Eleven months ago Paragon Real Estate attempted to define the decline from peak for 12 segments in San Francisco.
Based on a comparison of average dollars per square foot for sales at “peak” versus an average of sales from 10/15/08 to 1/30/09, Paragon concluded that declines to date in February had ranged from 6 percent for single-family homes in the Richmond to 25 percent for single-family homes in Bayview/Excelsior. In-between were single-family homes in Noe/Eureka Valley (down 10 percent at the time) and condos in Hayes Valley/Alamo Square/NOPA (down 11 percent at the time).
In November, Paragon repeated their analysis but changed to 18 segments.
As a plugged-in reader noted last month, Paragon’s declines from peak to November (actually averages for sales from May to October) ranged from 9 percent for Pacific Heights/Marina condos to 45 percent for single-family homes in Bayview (no longer combined with Excelsior).
The decline from peak for single-family homes in Noe/Eureka Valley fell to 21 percent while the decline for condos in Hayes Valley/Alamo Square/NOPA fell to 18 percent.
And while the average price per square foot decline from peak to November for single-family homes in the much maligned District 10 averaged 35 percent, the average decline from peak for single-family homes elsewhere in San Francisco averaged 17 percent. The average decline for condos? 17 percent.
According to Paragon’s analysis, peaks for each area ranged from the first half of 2006 (bottom end of the market) to the first half of 2008 (top end of the market), with the majority in 2007 or before. As we wrote in 2006, “Get ready for what we’re going to call a real estate ‘flight to quality’.” And nobody that’s plugged-in should have been caught by surprise.
Keep in mind a comparison of average selling prices per square foot is far from perfect especially when painting with such broad brush strokes. We can’t vouch for Paragon’s methodology or results. And as Paragon correctly noted in February (but not in November), price per square foot comparisons in a down market tend to understate actual declines in no small part due to changes in mix (might “beauty pageant effect” sound familiar?).
All in all it’s just another metric to consider, some extra context for our apples (think drops from pre-2006 values), and food for thought and reflection at the end of the year.
Paragon’s November numbers versus peak (and “April”) for all eighteen areas:
Decline from an estimated peak in the first half of 2006:
- Bayview SFR -45% (down 5% from “April” 2009)
- Excelsior/Portola SFR -25% (-1.5%)
- Ingleside/Heights/Oceanview SFR -23% (-1%)
Decline from an estimated peak in the first half of 2007:
- Mission (Inner) Condo -20%
- Sunset (Central/Outer) SFR -20% (-6%)
- SOMA Condo -18% (+2%)
- Miraloma/Sunnyside SFR -19% (-8%)
- Saint Francis Wood/West Portal/Forest Hill SFR -15%
- Richmond (Central/Outer) SFR -14%
- Potrero Hill SFR -14%
Decline from an estimated peak in the first half of 2008:
- Noe & Eureka Valley SFR -21% (-6%)
- Noe & Eureka Valley Condo -18% (-9%)
- Hayes Valley/Alamo/NOPA Condo -18% (-7%)
- South Beach Condos -18% (-6%)
- Bernal Heights SFR -13% (+2%)
- Russian/Nob/Telegraph Hill Condo -13%
- Pacific Heights/Marina Condo -9% (-4%)
- Most Expensive ($1.5-4.0M) North Houses -18%