San Francisco Listed Inventory: 7/13/09 (www.SocketSite.com)
Inventory of Active listed single-family homes, condos, and TICs in San Francisco declined 3.1% over the past two weeks (versus an average gain of 4.3% for the same two week period over the previous three years and a 0.3% drop in 2008) and is now running 6.7% higher on a year-over-year basis (down 4.1% for single-family homes, up 14.5% for condos/TICs) and 11.3% higher than at the same point in 2006.
The drop in inventory is being driven by both sales (down 14% YOY in June) and a seasonal withdrawing of listings, with just under 38% of active listings in San Francisco having undergone at least once price reduction (up from just over 32% at the same time last year). The percentage of active listings in San Francisco that are currently either already bank owned or seeking a short sale remains at just over 13%.
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: 6/29/09 [SocketSite]
San Francisco Listed Sales Volume In June: Down 14% YOY [SocketSite]

39 thoughts on “SocketSite’s San Francisco Listed Housing Inventory Update: 7/13/09”
  1. Its really quite interesting to see how persistent the seasonal behavior is in the real estate market.
    Having said that, no catastrophe in the making here, barely a 7% uptick in listed inventory since last year, and 7% over 2006. In fact, looking only at the four years of data shown here, 2007 is the aberration, and where we’re at now is more or less ‘normal.’

  2. Does anyone have comments on the market in Miralom Park?
    I saw something on Tulia where prices in Miraloma are down 6% from a year ago. Yet at the same time I see much bigger drops referenced in SF residential real estate.
    It seems that Miraloma is so far not really seeing a significant downturn. Maybe that will come.
    Miraloma prices were always seemingly lower than comp neigborhoods in SF. Never could figure out why. The neighborhood did not experience the same price uptick that Noe Valley or Glen Park or Portrero Hill did. In other words it was not as over-priced in recent years as most SF neighborhoods were. Maybe that will cushion Miraloma from experiencing as big a price drop as many neighborhoods will see?

  3. This is the first time I’ve seen a data point that suggests we might’ve hit bottom in SF. Granted, this is *heavily* qualified–there are still waves of mortgage resets or foreclosures that haven’t happened yet, etc., and these figures also ignore the many new units in the city, especially in SOMA. But this data point is interesting because it exhibits that psychologically, buyers and sellers are thinking we’ve hit bottom in the city proper. Something could (and likely will) change this, but as we all know confidence in the market is a big driver of where it’s going to go.
    I’m surprised that unemployment hasn’t had more of an impact on real estate in the city, also.

  4. Jason … what exactly are you seeing that make you call a bottom?
    Douglas … not sure if you are giving a Realtor spill about Miraloma up there … one thing is for sure Miraloma is no Noe Valley!

  5. “Miraloma prices were always seemingly lower than comp neigborhoods in SF. Never could figure out why.”
    Uhh … because Miraloma simulates arctic conditions???

  6. Clearly the pressure is on condos & TICs.
    SFHs remain very resilient – inventory down slightly, and sales down very slightly.
    Not where I expected things to be back in Jan or Feb – when inventory was 25%+ up – doubt many then would have predicted the change in the graph since.

  7. myself, and others have said it before, I wouldn’t get to excited about this summer being the bottom, there is still a rather large number of mortgage recast/resets coming in 2010 and 2011. There is going to be market pressure from foreclosures for a long time. Also, if unemployment doesn’t start to pull pack in 2010 that will continue to add pressure to prices which, at the very least, is going to keep price at ‘the bottom’ for awhile but more likely continue to drive them down.

  8. Douglas,
    As a relatively recent buyer, I’ve been watching 4H pretty closely for the the last 18 months or so and anecdotally speaking, Miraloma Park prices don’t seem to have dropped as much as they could have yet, although you’re seeing fewer people pay above listing and fewer nulti-bid situations like last summer.
    Maybe it’s because you have a fair amount of under 800k properties in the neighborhood which aren’t being hit as badly as neighborhoods dependent on the 1.2 million and higher crowd.
    I’ve noticed, however, that you get a lot of listings that are (seemingly) overpriced from the get go, regardless of the state of the economy (ie – 135 Marietta and 232 Fowler). If the sellers are willing to move, then things work out. If not, then they sit.
    As to why it’s never been as popular as Noe Valley? My guess is the fog (which really isn’t so bad, actually) combined with relative isolation – your nearest non-bus public transit options (Forest Hill Muni or Glen Park BART) are likely a 20-25 minute walk away and the fact that the dining/entertainment options are pretty much limited to West Portal or wherever else you can get to from the aforementioned transit options. That and it just doesn’t have the name appeal that other neighborhoods do.
    It is still appealing for people who want to own an SFR in a quiet, friendly neighborhood with good views. Kind of like the benefits of living in a subrurb with immediate proximity to everything that attracts people to living in SF in the first place.

  9. Locally unemployment isn’t that bad. It’s still well under 10% (8.9% from SF Office of Econ. Development) and has likely stabilized for the time being. That and an uptick in temporary employment (up 2%+ in April alone) seems to reinforce this. And anecdotally? Only 1 of my many friends has lost her job, and strangely enough that was working for a nonprofit, the RedCross, not any of my banker friends (Wells, BofA, and another that escapes me).

  10. 4H Clubber,
    Did you notice that they raised the asking price on 68 Agua Way from 799k to 850k? I think they set an offer date when it was listed at 799. I wonder if they didn’t get a high enough offer and decided to raise the asking price. Funny how that strategy can backfire.

  11. @il_guru, I should clarify my above (somewhat rambling) comment by saying that I don’t truly believe we’ve hit a bottom so much as a shelf. The fact that inventories are only barely up YOY and that everything seems to be stabilizing, combined with lots of other random news about units selling at Millennium or whatever. I’m saying that psychologically I think buyers, sellers, realtors, etc., are *collectively* sensing a bottom, and psychologically that’s powerful. I think they’re wrong, but it may stabilize the market in SF proper for a few months.

  12. @Jason … thanks! … this is a tough market to read. I am a bear and I have been expecting more dramatic price corrections for years, but no matter how you spin the data attractive property are still moving. I am expecting a prolonged sluggish market at this point but not a dramatic crash in SF. We’ll see …

  13. 94114,
    Don’t know the situation there, but I think I remember seeing an offer date on the MLS listing for that place, which would certainly suggest your theory may be on the mark.
    There were more than a few of those last summer, with different results.

  14. to my point that mortgage resets/recast will continue to be a problem for a looooong time …
    http://www.calculatedriskblog.com/2009/07/report-option-arms-performing-worse.html
    to the bears, and anyone else, who thinks might be ‘the bottom’, here is what Shiller had to say today …
    http://finance.yahoo.com/tech-ticker/article/278952/%E2%80%9CAnother-Bubble%E2%80%9D-In-Housing-It-Could-Happen-Says-Yale%E2%80%99s-Robert-Shiller
    The slowing rate of decline in home prices is likely to continue but the housing market is “still in an abysmal situation,” says Robert Shiller, a professor of economics at Yale. … [Shiller] says the housing market could “languish for many years,” due to the “huge inventory” of unsold holds, “shadow inventory” of homes kept off the market by banks and other potential sellers, and “a lot of financial problems.”
    [Shiller] believes “there could be another bubble” in housing, once the excess inventory is worked off. “This is not my more probable scenario [but] people have gotten very speculative in their attitudes toward housing,” he says.
    “My more probable scenario is languishing of the housing market for years.”

  15. I am a bear and I have been expecting more dramatic price corrections for years, but no matter how you spin the data attractive property are still moving.
    that will always be the case. Attractive properties are still moving in almost all markets, even places like San Diego which got smacked hard, and about 1-2 years prior to SF’s downturn started.
    Sales volume will likely never hit zero. sales prices will likely get hit, but attractively priced properties in good condition in great locations will always sell better than the others.
    it’s the (warranted) reason for the saying “location location location”.

  16. there are still a lot of delusional sellers, which i confirmed when i dropped by a couple of condo open houses in soma (mid-market) yesterday; they bought in ’07 and ’08 and were asking their purchase price plus another few percent. i had to restrain myself from outright saying their price was un-realistic.

  17. i had to restrain myself from outright saying their price was un-realistic.

    Why? Why not tell them they are unrealistic. I guess there is always the chance that someone is going to come out of somewhere and give them their wishing price but how likely is that?
    Having home sitting on the market with unrealistic prices isn’t doing anyone any good.

  18. “Why? Why not tell them they are unrealistic. I guess there is always the chance that someone is going to come out of somewhere and give them their wishing price but how likely is that?
    Having home sitting on the market with unrealistic prices isn’t doing anyone any good.”

    Shouldn’t that have been their broker’s job in the first place?

  19. there are still a lot of delusional sellers
    Yeah, there is some hilarity going on at 200 Townsend with people asking 2007 prices. I’m assuming they are trying to sell for what they owe. Otherwise, the prices make no sense.
    I guess they’ll be having open houses every Sunday since 1 or 2 are realtor owned.

  20. Shouldn’t that have been their broker’s job in the first place?
    This ignorant comment shows up on here way too much.

  21. i’ve found the agents don’t like to discuss prices candidly when you say that you think the price is too high. they’ll come up with some reason to say why the price is justified. but say that you love the property and how you think the price is very reasonable, and they will have plenty to add to the conversation. it might be poor etiquette to burst their bubble whey they spend so much time talking up the property. next time i’ll ask them to read socketsite.

  22. So, anonn – pray tell, what’s “ignorant” about it?
    Are you saying it isn’t the broker’s JOB to help the seller price his property by gathering comps?
    The broker’s just fine with a property that sits and languishes with no offers b/c it’s mispriced? That doesn’t reflect poorly on the seller’s broker?
    Please enlighten me, since I’m so “ignorant”.

  23. For the blog record, foreclosure inventory (NODs, NOTS, and bank owned) stands at 1385. This is up 6.7% from 1297 on June 15.

  24. Your base assumption is invalid. The broker wants to sell the property, not to attempt to sell it for an unattainable price. When such a scenario is seen, the assumption logically is that it is the sellers who are driving the pricing. Think about it.

  25. But presumably there must be less and less of these so called delusional sellers?
    Less SFHs on the market than a year ago, and the total inventory has fallen since March, when it usually rises significantly.

  26. “Please enlighten me, since I’m so ‘ignorant’.”
    two possibilities other than that put forth by fluj:
    (1) the realtor has about as much clue as the seller; or
    (2) realtor blows a little smoke to get the listing, knowing the custie will bend on price after a few weeks of no offers.
    It’s a jungle out there.

  27. …so the broker didn’t do their job if the seller set an unrealistic price – isn’t that what you’re saying? Which was exactly my point in the first place.
    No one “wins”, b/c the property sits, and the seller and broker don’t achieve a sale. The broker should have given the seller enough comps and guidance to keep that from happening.

  28. These numbers are not quite apples to apples from year to year because the editor excludes units under contract from the count. The average time under contract has risen considerably, from 29 days in June 2007 to 41 days in June 2008 to 52 days in June 2009. The number under contract each of those months is pretty close to the same (about 440 each year). But the lengthening escrow period makes the SS inventory numbers look lower than they would be if that number had not become so stretched. The 2009 number is still higher than 2008 or 2007, but the difference would be even greater absent this phenomenon, a sign of market weakness, by the way. Also, many more properties are falling out of contract than in previous years, as indicated by the falling YOY closings, further distorting YOY comparisons.

  29. “so the broker didn’t do their job if the seller set an unrealistic price – isn’t that what you’re saying? Which was exactly my point in the first place. ”
    OK bud. Go on believing that tired Socketsitism without knowing what really happened. I told you what the typical scenario actually is. Believe what you will.

  30. anonn:
    How is what I’m saying different from what you meant?
    What’s the broker’s role in setting price? Why would the broker take a listing where the seller has a totally inflated asking price – unless the
    broker believes that the seller will capitulate and get reasonable eventually, once the market “educates” them, so there’s ultimately a sale (which could have been short-circuited with proper pricing in the first place)?
    anon:
    your two examples:
    (1) the realtor has about as much clue as the seller; or
    (2) realtor blows a little smoke to get the listing, knowing the custie will bend on price after a few weeks of no offers.
    are 2 more ways of saying the broker added zero value to the transaction – i.e., didn’t do their job.

  31. You are saying that the realtor drove the pricing, or failed to show the seller proper comps. I am saying fat chance. No realtor chooses to waste his or her time.
    You are also seemingly not experienced in these matters. Sorry to break it to you, but some people are rather difficult to reason with in life.
    “The job” that you describe is to get the sellers to lower their price. In as much as that hasn’t happened yet, I guess you’re right. The realtor isn’t doing his/her job. But do you honestly think such a conversation has not occured?

  32. No realtor chooses to waste his or her time.
    But this just goes back to the original point: either the realtor is (i) clueless or (ii) he is blowing smoke up his client’s butt to get the listing in the hope of getting the client to cut the price once the exclusive 6 month listing agreement is signed. The only other logical possibility I guess is (iii) the realtor thinks he can nab a sucker who will overpay more than the realtor’s fair estimate of “market”.
    I suspect it’s mostly the second option – get the listing, talk down the client later. There is limited downside for the realtor (a little expense, sitting at open houses a bit – which can be used to gauge market and try to make contacts with potential buyers/sellers, perhaps some bad feelings that can always be panned off as “the market”, etc.). Thus, the cost of the option to nab a sucker with an overpriced listing is reduced. You never know til you try….
    BTW, Legacy Dude posted a link to a story about Nantucket property today that made this point about retaining listings explicitly:
    “[Why do sellers price unrealistically high?] Because sellers are still engaged in a mass-hallucination, helped along by encouraging noises from desperate real-estate agents who will say and believe anything to retain clients until the market finally recovers.”
    http://finance.yahoo.com/tech-ticker/article/279536/Nantucket-Report-Wealthy-Homeowners-%22Primed%22-to-Suffer-Major-Pain?

  33. I am not having this conversation with you. Not again. You can watch how I converse with the other fella if you like, but you and I have been down this road several times and it’s boring by now.

  34. These numbers are interesting. First comments on the market, my Realtor, Jed Lane sends me numbers from the MLS. From my review, knowing what’s in contract each month and the absorbtion rate of condos and homes is very important information. Especailly for any buyer or seller that is active in the local market. Case-Schiller’s numbers don’t mean squat to me buying or selling in San Francisco because they don’t track condos at all and SF’s market isn’t Alemeda or Contra Costa.
    Since March of this year sales numbers and median price have risen in SF. The number of open escrows has doubled from March to June and in the same period the absorbtion rate has gone from 15 months for condos to 6 months. Single family went from 7 months to 3 months. They say that 4 or 5 months is a balanced market.
    The biggest problem the overall market is having is access to jumbo loans (over $729,500). Lenders are looking for reasons to not lend, especailly if they can’t resell to Fannie and Freddie. This is contributing to the low median price because the 1.2m and up range aren’t selling unless the buyer has equity or an inheritance.
    Miraloma Park is where Jed lives and although I didn’t buy there I’ve become pretty familiar with it. The difference between it and Noe is the era of housing and Miraloma is a bit more suburban. You can’t walk to 24th street and your shopping choices are the Tower Market area or West Portal. 24th St. and the Mission, especially 18th St. is jumping right now with resturants, shops, eclectic cool scene. That isn’t Miraloma Park.
    By the way the median price in the City is only a few thousand dollars off the 2007 median price. That’s condo and houses combined for the month of June.

  35. In the trade obvious overpricing is also known as – Seller Assisted Pricing. (SAP)
    Why all the focus list price? Buyers should only offer a purchase price that reflects the value of property’s worth to the specific individual buyer.

  36. wow, it is evident that some people have never listed or bought a home. Nobody with half a brain enters into a six month agreement with an agent only to be held hostage until they sucumb to the TRUE price. It’s from faulty notions like these that faulty arguments are made and expanded beyond reasonableness and into the realm of RAGE, ENVY and INSANITY!!!
    It’s just capitalism not ghost stories.

  37. 4H and 94114: I had a friend who put in an $806k offer on 68 Agua. She said there were five bids and hers was right in the middle, but that the seller rejected all bids saying they wouldn’t sell for anything less than $850k, in spite of listing at $799k. A huge waste of everyone’s time.

  38. 68 Agua ended up selling for $832,000. Wonder how that compared to the highest bid in the original 5-bid mix that Lurker describes above.

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