Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 2.5% over the past two weeks (versus an average gain of 4.7% for the same two week period over the previous three years) and is now running 12.1% higher on a year-over-year basis (down 2.9% for single-family homes and up 22.9% for condos/TICs) and 45.5% higher than at the same point in 2006.
The typical spring-time bounce in sales activity known as basic seasonality, but which some seemed to have confused with a market rebound, appears to be moderating. And on a year-over-year basis sales activity in San Francisco remains down.
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: 4/27/09 [SocketSite]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]
How do these numbers compare to last year if, in both cases, you take out new, never before sold condos, so that one is just looking at individual sellers?
[Editor’s Note: Other than a few teaser listings, the vast majority of “new” condos are never listed and don’t show up in these counts (either this year or before).]
The typical spring-time bounce in sales activity known as basic seasonality, but which some seemed to have confused with a market rebound, appears to be moderating
Does it? And you are basing this statement off what? Because April saw more properties get into contract than March, surely.
[Editor’s Note: It does if you’re looking at April to May (the month we’re now in). And we’re basing it off of our model which not only looks at sales activity in the absolute, but also relative to past years and months.]
It’s still a few months too early to predict a trend, IMO. If sales in the sub $1 mil catagory continue to do well, and inventory does not shoot up (as some bears famously predicted), then prices may start stabilizing short term in the sub $1 mil range…barring a double dip recession or interest rates shooting up.
Currently on MLS there are:
1240; Condos/TICs for sale, and
699; single family houses.
So this is mostly a condo chart.
[Editor’s Note: Currenlty 36% single-family listings versus a three year average of 42%.]
That makes sense from what I’m seeing – not much inventory in SFH but lots in condos. In fact, I’d expect the condo number to be even higher, given all high rises coming on line.
Well, “Condos are a leading indicator TM.”
If you look at SFRs in neighborhoods 1,5,6,7, and 8 (a k a Socketsite wish territory) there are 231 homes on the market. I doubt anyone — even on what this Socketsite has become, an uberbearish website — would describe that as anything other than paltry.
Add area 2, the Sunset. It goes up to 319.. Add 9, eastern central neighborhoods. It goes up to 360. Add 4, nicer south western neighborhoods, and it goes up to 440. Add 3 and 10, and there number goes up by another 156.
Meanwhile, there are 377 houses, city wide, in contract or pending right now versus 596 on the market. (I show 596, not 699 Sparky.) Three seventy-seven in contract versus 596 active?
Despite the best efforts of this website, the truth of the matter is that the inventory versus demand ratio at this moment in time is not particularly large. And that is the buzz in the real estate community at the moment.
Higher inventory (from last year) + lower sales volume = more price declines ahead.
No need to overthink this, folks, or to try to torture the data to figure out which districts/segments are more or less pressured. For the econ eggheads out there, demand over time for housing in an integrated economic region is going to display positive cross elasticity across the segments, and the entire pricing structure is being hit in SF and its surrounding areas.
You heard it here (but not first, lol): more price declines ahead.
Regarding the question of whether the increased activity we have been seeing is a Rebound or Seasonality depends on your definition of Rebound.
I argue that we could not have the current Seasonal trends we are seeing if we were not Rebounding. Seasonality is a by-product of a normal market!!!
Median prices up, number of sales up, months supply of inventory down, improved lending conditions, leveling off/slight uptick of Consumer Confidence.
Socketsite will be the last to call the bottom, and it is slighly behind us right now.
Higher inventory (from last year) + lower sales volume = more price declines ahead.
No need to overthink this, folks, or to try to torture the data to figure out which districts/segments are more or less pressured. For the econ eggheads out there, demand over time for housing in an integrated economic region is going to display positive cross elasticity across the segments, and the entire pricing structure is being hit in SF and its surrounding areas.
You heard it here (but not first, lol): more price declines ahead.
Really? The numbers are 377 SFRs in contract versus 596 active, and this is your reduction?
Tortuous, indeed. As in someone undergoing torture would go along with that synopsis.
^ barring a prounonced double dip recession or a spike (not gradual) inflation, prices will not decline in the sub $1 mil in prime SF. Heck, I’m willing to put a burrito wager on it. I’ll even make it a super Lmrim 😉
In fact, I’d expect the condo number to be even higher, given all high rises coming on line.
Which high rises are coming on line? The infinity and millenium are all online already. Other than the tower on Hawthorne and Howard, I don’t see any other highrises coming on line for a long, long time.
Looks like anonn is right that the action in SFRs right now is in D3 and D10. Looks (per CleanOffer — don’t have access to the full MLS) like D1,2,5,6,7,8 have 460 listings and 145 of them in contract — about 31%. D3,10 have 331 listings and 178 in contract — about 54%. This is not surprising. Homes in the less expensive areas can be bought with cheap FHA and GSE loans.
And there is no significant condo/SFR split. While some buyers are undoubtedly looking only at one or the other, they are all a single market in the sense that prices in one discipline the other. And for the same market definition reasons — as LMRiM notes — SF is part of the larger geographic market. Prices continue to decline marketwide. And with no FHA/GSE support at higher price levels, I suspect that is where the decline is steepest, but I’ve not seen any specific data on price tiers other than CS, which does not break it out finely enough.
btw, D4,9 combined have 183 listed with 62 in contract (again per CleanOffer) — 34%. ABout the same as the other Ds outside of 3 and 10.
“And there is no significant condo/SFR split.”
I don’t think that is true at all. While perhaps people who look at condos would also consider a house, there are lots of people who want a house and not a condo. Not to mention that condo includes TIC. Condo tend to not have 3+ beds. People with kids look for that. Dogs, people with them want houses and not condos. Fixer market, victorian lovers, allergies, privacy, the list of market separtation goes on and on.
This is not surprising. Homes in the less expensive areas can be bought with cheap FHA and GSE loans.
it’s surprising to me. I was assured that the majority of offers in the SF market are all cash offers, and that the rich SFers don’t need loans like the rest of the country does. You know: trust fund babies and rich foreigners and all. [end sarcasm]
as to the numbers: I’d say that both bears and bulls could claim “victory”. the bears are right that inventory has increased significantly over prior years (inventory is still up 45% compared to the bubble years). the bulls can claim that it’s not as bad as it could have been (inventory has stabilized, which was of course predictable given seasonality…) but at least the SF market did not depart from seasonality, and that lends credibility to the bull case.
in the end, it’s still going according to typical RE downturn fundamentals, that is to say slowly. these things take a long long time. we should have a “winner” in the bull/bear argument within 3 years IMO.
And there is no significant condo/SFR split. While some buyers are undoubtedly looking only at one or the other, they are all a single market in the sense that prices in one discipline the other
The numbers contradict what you say. There are 166 condos active in 9F,9H and 9J alone. They make up a disproportionate amount of the city’s condo market. This fact does not speak to the general. Rather, it is specific with regard to product, market, and location. “And there is no significant condo/SFR split … Prices in one discipline the other” — this sort of stuff is merely your brand of overtalk, and nothing more.
D’s 1,2,4,5,6,7,8,9 have 440 SFRs on the market, and 202 are in contract. Unlike the condo market, this fact does not indicate imbalance.
good numbers trip. leave it to a realtor to make a big deal about how city wide inventory is irrelevant and then use city wide contracts to try and impress.
sounds like the real activity is outside the real sf…
good numbers trip. leave it to a realtor to make a big deal about how city wide inventory is irrelevant and then use city wide contracts to try and impress.
sounds like the real activity is outside the real sf…
And leave it to people such as yourself to pay attention to the likes of Trip in the face of factual information.
Sparky-b, you are absolutely right. Note that I said that “some buyers are undoubtedly looking only at one or the other.” But that does not mean there is no price discipline between condos and SFRs.
Take an obvious, extreme hypothetical — a nice 2BR condo is available for $400,000. A nice 2BR SFR is nearby for $1.2 million. The condo is going to generate a heck of a lot more buyer interest than the house, and many (if not all) of those in the market “only” for an SFR are going to consider the condo instead. The SFR is unlikely to sell without lowering its price. [Same concept applies to a home in SF vs. a home in the East Bay]
While one buyer or another may be dead-set on an SFR, that won’t change the market-wide impact of lower condo prices. I’m sure there are some gasoline buyers who only buy Chevron because they like “techron” and they would pay $1 more a gallon for it. That doesn’t mean Chevron could charge $1 more a gallon than its competitors. While homes are not completely fungible, they are to some extent and the same principle applies.
“And leave it to people such as yourself to pay attention to the likes of Trip in the face of factual information.”
What a joke, anonn! You put out this misleading, half-truth, and you knew it was a half-truth because you have full MLS access. Trip put out some complete numbers that flesh out your misleading point. And he even agreed that your broader point was valid, which was a pretty generous statement given your critical omissions. I think its pretty obvious who is providing facts and who is providing realtor spin.
Trip, is it fair to ask if you would share with the message board the knowledge base from which you come up with these summations and analogies?
I’m on here posting facts today. Yet I’m getting derided as “a realtor.” Meahwhile, you’re just saying stuff, intimating you understand the current buyers in the SF r.e. market, comparing the housing market ot gasoline, etc.
Where do you get off saying what you say? Seriously?
But, hypothetically, say that “condo” is a TIC, and you can’t get fractional lending and the other owner works for GM, and the HOA’s at $2000K a month.
…and he smokes and has the lower unit, and you have a puppy.
What a joke, anonn! You put out this misleading, half-truth, and you knew it was a half-truth because you have full MLS access. Trip put out some complete numbers that flesh out your misleading point. And he even agreed that your broader point was valid, which was a pretty generous statement given your critical omissions. I think its pretty obvious who is providing facts and who is providing realtor spin.
What half truth would that be? I went on to flesh out what I was saying at 10:17. Give it a rest man. I’m not in the habit of writing a book in every post.
Joe, you only bash me. You never have a single point other than that. Trip is on here saying there is no disconnect between the condo market in SF, and SFRs in SF. OK. Believe him. I care not. There was no overbuilding. The minute parts of section 9 accounting for 14% of the total condo inventory is precisely nothing. It’s all good.
Anonn, happy to do so. About 60% of what I do is antitrust work. Much of that involves defining the relevant market in which the behavior of market participants and consumers are to be judged. I have spent years studying, litigating, and working with experts on the concept of a relevant market. Market definition issues can be difficult concepts and are often counter-intuitive (although this board has some awfully intelligent readers so they are probably not difficult to most here). And I’m just trying to explain them the best I can. I’m not comparing the housing market to gasoline but was simply illustrating a point by example. Substitutability and price discipline are important concepts and they do apply in the real estate market as in just about every other market.
In Contract? WTF!?!?!
That is an irrelevant number, my friends. As someone very intelligently pointed out previously, the number of pendings are WAY up because A) financings take longer and B) you can now get an inspection contingency, unlike in years past. That means actual sales are taking longer, and so the source of pendings has gone up from about 2 weeks worth of sales to many months.
This is just par for the course from the real estate industry. If the numbers are bad, shift to a different number.
The ONLY ratio that matters is the amount of inventory divided by the amount of SALES, not pendings.
Using pendings would be like a retailer whose exits are under construction, leaving only one exit left, causing huge backups to leave the parking lot, saying “Sure sales are down but my parking lot is fuller than its been since before the construction!”
Pendings are irrelevant! The only thing that matters is inventory to SALES.
Sparky-b, the price of that condo/TIC you describe will not exhibit much price discipline on an SFR that lacks those problem aspects. But one could come up with a hypothetical SFR of horrors as well. The typical decent condo and typical decent SFR are in the same relevant market as prices in one will disciple the other.
I was just riffing on your hypothetical where they are at $400K and $1.2M (i.e. not in the “same relevant market”).
Oh, and just in case the irony of the likes of Joe and Trip now seizing upon the spate of activity — that I’ve been talking about effecting median for over a year now — in the lower priced areas 3 and 10, after months (years?) of tossing about “Real SF” in derision is lost on anyone, I’m pointing it out right now.
But back to my “spin” of “half truths.”
Areas 3-G,H,J (and yes, I put a fine point on 3 because, for example, Merced Manor and Ingleside are polar opposites) and 10: 161 SFRs in contract, and 149 are listed. This would seem to indicate significant demand.
Areas 1,2,3A-G,4,5,6,7,8,9: 224 in contract, 453 active. This would indicate more supply, but a not insignificant demand.
Now, what did I spin there? Because I feel like I’m just talking, and sharing information, in a collaborative effort to try to best understand this market. If my “spin” offends you here, let me know why, Joe, and I’ll try to correct it.
anonn: didn’t you read trips post above? “per CleanOffer”.
you are both posting facts. the difference is trip isn’t omitting material ones like districts 3 and 10 are driving demand. i thought fluj said 3 and 10 weren’t even part of the real san francisco?
actually, I also think that we must caution the use of pendings in our data sets, since the number of pending sales is hugely affected by time duration between offer and close.
if the duration of the time between offer and close increases, then you will have more pendings without more sales. if on the other hand the duration between offer and close has not changed, then the pendings do mean something.
very distorted example: if all units closed the day after the offer was placed, there would be few pendings. If they all closed 6 months after the offer, then you’d have a lot.
I have no idea what has happened to durations between offer and close. anonn? FSBO? others?
we’ll be able to settle this part of the argument by October. by that time September’s numbers will have come in, and we can see how many sales there were over summer, and what the inventory looked like.
Then we can just ignore all the data over winter (as I always do). then we’ll see what happens again next year after the Super bowl.
LOL! The Fed has thrown trillions down the drain to support RE, you can borrow/refi now for what, 5% or less and this is all this market can do? Wow, what a “bounce”…
If this is THE bounce so many waited for, then I’d be worried for the rest of the year.
Tipster,
Properties in contract are relevant because they are no longer for sale. The chart that anchors this thread is showing active inventory.
Is it truly difficult to understand why properties in contract would be relevant to this thread?
Wow. You want to talk about spin. You are without peer.
anonn, on your 11:12 post, good info and agree no spin. Notably, you only included this all after you were busted for the spin and omissions in your earlier posts.
So it looks like we’re all now in agreement that the action is in the lower-priced areas. See Fronzi’s point . . .
i thought fluj said 3 and 10 weren’t even part of the real san francisco?
I did not omit 3 and 10. Read all my posts, please. I even went as far as to put a fine point on 3.
But the irony of those who denied the spate of activity in parts of 3 and 10, and its effect on median, now trying to embrace 3 and 10, is not lost on me.
So it looks like we’re all now in agreement that the action is in the lower-priced areas.
If you want to call 224 SFRs in contract and 453 for sale in the higher priced areas nothing, then sure. But I think it’s something. And I don’t think that something is capitulation.
“Properties in contract are relevant because they are no longer for sale”
Then there are tens of thousands of properties also not for sale because they were never listed. How is that relevant?
The only thing that matters is the available inventory divided by the number of SALES in the last thirty days. I’m sure that number is a disaster because you’ve been avoiding it.
Pendings? Irrelevant.
@ people buying in D3 & D10 – if the property you like is within the FHA limits, please put down the absolute minimum you need to (try to wrap closing costs into the loan, that should require only a 1-2% cash at risk position). It’s foolish to risk your own dollars in a rigged market – don’t be a sucker.
@ people who are offended by that – write your legislator, don’t flame me. This is the system, change it or get out of the way of good, sound advice.
@ Trip (post of May 11, 2009 10:55 AM) – Just as I suspected. You’ve got nothing. Zero credentials. Next thing you’ll tell me is that it’s hard to be a partner at a major law 😉
I suspect that you feel like I do when posters always try to tell me that I forget about the Fed “printing money”, “inflation”, or “tax deductions”, lol.
Interesting thread, and very illuminating to listen to this debate. The harsh back and forth, in my view, highlights a really important aspect of every real estate market — the dominant market sentiment is self-fulfilling. Bulls know that if bears convince enough people, buyers and sellers alike, that they are right, they will be right. Vice versa is also true. Hence, it is not enough to simply state your case and allow the other guy to state his… it is necessary to annihilate your adversary’s credibility, so that the idea does not take root in too many minds that the market is going down, or the market is going up. Etc.
Me, I tend to believe that the rent vs. buy calculators are the best long-term predictor of what happens in any real estate market, and they do not support the case for buying a home in SF. On the other hand, I also believe that if there is such a thing as a “special” market, where buyers will stake their financial lives on owning, even if it does not make pure financial sense, it is our fair city.
Yeah well, you are entitled to your opinion Tipster. That stance completely disregards the here and now, when you reduce it in that manner. Go ahead and think that way though. Who am I to stop you? And heck, Google up a lousy economic woe story, and lay it right on us to boot my brother. Just for fun. Cool?
101 SFRs have sold in 1,2,4,5,6,7,8,9 and the better parts of 3 since 4/11/09. To be more specific, that is 101 more than zero. To my mind, it indicates that April — the source of the properties now in contract, by and large — was much better than March.
I’d like to think we are building a Coalition of the Willing (as in, I’m willing to sell my house today as it will be worth less tomorrow). Sure there may be some fair weather sellers (some who have already pulled listings), but plenty of draftees are waiting in the wings to take their places (87 by my count in the Sunset).
As a side note, we are entering the “musical chairs” season for collegiate renters (lots of inventory on Craigslist this side of the bay, but I don’t have the numbers for historical context). Will be interesting to see the “vacant seats” when the music stops. Marginal players may be facing some cold water in the face…
Bingo. I would add that the recession has considerably reduced both the number of people and the amount they will overpay for “special” markets.
As a side note, does anyone else here see the irony in a bullish realtor who has enough time to post here several times a day?
The bears and bulls are engaged in a much more lively debate now. For a while, the bears won easily. But did we ever reach capitulation?
Prices bottom at a reasonable p/e ratio. Show me any example where that’s not the case – in any industry. Look at the market decline from November, then March rally. When prices hit unreasonably low p/e (e.g., implied no net productivity improvements from the late 1960’s on…) the market began to rebound.
Would love to see any market, asset, or industry where this isn’t the case. Lovely SF real estate is the same.
[Continues to save cash while people catch falling knives]
So, we have 101 sales with about 700 listings, giving us a 7 month supply on the market. The rule of thumb is 4-6 months of inventory means stable prices, more than 6 months falling prices, less than 4 months, rising prices.
So SFRs are stable to falling (probably falling at the high end, stable at the low end). I assume the number for condos is worse and they are into the definitely falling category.
Wouldn’t the pending count be skewed upwards by the unusually high proportion of REO sales? eg. that condo on Folsom that stayed “Act Cont.” for 8 months.
So, we have 101 sales with about 700 listings, giving us a 7 month supply on the market.
HUH? Why don’t you at least think about your spin before you commence to cyclin’?
That 101 was the districts I ennumerated, only. SFRs only. The amount for sale from that group is now 453.
So stable prices then? Moving toward rising prices? By your “rule of thumb” ?
dog boy wrote…”As a side note, does anyone else here see the irony in a bullish realtor who has enough time to post here several times a day?”
That hits the nail on the head. However, I am in the camp that Fluj might be working for this site. I mean… how many people “plug in” just to hear him get his panties in a bunch every day? I know I do. Good times!
Back to real estate, I also like the rent vs buy model to figure out where we are going. Here is my personal anecdote on why I am NOT buying in SF. I have been looking to buy for 5 years. However, I just signed a lease for an amazing 1100 sq ft 2 br apartment in PRIME SF for $3k a month (2 car parking and private balcony included!!). This was a 20% discount from what the owner was asking (wishing) on Craigslist. Similar apartments in the neighborhood go for 800 per sq foot. Do the math but I think I came out ahead.
I’l see your ironing, and raise you one delicious!
Working for this site? nope. Adam only wishes.
Panties in a bunch every day? Not lately.
The whole district comparison thing is ridiculous IMO. Misha debunked it some time ago. (link via the front steps)
http://www.pegasusventures.net/wordpressblog/2009/05/02/districts-3-and-10-rip/
http://www.pegasusventures.net/wordpressblog/2009/05/05/noe-valley-goes-down/
I don’t understand why small datasets are ridiculed when they depict a climbing market, yet called crystal clear — here, “ridiculous” and capable of debunking a widely held notion — when they depict a falling market. That Noe Valley chart’s all time high of last May was a month in which five out of only a smallish dataset of 11 listings sold for over $2M. That month, 5/08 is utilized to show decline from peak. And I’m sorry, but nobody, neither bear nor bull would say that May 2008 was the peak of Noe Valley’s crest. Heck, I was on here last May fighting with dozens of people that the market hadn’t already crashed last May! One sale even was an all time high, the Castro street property that sold for 3.038M. IMO, if the chart were to be continued for the next few months, it will once again show a climb that’s likely very removed from lockstep with the Bay Area MSA. Numerous high ticket Noe sales have been occurring lately, again within a small sample size. But I think Misha wants to chart another area, so we might not get to see it.