putting a lot of money into my home. All of which is CONSUMPTION and I may or may not ever get a dime back of any of these renovations. but I understood that when I decided to renovate, and accepted that RE is a losing proposition for now.
an interesting related article./.
http://www.newgeography.com/content/00810-housing-downturn-update-we-may-have-reached-bottom-but-not-everywhere
I think that article is a POS. Where they say San Francisco, read ‘San Francisco MSA’
It suggests that the San Francisco MSA is only now beginning to fall.
But it’s been falling for..how long?
And in fact, has risen this month for the first time for a long time according to the metric they use! (median price).
that was an interesting article, however, I knew there would be problems early on because the wife did not feel she needed to work or worry, and her spending habits were out-of-control. This is not really a real-estate problem. They could have made it work if they would have acknowledged that they needed to sacrifice in the first place. I hope in the last 8 months of not making payments they’ve been able to pay down their overall debt, but I cynically doubt it.
When I bought my first house in SF, I could not even afford to buy a hamburger at Mels for the first year, until my tax refund, much less daily starbucks. I know many people do not agree with me, and real-estate in SF should not be a sacrifice, but to someone who has had to work for every single penny I’ve ever had since I was 15, that’s what it has taken, fair or not.
Let’s face it, with interest rates the way they are and federal gaurantees for everything, prices have bottomed more or less in most markets. The high end market will have anemic sales until it drops by 10%, or until banks get super super loose with their money again.
Prices will stay flat for 5 years+ and here’s why
1) The government didn’t remove a lot of problems, they merely pushed them to a later date
2) Foreclosures are stalled for now, but when banks recover and the Fed stops spending trillions bailing people out, they will begin again and stay around for awhile, albeit at a less catastrophic rate.
3) Banks will not recover completely for awhile. many of them are using voodoo accounting to post “profits”. Credit cards, commercial properties, etc have yet to really hit them yet.
4) Lots of the questionable financing/refinancing going on will result in foreclosures down the road and sustained pain for the banks, albeit not catastrophic pain.
5) Employment will remain weaker than normal
6) With high deficits, taxes will go up and so will interest rates, keeping the economy from doing well over the midterm. High inflation will likely mean weaker dollar. Weaker dollar will mean that we can inflate our way out of our own debt, but our buying power will be crippled for imported goods.
7) I haven’t even begun to look at entitlement spending on all levels of government that looks quite insolvent. Pensions + health care for retirees, social security, medicare, etc.
So I say again, we stopped the bottom from completely falling out, but now that we have hit an artificially high bottom, we will stay here for awhile.
Do you think we can sustain 1.5 trillion deficits, 0 percent interest rates, and the fed printing a trillion dollars in funny money year after year? These things will have to ease, and when they do, it will hurt the housing market. You won’t see 30% drops, but 0-3% per year drops for the next 5 years.
If you see a house you love and can afford, buy it, if not, wait.
end of story.
The Bay Area software/hardware gurus have a job for a reason.
Like the senior engineer (house paid off and kids out of college) who recently interviewed at our company. He was making $130+k at his previous job before he was laid off. He did mention that salary should not be an impediment and that he was willing to work for substantially less pay. I would put him in the same class as “old school” landlords who have locked in their Prop 13 tax basis. They are the ones who will determine fair market value (not Mr. Overleveraged homeowner). BTW, we outsource our board layout and assembly to local firms and they have let it slip that business is slow. Needless to say, they are a lot nicer to paying customers these days. Welcome to deflation nation.
“The American culture dictates the success of the Valley. We are a creative, innovative bunch–and, Asia cannot duplicate that…”
I sure hope this attitude isn’t pervasive. We just can’t lay on our laurels and expect to always be #1 in innovation.
pumpkin patch – if you got in touch with some of the innovators of Asia I don’t think you would be so confident that Silicon Valley the market. It is naive to think that you have to be American to successfully innovate.
It is naive to think that you have to be American to successfully innovate.
A lesson GM has particulary learned.
As far as prices fallin across the board, its’ a mixed bag. I walk by 5 Saturn daily, the for sale sign has been up a little over a week and already active contingent, asking $995K. A no parking two unit building being used as a single family home on Lower Terrace at $2 million is already in contract after a month or so. I looked at it and it was strange to say the least. Yet the house on Roosevelt not far from it has been on the market forever.