According to DataQuick, recorded home sales volume in San Francisco fell 2.8% on a year-over-year basis last month (514 recorded sales in August ’09 versus 529 sales in August ‘08) and fell 1.2% compared to the month prior. The difference between recorded and listed sales activity continues to be driven by unlisted new construction sales (think discounts and expiring tax incentives).
San Francisco’s median sales price in August was $635,000, down 12.4% compared to August ’08 ($725,000) and down 1.2% compared to the month prior.
For the greater Bay Area, recorded sales volume in August was up 4.0% on a year-over-year basis but down 14.3% from the month prior (7,518 recorded sales in August ’09 versus 7,232 in August ’08 and 8,771 in July ’09), while the recorded median sales price fell 19.5% on a year-over-year basis, down 8.9% compared to the month prior and ending a four month string of upticks.
At the extremes, Alameda recorded a 21.0% year-over-year increase in sales volume (a gain of 267 transactions) on a 22.7% drop in median sales price while Solano recorded a 13.2% year-over-year increase in sales volume (a gain of 79 transactions) on a 25.7% 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 August home sales and median price fall [DQnews]
∙ San Francisco Recorded Sales Activity In July: Down 10.8% YOY [SocketSite]
∙ San Francisco Listed Sales Volume In August: Down 10% YOY [SocketSite]
Renter in Marin
Threatened by a jealous schmuck
Socketsite less posts
Either way, no sign the sky is falling.
Still trying to reconcile the fact that, as claimed by many..
a) Prices are down 15-20% from last year and
b) High end market is dead on its feet.
b) would mean there is a big mix factor which would pull down the median price YOY – as sales are pretty level, if there’s less from the high end, there must be a bunch more lower priced sales… but it’s only down 12%.
Of course, for example, b) may still cause a) in the future, but I can’t see that both have happened yet.
It just doesn’t add up.
Much more consistent, I’d say, is prices down 5-10% from last year, with the high end struggling (but not dead), thus having a further negative impact on median price via mix factors.
Agreed, 5-10% down in Real SF. Maybe less. Nothing to see here folks … move right along.
Hehehe!
The final score will be tallied when inventory and volume are at normal levels…
5%-10% down in the last year? Maybe. 5-10% down from peak? No way. I would say that it’s a rare property in the sweet spot of the SF market that isn’t down at least 15% from peak (i.e. not too expensive, not too crappy, SFR in district 5).
REpornaddict, a shift in the mix away from the high end certainly plays a factor, but not as significant as one would think, even with a huge decline in the number of higher end sales.
The flaw is in your premise that “if there’s less from the high end, there must be a bunch more lower priced sales.” But high end (say, $1.5M or higher) are not and have never been a significant percentage of overall sales in SF. The median sale price is now only $635,000. Per redfin.com, for example, there were 1111 house/condo/townhome sales in the last 3 months, but only 67 of those were at $1.5 million or higher — only 6.03%. I cannot easily determine what that percentage was a year ago, but assume arguendo there has been a huge decrease — cut in half (I doubt it has been that severe, but maybe someone has better numbers). That fact would not make a huge impact on the median because high-end sales are such a small percentage to begin with. The distribution curve would shift to the left, but not much (no more than noise in the distribution) and it would only affect the median by probably a couple tens of thousands of dollars.
So it is not inconsistent at all to find that the high end market is dead on its feet (i.e. a big decline in sales volume) but that the 12.4% decline in median YOY is still a pretty reasonable indicator of the overall market downturn (by the way, it is down 23% since August ’07).
As has been discussed many times, median prices certainly do not explain everything. But they are one indicator which, along with “apples,” Case-Shiller, etc. cumulatively give a picture of the market.
A 12% in one year and 23% in two years may not be “the sky is falling,” but it is an unprecedented crash in SF that has put tens of thousands of 2003-2008 buyers underwater, and there is little to no indication that the downward trend is reversing, or even easing.
The final score will be tallied when inventory and volume are at normal levels
Inventory is at a normal level, though I think? Lower than 2006 levels currently.
Agree sales have some ways to go, but certainly have been heading in the right direction.
The sky didn’t fall in Japan after the initial shock, either, it just declined slowly.
For 20 years.
Just slowly enough to boil the frogs and keep them paying.
Maybe Trip..
but it’s not like it’s only affected anything above $1.5m or higher..it would have an effect, albeit maybe a lesser one, on anything $1m above also, and possibly even lower.
Amd certainly, mix was deemed important enough here to merit a comment every month with the DQ data when it seemed to go in the other direction ie mix was claimed to be supporting the median.
It’s interesting that each month SS is ‘silent’ on mix now – but it’s obvious to me the downward effect now is far, far higher than the upward efefect ever was 18 months ago,say.
Impossible to quantity, certainly. But in my opinion HUGE when considering median prices in August 07 to those in 09.
Your point is valid, REpornaddict, and I noted that mix certainly plays a role in median results. But there is a different explanation of what may be happening with the mix that is more consistent with the other indicators (apples, etc.) of a 15-20% price decline.
Take one group of sales in 2008 and calculate the median. If the very same homes were sold and in the mix a year later but each sold for 20% less, the median would be . . . 20% lower! On the surface that lower median would appear to be caused by a shift in the mix, but it plainly would reflect a decline in the market.
Seriously, when you can’t even sell a castle near the water for a measly $3M, you know things are getting worse…
I’m particularly amused by the fact that you could cut-and-paste this entire thread from any previous month and it would be amost identical (including this comment) to the current month.
Yes, prices are going down. (Which bulls dispute)
But its very, very slow. (Which bears hate to acknowledge).
See you guys in 5 years. We’ll see where RealSF(TM) is at (and whether or not I’m living in it).
I’m with the SKY IS FALLING camp. Even DQ noted:
The 14.3 percent drop in sales between July and August was atypical, given the average change between those two months is a gain of 3.4 percent.
Interesting that median prices in Marin bucked the trend of every other Bay Area County and are uo YOY:
Aug 08 Median: $675,000
Aug 09 Median: $713,000
Change: 5.60%
I am pretty sure we are at “normal” e.g. pre-bubble, sales. What were sales like in 1999?
It looks to me like prices have been flat since the beginning of the year, so this is pretty strong indication that prices have stopped falling, Trip’s claim otherwise notwithstanding.
The economy is clearly recovering, but we are also entering the “second wave” of resets, so it will be interesting to see what happens over the next twelve months. By next summer we should have a pretty good idea.
What bears hate to acknowledge what? I’ve been predicting a correction to late 1990s prices which makes me a bear in that sense, but also predicting that much if not most of the loss will come from the later years as inflation slowly does its work. As long as appreciation stays below inflation real prices continue to fall, and that builds up year after year. This isn’t about bull or bear psychology because it is a correction that follows this dynamic just as surely as exponential price increases were the expression of the bubble. Prices come down fast at first, but then over following years the real pain starts to set in.
Why did sales suddenly fall in a month in which they usually rise?
A. The “that looks cheap compared to the last three years” crowd has finally bought and we’re running out of them?
B. More and more people are trapped in their homes, unable to come up with cash to sell?
C. The job losses are finally looking to be the result of a structural change and that is effecting sales and outlooks: with sales declines nearly always preceding major price declines?
D. The only thing that is selling now are great deals, as prices continue to fall and anything even priced like it would have sold for last month just sits?
E. The numerous and massive government attempts at keeping prices from falling quickly are having their intended effect, but that is dropping volumes?
All of the above? None of the above? I thought things would be flat until the end of the year. I still do, but that volume decline really threw me.
F. 5 Fridays as opposed to 4…
🙂
With about 3.2% of Bay area sales, Marin numbers are interesting only if you happen to live in Marin.
A continuing fall in prices on an increase in volume, in a market characterized by cheap money, direct subsidies, and a dominant lender (FHA) with underwritng standards that would make Angelo Mozillo blush = close to normal? Let me know where your weed prescription is filled. The next government program to encourage homebuyers should include a blindfold, earplugs, and a sound generator that goes lalalalalala…..
A continuing fall in prices on an increase in volume, in a market characterized by cheap money
Didn’t we just see a chart that showed SF volume is in point of fact down YoY?
and a dominant lender (FHA) with underwritng standards that would make Angelo Mozillo blush = close to normal
This is utterly false. Compared to Mozillo’s heyday underwriting standards are 1000 times more stringent. You can’t even get FHA loans if, for example, the front stairs need too much work. But you’d know that, right?
Naah. You just like to spout off. You got nothing.
Let me know where your weed prescription is filled.
Not a weed smoker myself. But you should let the board know where yours is, so that they can stay very far away. Nobody likes trippin for hour upon hour like you obviously are.
re: what Haiku said, San FronziScheme hasn’t been posting as much lately either, eh?
@anonn
Volume is down YOY (6.2%), but prices are down more significantly YOY (12.4%). Sales volume is falling anomalously and inventory is picking up while prices continue to fall. I don’t see any way to interpret those combined trends other than as a continuing decline.
OK. But the guy I responded to said volume is up and went on to say a bunch of other untrue stuff. Inventory is picking up in a seasonal pattern IMO. You may interpret these things differently. I have no objection to that. Do you object to me objecting to others posting falehoods? If so, why?
Actually, he said volume was “increasing”, which is 100% accurate.
Over what period of time? 1 day? Obviously not YOY (-2.8%)! And the moving average is still dropping…
You can’t even get FHA loans if, for example, the front stairs need too much work.
That might be a problem for a foreclosure or short sale, but I’m quite confident that every SF realtor listing a property under $1M does a quick inspection for FHA gotchas and has them fixed before the place goes up on the MLS. So it really turns into a non-issue for most SF properties for which FHA financing is a possibility.
FHA loans are available to almost anyone, but they were, of course, more expensive than the non-FHA loans that were given to anyone with a pulse, because of the mortgage insurance premium requirement. However, now, with interest rates held artificially low to compensate, and the moratorium on FHA risk-based pricing (the worst borrower pays no more than the best, so bad borrowers pay way less than they should, even with the insurance premium) that too is a non-issue.
The moratorium theoretically expires at the end of this month. If it isn’t renewed, I think you’ll see a bump from it for September. Next month, high LTV loans will pay more, as will people with lower credit scores. Interest rates, will, of course, remain artificially low. And availability will still be easy, it will just cost somewhat more, about 1% up front and as much as 0.55% per year.
On a $500K loan, that’s an extra $5K down, plus about $200 per month, which will kick in next month. Anyone waiting until next month to buy will face a somewhat reduced set of competition, so prices should take a bit of a dive, though I wouldn’t be surprised to see the moratorium renewed.
sorry for the confusion-> volume=supply as intended by anon above.
I am always amazed at the number of regular posters who still fail to understand that medians are not prices.
All the median tells you is what people are spending but it tells you nothing about what they are getting for that spending.
So if the median in 2008 was 1 Mil and that got you 1 bedroom 1 bath condo and in 2009 the median is 900k but that gets you a 2 bedroom 1.5 bath condo and a similar one bedroom from 2008 is now selling for 750k some of the posters here are claiming the market is only down by 10% and not the 25% it would be in the example I have given.
remember folks, medians are NOT prices.
Sales volume in the Bay area, which last time I checked included SF, is up 4.00% with SF volume trending toward stable.
FHA allows loans to borrowers three years out of bankruptcy with sub-median FICO scores, 5% deposits, and downpayment assistance (gifts and seller credits).
Fluj, don’t knock weed, it might help your disposition.
but I’m quite confident that every SF realtor listing a property under $1M does a quick inspection for FHA gotchas and has them fixed before the place goes up on the MLS
Are ya? Based upon what experience or even hearsay? None of you FHA commenters know zip about the actual process.
Stop it. You’re full of nothing. You don’t have share your brand of nothing on a blog. Take a deep breath. Back away from the keyboard. Therrrrrrrrrrrrre.
Actually, he said volume was “increasing”, which is 100% accurate.
It does every year at this time. So at best that was nothing.
Why does dataquick show 514 S.F. August sales on the linked report:
http://www.dqnews.com/Articles/2009/News/California/Bay-Area/RRBay090917.aspx
But only 497 SF August sales on the SF Chronicle chart???
http://www.dqnews.com/Charts/Monthly-Charts/SF-Chronicle-Charts/ZIPSFC.aspx
Yes, you have to add them up for the 2nd one…Helps to be good with excel or something…
Just a superficial comment about the light blue volume line : It looks like the “Winter chasm” that occurs at about Christmas really widened between 2008-2009. It dropped earlier and recovered later. I guess we will have to wait until April 2010 to know whether this is a one-time event or here to stay for a while.
Fluj, have you now morphed from anonn to anon? Just checking. BTW, if you had checked the latest NAR publication on FHA guidelines, you would know that the minor physical repair requirements are pretty much gone, not that they ever presented much of a problem for a savvy realtor ™ and his or her pet inspector. Even when there are serious physical conditions noted by an appraiser, see FHA 203(k) program.
Anyone curious about how the FHA really works, should spend some time on the mortgage broker outpost forum — the threads on how to qualify a borrower for a FHA loan with a 600 FICO two years out of foreclosure are quite illuminating.
August unemployment numbers are out:
http://www.edd.ca.gov/About_EDD/pdf/urate200909.pdf
SF’s August unemployment rate is up to 10.1%, up a couple tenths of a percent from July, and up from 4.7% in January 2008. I suppose it is theoretically possible that the price declines could have stalled, but with record or near-record — and worsening — unemployment, among other continuing economic woes, I highly doubt it and see no indication of it. We’re not even close to deflating this bubble yet in SF, although I think we may be getting close (but still not there) in some inexpensive parts of the state where prices have now fallen more than 50%.
Badly Drawn Bear…
It would be interesting to find out what people are getting for each monthly median priced home. Wouldn’t that be $/sq ft?
You lot do not know how these things work in practice. I tell you, but you persist. Many a sub-FHA limit property in SF has more than “minor” issues. It is hardly easier than Mozillo’s heyday. It is quite the opposite. OK? Either know that, or I don’t care, “anon.”
Anonn, do you have a lot of FHA-seeking clients?
Rest assured that no one in the “10 to 15% down and more to come” crowd on here has gone anywhere near purchasing a property. That’s with the exception of Geo, who did take advantage of westrn D4 — the lone nice area to have taken such a hit across the board, by and large.
Rest assured that no one in the “10 to 15% down and more to come” crowd on here has gone anywhere near purchasing a property.
Why would they?
Wow, I could go to town here….
1. I’ve looked at sales volume and I don’t think it correlates with price movement as well as DOM. Even looking at the DQ graph, you don’t see clear correlation.
2. Re luxury market, first thing to ask is what constitutes the luxury market? Over 2 mill? That’s just expensive IMO? Now over 5 mill? That’s luxury. Care to venture a guess on how many sales there have been over 5 mill since 2007? Just 64. IMO, very difficult to make meaningful statements about “what’s happened to the luxury market” with so little data:
http://www.pegasusventures.net/wordpressblog/2009/08/28/san-franciscos-luxury-home-market/
3. As for KMAQ’s “medians are not sales,” that’s true, but only up to a point. If you’re tracking a big enough data set over a long enough period of time, there’s no reason to doubt that changes in median price give you meaningful information about what’s happening in the market.
Does that mean that your particular home has fallen as far as the median? I track changes in home prices from their all time (median) high, and I’m showing SF as down 19% as of August.
http://www.pegasusventures.net/wordpressblog/2009/09/16/focus-on-noe-valley/
So unless you bought a roughly median priced house at the top of the market, no, there’s no reason to assume that your house is down that much. But I’m pretty sure it’s down.
“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
– Upton Sinclair
“I’m with the SKY IS FALLING camp.”
With the Fed printing hundreds of billions, the government backing banks/investors/GSE for trillions, and the defecit tripling, I can see how the government is preventing the sky from falling. Heck, with all that manipulation, if they didn’t prevent the sky from falling I would be really pissed off.
I have been saying since March,
If you found a wonderful home that you can easily afford, go for it, otherwise, what’s the rush?
“This is utterly false. Compared to Mozillo’s heyday underwriting standards are 1000 times more stringent. You can’t even get FHA loans if, for example, the front stairs need too much work. But you’d know that, right?”
True, but with a credit score of 510, you can buy a track home in decent condition with a DTI of 56% with almost nothing down (given certain bonuses like having a college education)
I was denid FHA in SF with a DTI of 24%. Why? Because the condo building was 2-unit vs 4 unit. At the same time, my brother bought a POS track home in Sacramento for 5k down and a DTI of 49%.
They denied me for completely ludicrous reasons, yet they gave a risky loan to my brother. I have ZERO faith in the FHA program.
FHA is PROPERTY strict but not INCOME strict. They don’t care if you can’t afford the property, or if you are a flight risk due to nothing down. All FHA cares about is if the building passes its inspection and meets certain FHA guidelines.
Well, if it wasn’t tough before, it’s about to get a whole lot worse. For example, FHA is about to impose a very stringent 125% LTV requirement! Ha, that should really show the deadbeats who is boss!!!
And they are actually going to start checking the incomes stated on the application! Now that’s a stringent set of requirements right there!
Appraisals will now be valid for LESS THAN 12 months (unlike now)!! And the lender will no longer be able to hire the appraiser – these are bold, forward thinking steps!
It boggles the mind how people could think that an FHA loan was easy to get. Man, fixing that screw on the front porch was a royal pain!
“Are ya? Based upon what experience or even hearsay? None of you FHA commenters know zip about the actual process.”
I am an FHA expert because when I bought my home, NO ONE knew how to work with FHA, so I had to do it myself. True story.
Here is an excerpt from my email from my lender
“DTI on FHA loans is now allowed up to a max. of 56.99% with automated approval.
Please let me know if you have any questions, Jeremy.
Sincerely,
Nick Ivanov
MagniFund Group -5402
Mortgage Bank
16 Digital Dr., Suite 100
Novato, CA 94949
toll free (877) 244-5674
direct (415) 962-1517
fax (415) 962-4143”
I can post the 30-40 emails I have with various lenders about FHA, but I would rather not (in fact I may have deleted them already).
I know for a fact that with a credit score of 510 is all you need to use your entire tax credit as a down payment. As you can see from the email about, the DTI limits are huge.
@Jeremy,
You are generalizing from your personal experience. As someone in the middle of an FHA transaction, my view is that the property is not the stumbling block. FHA considers the regional value, and Bay Area properties are still too highly valued. Property in question is 20% under 2007 and is getting closer to making sense in rent to buy comparison. But LTV is still too high.
Meant to say SF not all Bay Area LTV …
I have been involved with several FHA transactions in the past few months. I have two FHA buyer clients currently . In m opinion, it is very much about the particular property in question. The single family houses which fall into the FHA zone, so to speak, in a decent area in SF are almost always going to have significant issues. The appraisal process is much more stringent than “Mozillo’s heyday.” And remember, that’s what I responded to. A Mozillo’s heyday flame.
“Badly Drawn Bear…
It would be interesting to find out what people are getting for each monthly median priced home. Wouldn’t that be $/sq ft?”
badly drawn bear and pumpkin patch,
Not sure how valid these are but sites like tr*lia and r*dfin have $/sf statistics. For instance, on tr*lia, the average $/sf for 94110 (noe valley i believe) was $750/sf in July/Aug vs $876 1 year ago and $738 5 years ago …
In m opinion, it is very much about the particular property in question.
Interesting…from what you’re saying (and from what others are saying), the question of whether FHA is easy (and whether it’s truly lending support to prices in the market) is more location-dependent than I had expected. So, what would constitute “significant issues”? Is this a squeaky stair or a missing kitchen we’re talking about?
What is a “track house,” anyway?
Is that one built on a race track?
Or perhaps on a railroad track?
*****
“tract house
n. One of numerous houses of similar or complementary design constructed on a tract of land.
tract housing n.”
The American Heritage® Dictionary of the English Language, Fourth Edition
Copyright © 2009 by Houghton Mifflin Company.
Published by Houghton Mifflin Company.
All rights reserved.
“I have been involved with several FHA transactions in the past few months. I have two FHA buyer clients currently . In m opinion, it is very much about the particular property in question. The single family houses which fall into the FHA zone, so to speak, in a decent area in SF are almost always going to have significant issues. The appraisal process is much more stringent than “Mozillo’s heyday.” And remember, that’s what I responded to. A Mozillo’s heyday flame.”
“You are generalizing from your personal experience. As someone in the middle of an FHA transaction, my view is that the property is not the stumbling block. FHA considers the regional value, and Bay Area properties are still too highly valued. Property in question is 20% under 2007 and is getting closer to making sense in rent to buy comparison. But LTV is still too high.”
That is completely false.
1) The Bay Area’s (including Solano and Eastern Contra Costa of course) mix of loans is like 40% FHA so your comment doesn’t hold water. Also, so long as the PROPERTY and PRICE gets passed the FHA underwriter, anyone can qualify for a home, no matter how little money down, how bad the credit, or how high the DTI is.
Again, FHA is strict on PROPERTIES (value, condition, HOAs, etc), not PEOPLE.
The property in question has now fallen out of escrow because of a PEOPLE issue not a PROPERTY issue. Anecdotal evidence to be sure, but as Tipster says above, FHA has recently issued new guidelines. They’re wising up.
“The property in question has now fallen out of escrow because of a PEOPLE issue not a PROPERTY issue. Anecdotal evidence to be sure, but as Tipster says above, FHA has recently issued new guidelines. They’re wising up.”
I do not believe it, not for one second! I have worked with FOUR lenders, and I have NEVER seen an FHA require more than 5% down with a 45% DTI. Never!
Maybe the person had a credit score of 500 or less. Maybe the person put 0% down on 729k property with a DTI of 50%. I don’t know the details, but I am very very suspicious.