San Francisco Listed Inventory: 9/14/09 (
Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 9.9% over the past two weeks in a typical post-Labor Day bounce. Listed inventory is currently running 6.2% under last year’s levels on a year-over-year basis (down 10.8% for single-family homes and down 2.9% for condos/TICs) and 2.7% lower than at the same point in 2006.
Roughly 31% of active listings in San Francisco having undergone at least once price reduction with the percentage of active listings that are currently either already bank owned or seeking a short sale hovering around 11%. Expect listed inventory levels to continue to climb over the next couple of months.
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: 8/30/09 [SocketSite]

22 thoughts on “SocketSite’s San Francisco Listed Housing Inventory Update: 9/14/09”
  1. it probably doesn’t mean much, but I’m positive that a prediction 6 months ago that the snapshot on 9/14 would show inventory below the 2006 level (for any combination of reasons) would have been laughed off the site by everyone who comments (including me). rather shocking.

  2. This is not surprising. My clients, who have been looking for several months for a home, just emailed me last night about three new listings in which they’re interested. Bring it on. 🙂

  3. I’ve heard there are about 350,000 living units (homes, apartments, etc) in San Francisco. Does anybody know what the split is between owned vs rented units?
    The point I’m trying to make is that even though the green inventory line has been above the others for most of the year, inventory is still a small percentage of owned living units.
    The uncertainty created when the Dow was below 7,000 can scare away buyers for a few months, but ultimately, demand for homeownership in San Francisco remains strong.

  4. demand for homeownership in San Francisco remains strong
    That may be true at the very low end, but only at the very low end. And prices continue to decline even there. Redfin shows 448 listings at under $500,000 and 341 sales at that price level in the last 3 months — about 4 months of inventory currently. It shows 233 listings at $1,500,000 and up but only 62 sales in the last 3 months — about 11 months of inventory. (I know, there are also other ways to measure months-of-inventory, but the discrepancy remains).
    No surprise that with an $8000 tax credit, record low interest rates, expanded FHA availability (with 3.5% down — paid for with the tax credit), and a steep decline in prices, sales volume is OK at the low end. These market-propping efforts have little impact on the higher end, except low rates, but with high down payment requirements and tight lending standards for jumbo loans, there are far fewer qualified buyers than 2 years ago. We have a tale of two markets here. Nevertheless, with the continuing overall low sales numbers, I am surprised inventory levels are not even higher.

  5. what are the usual levels for these high/low inventories Trip?
    I am guessing 1.5m plus has always taken longer to sell in sf than something under 500k.

  6. REPornaddict,
    “Months of inventory” has nothing to do with how long a property takes to sell. It shows only a supply/demand imbalance, with 4-6 months traditionally showing supply balanced with demand.
    And steve, you are so wrong. I was expecting it to trend nearly flat, not go up after labor day. We’re at the point where large numbers of people are literally trapped in their homes.
    We were at a party at a Soma condo this weekend, and most of the people at the party owned in the same building. All we heard were owners lamenting that they wished they could unload that albatross and move on, but they were unable to do so, so their lives were on hold. Some wanted to move out of the area, but no way could they come up with $100K-200K to do so. So they are stuck paying more than rent for the opportunity to watch the value of the banks interest slowly deflate – their down payments, if any, having been wiped out long ago.
    I think it stays under 2006 for the rest of the year. At that point, people will start making some tough decisions.

  7. REp, I don’t know. I’ve never seen this broken down for SF. It would be helpful to see the SF trend over time. Poking around other sites has revealed some info showing that months-of-inventory has not materially differed in recent years at the various price slices (certainly not 3X), but it does now. Here is one example:
    From my informal eyeballing this issue over the last year, I’m fairly certain this is a recent development, and it makes sense for the reasons I noted above. I’m not sure it is true that in recent years homes at the $1.5M+ level have taken longer to sell than lower-priced homes (although I suspect that is true at much higher price levels). Heck, the median SF sales price a couple years ago (June ’07, SFRs & condos) was $868,000, so half of all sales were above that level. It’s possible that included few sales above $1.5M but doubtful since the average was far higher.

  8. Thanks trip.
    Tipster, steves comment was that no one would have predcited below 2006 6 months ago, not in the week leading up to Labor Day.
    certainly RHB predicted below 2008 6 months ago, many doubted it,but he was proved right.
    and I agree with Steve that given how far apart 08 and 06 was 6 months ago any prediction that 09 would now be lower would have been mocked. Nobody made that prediction, anyway, and rightly so at the time – it seemed impossible inventory levels could change that much!
    Tipster – I don’t believe there was for one moment a chance that inventory would stay level post labor day. The bump is very much a part of the market seasonality.
    Actually, I think inventory will get back above 06 levels fairly quickly, but we shall see. Either way, inventory changes have clearly been a positive indicator recently.

  9. “We were at a party at a Soma condo this weekend, and most of the people at the party owned in the same building. All we heard were owners lamenting that they wished they could unload that albatross and move on, but they were unable to do so, so their lives were on hold”
    That sounded like one hell of a party!!

  10. Meanwhile, the Coalition of the Willing continues to grow. Properties in some state of foreclosure (NODs, NOTS, bank-owned) rose from 1495 two weeks ago to 1552. Pent up supply shows no signs of abating…

  11. tipster, how can you say that “months of inventory has nothing to do with how long a property takes to sell”? it has everything to do with it
    in fact, at steady state, months of inventory is exactly the average time it takes to sell a house
    it’s called Little’s Law
    if MOI grows, it tells you also that the listing rate exceeds the sales rate (the imbalance you’re referring to)

  12. Well Tipster….so much for the theory of the long term hold. Sounds like a building full of flippers with no one to flip to. Or rather, no chair to sit in when the music stopped.
    Good story.

  13. @asiagoSF, you’re talking about the market in its aggregate, and tipster is talking about specific homes. If a home is overpriced it will not sell no matter how long it sits on the market or what the MOI calculates.

  14. Related to the thread a few weeks ago about owners pulling their listings and going rental because they can’t afford to sell for a loss:
    “Rather than selling at a loss, they decided to rent out their old home to tenants. In doing so, the Juarroses join a growing number of homeowners who have become landlords, often reluctantly, as they struggle to sell during one of the worst housing markets in recent memory. … The Juarroses’ old home costs them about $1,400 a month; they’re hoping to rent it out for $950. “It’s easier to find $450 every month than swallowing a $10,000-15,000 loss at once,” said Brad Juarros, 41. “You’re trying to decide which of these two pains will hurt less.”

    “The most prominent example may be U.S. Treasury Secretary Timothy Geithner, who after failing to sell his $1.6 million home in a New York City suburb found tenants instead.”

  15. Hope is not a business strategy. Mr. Juarros should learn your first loss is your best loss. He now risks further market decline, maintenence cost, in addition to his monthly negative cash flow.
    As the market continues to decline, we’ll see where the max pain is for these new landlords. All it takes is one to make their move and the rest will move to avoid taken further losses, resulting in much bigger losses.

  16. Should we expect more of Mr. Juarros than we do of Mr. Geithner of for that matter any of the Big Banks? All seem to subscribe to the same theory that “a rolling loan gathers no loss.”
    (Wish I could take credit for the quote but it is borrowed.)

  17. Mr. Juarros’ strategy on the micro level is eerily similar to that of Mr. Geithner and the other powers-that-be on the macro level (well, of Geithner on both a macro and micro level, apparently). Extend and pretend, delay and pray…

  18. Agreed Trip regarding Geitner et al. For me the question has always been can they prop up the banks long enough with intravenous cheap money and encourage them to delay foreclosures enough to slow down the fall of housing until the economy starts to recover, or will the next “dip” be greater than the first.
    As long as we are making predictions on future trends here, I will go out on a limb and say that the EOY 2009 inventory data point will be above the EOY2008 level of 1121, and the Beginning of Year 2010 line (red/magenta line perhaps?) will also be higher than BOY2009. I think it unlikely we will pass the 2008 peak of 1789 in the interim, but expect inventory won’t fall off as much at the EOY either.

  19. well I asked this question about a year ago to the day, I have no idea, but is now then the time to buy in the city ??? Most said not to me a year ago, and to hold on and not be in a hurry, I’m thinking South Beach area $650K 2bd/2bt (approx), this was alot to ask for back a year or so ago but seems doable now.

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