CFAH

San Francisco Listed Housing Inventory: 11/15/10 (www.SocketSite.com)
Inventory of listed single-family homes, condos, and TICs in San Francisco fell 7.6% over the past three weeks to 1,834 active listings. On average, inventory has fallen 5.7% during the same three weeks over the past four years.
Current listed inventory remains up 36% on a year-over-year basis, up 21% versus the average of the past four years, and up 37% as compared to an average of 2006 and 2007. Listed sales in October (372) appear to be off by 17% on a year-over-year basis.
The inventory of single-family homes for sale in San Francisco remains up 55% on a year-over-year basis to 764 while listed condo inventory is up 25% to 1,070.
Almost 47% of all active listings in San Francisco have undergone at least one price reduction while the percentage of active listings that are either already bank owned (106) or seeking a short sale (189) is up to 16%, up 4% on an absolute basis over the past two weeks to a new decade-plus high.
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).
San Francisco Listed Housing Inventory Hits New Half-Decade High [SocketSite]

Comments from Plugged-In Readers

  1. Posted by eddy

    Is the decade @16% thing just a random number and time window? Has it ever been this high, like was it 17% 11 years ago? Or is this just the number being presented in a sensational way? I wouldn’t be surprised if it is the highest on record. Given that we had these high levels of inventory the number at a percentage could be even higher. Anyway, the market feels surprisingly healthy with buyers and sellers doing what we’d expect. I wouldn’t want to “have” to sell right now. OR anytime in the next few years honestly.

  2. Posted by hangemhi

    given the fact that the SF MLS only added REO and Short sale check boxes within the past couple of years I have the same question. but i do enjoy the sensationalism so why not say it’s a “half decade high” – you know, somehow or another there are more REO’s today than in 2005 – who woulda thunk it. And half decade is a LOT longer than 5 years isn’t it? Certainly sounds longer. A quarter score doesn’t sound ominous so you can’t go there.

  3. Posted by tipster

    San Francisco average PPSFT is now below the year ago period and even below the worst of the 2009 “bottom” and falling fast (during a period that it usually stays pretty flat or rises).
    http://www.redfin.com/city/17151/CA/San-Francisco
    Interest rates continue to shoot up. According to Bankrate.com, in a week and a half, the average payment for 30 year fixed is up by 5% (average interest rate was 4.21, now 4.43, difference of 0.22, 0.22/4.21=0.052). That means a buyer who qualified for $X last week only qualifies for $0.95X this week. Same buyer now has less money to spend. In an environment in which there are far more sellers than buyers, prices have to fall to meet the market reality. Buyers are no worse off as a result – this problem is all for the sellers. A seller who didn’t get it sold ten days ago now has the burden of higher interest rates to saddle the price down even further. Sellers need to cut to the bone because the number that finally results drops every week.
    Every seller in San Francisco just lost 5% in ten days. I agree with eddy, I wouldn’t want to have to sell now or any time in the forseeable future.
    Unfortunately, there are enough people who DO have to sell, that the market can be completely satisfied with desperate sellers, foreclosures, etc, so its no wonder the average ppsft is at a new since-the-bubble-started-to-burst low.
    Current buyers will regret that decision, no matter how cheap prices look. How much longer will frustrated sellers keep throwing tens of thousands of dollars down the toilet on mortgage and property taxes and upkeep and insurance for a property they have already decided they don’t want? Add staging costs and record high inventory and you have an crushing financial disaster for sellers in the making: a want can turn into a desperate need in 4 months when $40K has been pissed away in the interim and the next property tax installment is coming due.
    The number of new listings continues to outpace sales. The reason for the drop in inventory is the result of forelorn sellers withdrawing from the market throwing their retirement money away on a property they don’t want. The $40K they will spend on keeping that albatross until next spring is an absolutely fabulous vacation. That’s OK. They can just stay at home and watch TV when they retire, with the satisfaction that some banker used their money to have a great retirement, even if theirs sucks beans. They will get nothing for that $40K, other than the ability to remarket the property next spring for an even lower price.
    Even if only a fraction of the current, dejected sellers capitulate, there is such a flood of properties relative to the number of buyers willing to pay more than rent in order to own a place, that even if a few sellers, struggling under the weight of tens of thousands of dollars of unwanted interest and property tax payments between now and next spring, throw in the towel and price aggressively, the market will fall under the weight of all that money being thrown away on an unwanted asset, month after painful month.
    Should be quite a bloodbath next spring.

  4. Posted by A.T.

    Here is another new low for the bubble and post-bubble period. Altos Research tracks the Market Action Index, which “illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory.” A number higher than 30 indicates a sellers’ market and under 30 indicates a buyers’ market. The current number is now just under 19, the lowest I’ve seen. Yeah, it’s just a proprietary number by a research firm, but a well-respected firm. One more indicator of the very slow market.
    http://www.altosresearch.com/research/CA/san-francisco-real-estate-market
    Inventory is high. Sales are low. The market is weak and prices continue to decline.

  5. Posted by eddy

    It’s only a bloodbath for those that bought in 2005-2009 and even then it is only a bloodbath for those that need to sell. Many people are selling their home with nice gains. What we’re NOT seeing, are people that still are sitting on massive RE gains who ARE selling in droves now to protect against the next down wave of prices. And there were clearly a lot of people that did actually “move out and rent”, at or near the peak. Actually there were some that did this in 2006 and lost out big time as the markets continued to gain massively over the next 2-3 years before tides changes. Point is, timing the market is hard. If you are a buyer now, best to be patient and find the deal that makes the most sense. If you can wait 6-8 months, it may make sense. If you can’t wait (baby, etc.) and you plan on living in the home for over 7 years, than you are probably no better or worse than if you bought in 1999-2003. No one knew 2004-2008/9 would be a massive bubble up. Sure, there were those of us who realized the economics were getting out of whack (and was the reason for the genesis of SS, I believe). But, anyone that claims to know what 2012-2016 holds for the future of real estate is guessing at this point. Too many external factors. Good luck out there!

  6. Posted by polip

    well, it actually is a bit of a bloodbath (maybe too strong of a word) for those who bougt at/near peak and don’t need to sell.
    It is still a large opportunity cost, and yes, that matters. It is one of the failings in personal finance that people think of gains and losses only ocurring at the beginning and the end.
    If you bought near peak, and are down by x % that is a loss (leveraged likely). Holding on to it is just your decison that yes, I would buy it right now at the its fair market price. That is a loss. Culd you have lost the same elsewhere? possibly or even probably.
    $1 million house in 2006, 800k for same house in 2010. Very easy decision as to which one you would buy. So the question for those that are ‘bathing’ – net of transactin costs, would you buy your house today at what it would cost? If so, stay. If not go. If you are forced to stay or go, then the decision is out of your hands, and will either force you into the correct or incorrect decision…

  7. Posted by lol

    A bit of red in the Bayview, that’s for sure.
    1036 Innes at 169K is asking Y2K price or 70% under the 2006 very bubbly 569K price.

  8. Posted by someone

    Do you keep data on multi-family properties? That might also be interesting to look at; especially the 2-4 unit category which so many SF buildings fall into.

  9. Posted by hmmmm

    “Many people are selling their homes with nice gains.” I’m open to this and trust me, I’d love to see the evidence, whether a variety of apples to apples or other info or data. I just can’t see it.
    Also, anecdotally there is a lot more supply in SFH’s or 2 units in the real SF. I know people used to say it would never hit the core counties in the bay area, then that it would never hit SF, then that it was only SOMA and in bad areas, then that it would never hit the “real SF.” Then there was the talk that Pac Heights, Cow Hollow, Presidio Heights, Russian Hill had no supply, and now it’s talk that the core is not down as much as other areas. I just think there is less forced selling out there, but there is a lot of more supply on and off the market just sitting there. Thus it’s a painfully slow market to adjust and kind of dissatisfying for both buyers and sellers. Most of the personal anecdotes that I have are from friends (though mostly in condos and not in SFH’s, but in these neighborhoods)- and there is definitely a feeling of clinging to hope that things will get better.

  10. Posted by diemos

    “I’m open to this and trust me, I’d love to see the evidence, whether a variety of apples to apples or other info or data. I just can’t see it.”
    Good lord, anyone who purchased before 2000 and didn’t refi themselves to death should be able to easily sell their property for a windfall profit.

  11. Posted by .

    my take is that SF sellers realized just this past summer (after the credit expired) that their real estate “investment” is losing them money and more important will continue to be a losing investment in the years to come.
    it took 3 full years for most of them to get out of the denial phase and face realization that after QE1, banks holding back foreclosures, a dismal economy and high unemployment, that maybe house prices in SF won’t appreciate 10%/year. duh.
    next year or two will be interesting. i expect prices to take serious reductions as sellers act on their realization that they are throwing their money down an empty pit.

  12. Posted by sanfrantim

    Meh! Count me as unimpressed with your “bloodbath.” Values on the whole are relatively stable after having adjusted down from bubbly peaks. The latest CSI numbers show modest gains over 2009. Inventory levels do not indicate panicking sellers; though high levels are in line with 2008 levels. And if I had a nickel for every time I heard a doomsayer on this site say “Just wait til next year/spring/summer/fall”… I could buy a pac heights condo!

  13. Posted by tipster

    It’s only a bloodbath for those that bought in 2005-2009
    Tell that to the owner of 240 Lombard #731. They had it listed at its 2003 price, didn’t sell, and so they just lowered it to its 2001 price.
    Dec 31, 2003 Sold (Public Records) $365,000
    Jul 27, 2001 Sold (Public Records) $347,000
    Feb 06, 1998 Sold (Public Records) $190,000
    Jul 23, 1996 Sold (Public Records) $146,000
    Currently listed for 349,000. By the bank.
    http://www.redfin.com/CA/San-Francisco/240-Lombard-St-94111/unit-731/home/1586281

  14. Posted by .

    tim, you seem to have a reading comprehension problem.

  15. Posted by sfrenegade

    “The latest CSI numbers show modest gains over 2009.”
    Except for the fact that we haven’t seen the Morgan Stanley breakdown for the latest numbers of organic sales vs. short sales/REO. In those numbers, short sales/REO were way up, but organic sales were down YOY. Look for the “Mix, pshaw” thread to see what I mean if you don’t know.

  16. Posted by sanfrantim

    Nope. Just not impressed with your “take” on the market or your predictions.

  17. Posted by A.T.

    We’ve had this discussion before. SFRs in the bay area did not drop 36% from January 2008 to March 2009, as CSI indicates. That is just ridiculous. They fell, even a lot, but not by that obscene amount. Nor have they risen 21% since March 2009. That is equally absurd. Maybe the Morgan Stanley point explains how the CSI numbers went all crazy during a stretch or maybe not, but nobody can credibly argue that those numbers are grounded in reality.

  18. Posted by sfrenegade

    “SFRs in the bay area did not drop 36% from January 2008 to March 2009, as CSI indicates. That is just ridiculous.”
    That’s correct. The Morgan Stanley numbers explain this well too. Case-Shiller tells you something, but, as many things, doesn’t tell the whole story.
    I assume sanfrantim was talking to . at 10:18AM and not me.

  19. Posted by diemos

    Case-Schiller is based on the SF MSA which is both SF and surrounding counties. There are plenty of places that are down more than 36%; hayward, richmond, vallejo, hercules etc. There are plenty of places down around 36%; Livermore, fremont, bayview, etc. And plenty of places that are down less than 36%.
    Trying to reduce a highly varied set of markets down to a single number is always going to lose information.
    However, that doesn’t mean there is a problem with the CSI number. It is what it is.
    The problem comes when you try to draw conclusions from it that it just doesn’t justify.

  20. “It is difficult to get a man to understand something when his job depends on not understanding it.” – Upton Sinclair

  21. Posted by EBGuy

    Pent up supply never sleeps. Currently, 1489 homes are in some state of foreclosure (NODs, NOTS, bank owned) in Ess Eff. This is compared to 1467 homes two weeks ago. Standard disclosures about noise in the data; information deemed reliable but not guaranteed.

  22. Posted by tipster

    There are currently 1760 homes for sale and in the last week, there have been 13 sales.
    That is 32 months of inventory.
    Clearly, the situation is deteriorating rapidly.
    😉

  23. Posted by PUAgent

    I am surprised to read Tipster’s statistics because my sense of the market is less gloom and doom. In my personal business, things have picked up drastically since this summer. My recent open houses have been full of qualified buyers and my buyers have been faced with quick decisions and/or multiple bid situations.
    It’s still fundamentally a buyer’s market, but starting in mid-October, things really started to move. Of course, things will slow between Thanksgiving and New Year’s Eve per tradition, but I am optimistic about the upcoming Feb to May spring market. We’ll see.
    And I just did a quick check on the MLS: it says there are currently 1655 singly family homes, TIC’s and/or condo’s listed as active in San Francisco. An additional 903 are currently in contract either with contingencies (active contingent status) or simply waiting to close (pending status). Last week (11/21 to 11/27) only 21 closed escrow, but that was a holiday week. The week before (11/14 to 11/20) the MLS reports 79 units closed and from 11/6 to 11/13, 62 sold. The sky isn’t falling.
    Prices are down, money is cheap and my current buyers realize this may not be the bottom, but they feel like it is close enough that if they find a good property, they’ll buy now. Only time will tell if they are right but meanwhile they’ll be living in a home they presumably love.

  24. Posted by R

    You’re surprised that Tipster is pulling stats of sales from Thansgiving week and trying to stretch that to make it show there are 32 months of inventory?
    You must not read the rest of Tipster’s drivel… He complains that medians and averages aren’t accurate, but this is?

  25. Posted by The Milkshake of Despair

    tipster is just making a joke. He understands seasonal effects.

  26. Posted by R

    Oh. I should have known since most of his posts are jokes.

  27. Posted by tipster

    Yes, R, you didn’t get it, even with the “;-)” at the end. That’s pretty amazing.
    I was making fun of this post by a realtor early this year who, after the realtors pulled all of their listings from the prior year and put them back on in Mid January 2010, thereby artificially depressing the average number of days on the market only because of the misleading, manipulative actions of the realtors, wrote:
    In January 2010, the average days on the market (DOM) fell to the lowest level since September 2008 , another sign of increasing demand for San Francisco real estate.
    Posted by: Katy Dinner at February 25, 2010 9:25 AM
    https://socketsite.com/archives/2010/02/into_our_apple_cart_and_back_to_2005_79_woodland_goes.html
    This is of course what the realtors do. They twist and distort the statistics and then point to them as a sign of “increasing demand”. Ha ha, the gig is up. Not only are we all on to you, we can do the very same thing!
    Glad to hear the market is booming PUAgent. And I’m shocked, shocked(!) to hear a realtor say that his open houses are “full”. And my, not ony are they full, but they are full with “qualified buyers”. Apparently you interviewed each one to make sure you knew they were “qualified”. That must have been very patient on behalf of the throngs at your open houses, to let you verify the financial status of each one. “Throngs of People: Stand in Line Here to Let Me Determine If You Are Qualified!”
    The open houses I go to have primarily neighbors. Very nervous neighbors who are so far underwater they can’t qualify for a loan to buy a loaf of bread! But I’m sure it’s different where you are.
    Ha ha, I also heard the malls were “full” on black Friday this year, only to find out (again, shocked!) that sales barely budged from last year, which was pretty dismal. Here’s a quote from one article that sums up the situation exactly:
    Debbie Schwig joined the throngs at Apple Inc.’s Fifth Avenue store in Manhattan yesterday with her husband and dog. They didn’t buy a single gadget.
    “We’re here to check things out today,” said the 47-year- old nurse from Hoboken, New Jersey. “We’ll wait until vendors get more desperate.”
    http://www.bloomberg.com/news/2010-11-26/toys-r-us-sears-open-early-as-black-friday-shoppers-flood-u-s-stores.html
    Sounds like people at the full open houses you are having.
    And it’s so crystal clear that you clowns have switched from “the market is fine, fine” or “It’s on a busy street” to “OK it’s still a buyers market, but not for long!/it’s not as bad as you think!/etc. Clearly in your sales meetings, the managers telling you to deny, deny, deny were met with “but no one believes that any more” so they told you to admit the obvious but try to minimize it.
    Not working. In the last 30 days, about 20% of the properties have reduced their price. Did you say, starting in mid October, things really started to move? It’s pretty clear why: the sellers started to get D-E-S-P-E-R-A-T-E and dropped their prices. The buyers have all the time in the world.
    Should be quite the bloodbath this winter.

  28. Posted by PUAgent

    Gee, it sounds like Tipster had some extra bitter cranberry sauce on Thursday. He normally handles a contrary opinion graciously. It’s clear his spreadsheets are telling him there is going to be a “bloodbath” in SF real estate this winter/spring. That’s fine.
    My recent experience with real, live buyers and sellers makes me think differently. Yes, it’s clearly a buyer’s market, but if you think you are going to be getting huge discounts this spring ala Tipster’s predictions, you are simply naïve.
    My last listing hit the market in early October and I had over 90 groups through the first Sunday. The second Sunday was raining and I still had 40+ groups. At least half were neighbors, but the rest were serious buyers. I had 6 offers all over asking.
    This is one house and doesn’t mean it’s a booming market by any stretch. It just means there are plenty of buyers out there. And none are stupid. They all look at the same data as Tipster and for them it makes sense to consider buying right now. We’ll see if they come back for the winter/spring market.

  29. Posted by A.T.

    “This is one house and doesn’t mean it’s a booming market by any stretch. It just means there are plenty of buyers out there.”
    No it doesn’t. As you said, this is just one house, and that’s assuming this whole anecdote is not fabricated (and even then, 130+ groups, half of whom were supposed “serious buyers,” yet only 6 offers — I guess they weren’t so serious after all).
    The current, extremely slow sales numbers prove there are not “plenty of buyers out there” unless you’re talking about potential buyers once prices are substantially lower than current offerings. We’re getting there, but it will be a while before prices have finally fallen far enough so that sales volume picks up.

  30. Posted by tipster

    Interest rates are up AGAIN! Bankrate says the average is 4.74. Three weeks ago, it was 4.21. (4.74-4.21)/4.21= 12.5%. That’s how much less everyone qualifies for this week as opposed to three weeks ago!
    Someone who qualified for $1,000,000 three weeks agao now can not qualify for a penny over $875K. Someone who could afford payments on a $1,000,000 condo now can only afford $875K. Wow!
    Unless someone can invent a magical money machine, the value of every property in SF has dropped by that much in the last three weeks. Where else will people get more money?
    Properties that had been down 33% will soon be down 45%!! There is NO WAY to get more money. You can only qualify for so much. You can only afford payments on so much. And that amount is lower. Same group of buyers has less money.
    Should be fun times this winter.

  31. Posted by lol

    tipster,
    This is a pretty brutal unraveling, especially in the 10-Y bond market which shows rates are heading further north. I wonder how this will disrupt current contracts. People who signed 3 weeks ago with a number in mind and who have now to rethink their financing. No doubt quite a few of them will ask for a reduction to the seller…
    Krugman has a piece about the 10-Y bonds today. I think he’s in denial that there is an underlying phenomenon. Everyone has an indigestion of debt.

  32. Posted by A.T.

    Rates are still low, but the record lows of recent months are over. Even those were doing little to cushion SF price declines, but (and this is the main take-away from tipster’s post) now even that cushion is disappearing. Price declines will accelerate as rates go higher. Tightening lending requirements will only add to it. The demand (willing/able buyers) is extremely low right now. Hence the low sales figures.

  33. Posted by Rillion

    >Rates are still low, but the record lows of recent months are over.
    Yeah, rates are still very low despite some hyperbole by some. I follow the 1-Year LIBOR because that is what my ARM is tied to when it resets in 2012. While it has gone up in the last month it is still lower then it was a year ago and if it reset today I’d see my interest payment cut in half, so still a lot of room for it to rise before I start getting worried. The 1-year LIBOR would have to rise an additional 3% (or quadruple basically) in the next 14 months for my interest only payment to increase when it resets for 2012.
    Still regardless of the interest rate, I won’t pay a penny of principal if my place while my place is underwater. So still have 6 years for the market to recover.

  34. Posted by tipster

    Interest rates are up AGAIN! Bankrate says the average is 4.87. A little over three weeks ago, it was 4.21. (4.87-4.21)/4.21= 15.6%!!! That’s how much less everyone qualifies for this week as opposed to three weeks ago!
    Someone who qualified for $1,000,000 a little over three weeks ago now can not qualify for a penny over $844K. Someone who could afford payments on a $1,000,000 condo now can only afford $844K. Wow! Those who could afford $875K three days ago just got whittled down to $844K. Can you believe how fast this is occurring?
    And during a time that the fed is buying a bazillion dollars in treasuries to try to keep interest rates low. Face it, the fed is completely powerless to stop this.
    Unless someone can invent a magical money machine, the value of every property in SF has dropped by that much in the last three weeks. Where else will people get more money?
    Properties that had been down 33% will soon be down 49%!! There is NO WAY to get more money. You can only qualify for so much. You can only afford payments on so much. And that amount is lower. Same group of buyers has less money.
    Should be fun times this winter. It’s shocking how fast this is occurring. 1,000,000 to 844,000 in a little over three weeks!
    After the elections, interest rates will start to rise. That’s when home prices will get clobbered. That’s only three months away.
    Posted by: tipster at August 13, 2010 9:10 AM
    Wow, how does he do it?

  35. Posted by Jimmy (No Longer Bitter)

    Interest rates are almost back to where we were in June. The world is ending.

  36. Posted by [anon.ed]

    Black Friday turned out to be quite good, actually. http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/12/14/financial/f053614S03.DTL#loopbegin
    (Shockingly, even though Debbie Schwig didn’t buy anything at the Apple Store. Debbie is a chief indicator for the economy and for SFRE both.)

Comments are closed.

Recent Articles