According to DataQuick, recorded home sales volume in San Francisco was up 6.5% on a year-over-year basis last month (428 recorded sales in April ’10 versus 402 sales in April ‘09) but down 14.4% as compared to the month prior (and a sharp decline from March’s 50.6% year-over-year gain).
For context, April sales figures for San Francisco from 2004 to 2008 were 841 (2004), 754 (2005), 591 (2006), 568 (2007), and 605 (2008). And from 2004 to 2009 the average March to April sales volume gain was 6.3%. But do keep in mind an incentive to push April closings into May this year.
San Francisco’s median sales price in March was $692,500, up 10.2% compared to April ’09 ($628,500) and up 2.6% compared to the month prior.
For the greater Bay Area, recorded sales volume in April was down 1.9% on a year-over-year basis and up a nominal 0.2% from the month prior (7,003 recorded sales in April ’10 versus 7,139 in April ’09 and 6,992 in March ’10), while the recorded median sales price rose 21.7% on a year-over-year basis, down 2.6% compared to the month prior.
Continue to think mix:
The April median’s nearly 22 percent increase over a year ago is largely a reflection of the changes that have occurred in buying patterns across the region. A year ago many more homes being sold were inland foreclosures – homes that were often in less-than-stellar condition, and which had highly motivated sellers. Also a year ago, sales in many high-end communities were extremely sluggish. This spring the re-selling of foreclosures has waned and high-end activity is much stronger, in part because prices have come down, there’s more inventory in some areas and it appears high-end financing has loosened a bit.
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – made up 29.5 percent of the Bay Area’s resale market last month. That was the lowest since May 2008 and was down from 31.3 percent in March and 46.4 percent in April 2009. Foreclosure resales peaked at 52.0 percent in February 2009.
And with respect to financing:
Mortgages above the old conforming loan limit of $417,000 made up nearly 60 percent of all Bay Area home purchase loans before the credit crunch hit in August 2007. Last month $417,000-plus loans made up 31.6 percent.
Use of adjustable-rate mortgages (ARMs) remains far below historically normal levels, too. ARMs made up just 11.1 percent of Bay Area purchase loans last month. While that’s the highest since ARMs were 13.7 percent of purchase loans in September 2008, it’s a fraction of the monthly ARM average of nearly 50 percent since 2000.
Meanwhile, federally-insured FHA loans have kept the entry-level market humming. The low-down-payment loans, which are popular with first-time buyers and some move-up buyers, made up 25.6 percent of Bay Area purchase loans last month. That was down from 25.8 percent a year ago but up from 14.4 percent two years ago.
At the extremes, Marin recorded a 40.8% increase in sales volume (a gain of 71 transactions) on a 12.6% increase in median sales price in March while Solano recorded a 17.6% decline in sales volume (a loss of 126 transactions) on a 12.2% increase 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).
∙ Mixed results for Bay Area April home sales [DQNews]
∙ San Francisco Recorded Sales Activity In March: Up 50.6% YOY [SocketSite]
∙ He’s It’s Back: California’s $10,000 Homebuyer Tax Credit Returns [SocketSite]
But do keep in mind the incentive to push an April closing into May this year.
we’ve heard time and time again from some posters how these incentives (Fed Govt tax credit and now state of CA tax credit) don’t affect the rich SF buyers. Given that, it’s just shocking that sales volume surged, and then plummeted. (sarcasm).
it’s so hard to evaluate the RE market these days with all the govt intervention. I stand by my claim that things will deteriorate this summer, but am willing to be proven wrong.
That said: the recent (predictable) stock market volatility will likely negatively affect RE valuations. We’ve transformed a bunch of private debt into public debt worldwide, and thus we now face currency crises and sovereign debt defaults. (also very predictable, I’ve posted about this problem for years). Euro now, dollar later.
on a side note: if you own a mortgage now may the time to refinance. I’m getting a quote for a 30 year fixed mortgage for 4.25% (with 1.9 points). one thing that has definitely surprised me is that mortgage rates got this low again.
(I have quotes from Amerisave and AimLoan)
ex-Sfer, maybe it’s just SF falling back into peak type 06 and 07 seasonal sales patterns when sales also fell between March and April(some sarcasm).
It’s genuinuely clear however, that the higher end is doing much, much better. I think many were basically predicting the total capitulation collapse of this (trip, especially, but don’t think he’s around to defend himself now…)
prices going lower, especially high end.
a 10 million price will be 5 million by year end.
deflation, deflation, deflation
government out of bullets, except tax cuts, but government won’t do that
awakeandalert,
Ha Prices down 50% in 6 months huh? doubt that….especially on high-end where government tax creds mean nothing except that its more tax dollars spent toward it.
these tax cuts?
http://www.cbsnews.com/8301-503544_162-6201911-503544.html
Ha Prices down 50% in 6 months huh? doubt that….
I agree. I doubt that prices will go that low that fast. House prices are “sticky”
instead, such a collapse would show higher inventory with almost no sales. It would be a stalemate between buyers and sellers. Sellers would refuse to budge that low on price and buyers would refuse to buy.
that said, we may see some properties that had listing prices in the $10M range drop to listing prices of $5M before selling… but those initial $10M asking prices were in fairytale land to begin with.
such a collapse would show higher inventory with almost no sales
That happened last year in the high end ($2M to $10M) when the stock market was at it’s lows and rich people didn’t feel so rich. That led to pent up demand of rich people needing homes. This year they got re-rich and the high end has been pretty hot.
btw, with the new mls rule of no private sales prices, apparently there have been a lot more private non-MLS sales. the high end is a pretty exclusive club of agents so they don’t need the MLS the way the rest of the market does.
real estate lags the financial markets
the financial markets are going lower
financial markets will likely go lower than 2009
rich people are not feeling so rich after the last few weeks
in spite of all the bailout money they received, banks are not lending-they are still attempting to clean up their problems, which will only continue to spread
mls or no mls, clubby real estate agents or not clubby real estate agents, it’s their clients that buy-private or not private-their clients are frozen and are getting liquid if anything
If you thinks bank lending is restrictive, it has more than met its match w/US tax policy which is even more restrictive.
Bottom line, cut US corporate taxes from the mid 30%s and corps will hire and people will have money to buy homes and all the property bulls will be able to heave a sigh of relief
“cut US corporate taxes from the mid 30%s”
Red herring and more of an ideological suggestion than one based on economics. Exxon paid no corporate taxes in 2009. Bank of America and Wells Fargo paid no corporate taxes in 2009. GE paid an effective rate of around 5% in 2008. Just because marginal tax rates are a particular rate doesn’t mean large corporations pay anything close to that rate.
And if you’re talking about small businesses, many of those are sole proprietorships, partnerships, LLCs, and S corporations, none of which pay corporate taxes unless they opt to do so.
@sfrenegade
sorry, you are wrong about corporate tax rates.
Corporate Income Tax Rates–2010, 2009, 2008, 2007, 2006, 2005
Taxable income over Not over Tax rate
$ 0 $ 50,000 15%
50,000 75,000 25%
75,000 100,000 34%
100,000 335,000 39%
335,000 10,000,000 34%
10,000,000 15,000,000 35%
15,000,000 18,333,333 38%
18,333,333 ………. 35%
“taxable income” and “effective tax rate” are the operative terms…
awakeandalert — you do not seem to understand the difference between a marginal tax rate and an effective tax rate. Please learn and then come back to us.
For a company with hundreds of millions, or billions in net income, the marginal tax rate will be pretty much equal to the effective tax rate. I think that was awakeandalert’s point.
Looking at the tax table, any income over $75k gets taxed ad 34% or more….so sfrenegade I am not sure I understand your point.
Having your first $50k of earnings taxed at 15% and your next $25k taxed at 25% is a pretty meaningless discount if your next few million are taxed at 34% and higher.
And yet, while Exxon made $45.2B in gross operating profit in 2009, they paid zero in corporate taxes. Again, effective rate is not marginal rate. Exxon’s effective corporate tax rate was 0%.
General Electric made $10.3B in pre-tax income in 2009. They received a $1.1B tax BENEFIT. Their effective corporate tax rate appears to be -11%.
I am taxed at a top marginal federal income rate of 33%. My effective tax federal income tax is 20% because of deductions, etc. I am not sure why this is such a difficult concept.
[Editor’s Note: And now back to the April numbers at hand…]
sfrenegade:
it is a difficult concept when people don’t WANT to understand the concept.
Let’s not use individual companies.
in 2004 as example, the weighted average EFFECTIVE tax rate was 25.2%. (source, government accountability office)
http://www.gao.gov/new.items/d08950.pdf
over 30% of corporations paid less than 5% effective tax rate in 2004.
initial data indicate that the effective tax rates for corporations have plummeted the last 2 years due to the recession but official data isn’t out as far as I know.
Sorry for the diversion, ed.
Do we have good data on the number of short sales and foreclosures (i.e. transactions that closed) in the City and County of San Francisco for April?
We are in strange mortgage rate times.
Btw, I will also be interested in what the 2010 Q1 update for the Prestige Index will be:
http://www.firstrepublic.com/lend/residential/prestigeindex/sanfrancisco.html
Case Shiller data for March will be out soon, and First Republic updates the Prestige Index quarterly.
Market trends will simply drive you crazy.
It’s important to remember that numbers can write any story you want them to tell. These numbers include everything from Hunters Point to Presidio Heights.
I don’t think San Francisco will decline 50% as previously predicted in the above post. I always focus on buying quality locations that are always in demand so I don’t have to worry about month to month details. Sometimes it’s fun to be trendy but not in Real Estate…
I do agree that some sellers are in the past in pricing somewhere between ” dot com ” and the frenzy of 2003-2005. It’s hard to ” let go of ” perceived wealth. I wish people would remember that pricing assets appropriately will always give them a better result.
If the Real Estate market was like the Stock Market this wouldn’t happen so much. Sellers always want more than their asset is worth and buyers always want to pay less than market value. Nothing new.
It’s always good to check the stats. but use your best long term judgment first when gauging the market.
Okkkkayyyy…
David, not trying to be harsh here, but you just wrote six paragraphs and somehow didn’t say anything. You seem like a nice guy – but guy, content.
Anyway, the Prestige Index for SF should see a pretty solid uptick. Our in house stats showed that sales volume for $2M+ range doubled.
5 Fridays in April 2010. 4 Fridays in April 2009. Dunno how much the Friday effect impacts the overall numbers, but in my limited experience closings do tend to happen on Fridays.
“Dunno how much the Friday effect impacts the overall numbers, but in my limited experience closings do tend to happen on Fridays.”
I’m always quite a bit skeptical of this theory as the most important factor driving the monthly number because it should affect all counties in the Bay Area equally. Looking at all counties, even if the number of Fridays affects the numbers, the number of Fridays is likely not among the most important factors driving the numbers.
Indeed there was a slight uptick in the Prestige Index — right around 1%:
http://www.firstrepublic.com/lend/residential/prestigeindex/sanfrancisco.html
The index is down a little over 21% from the 3Q07 peak, nominally. It is almost exactly where it was in 2Q04 nominally and up right around 6% from the 2Q01 peak nominally.