Recorded home sales volume in San Francisco fell 1.0% on a year-over-year basis last month (495 recorded sales in March 2011 versus 500 sales in March 2010), up 45.6% as compared to the month prior which was up 4.0% year-over-year.
For context, March sales figures for San Francisco from 2004 to 2009 were 749 (2004), 731 (2005), 631 (2006), 640 (2007), 508 (2008), and 332 (2009). And on average over the past seven years, sales volume has increased 41.3% from February to March.
San Francisco’s median sales price in March was $650,000, down 3.7% compared to March ’10 ($675,000) but up 10.4% compared to the month prior.
For the greater Bay Area, recorded sales volume in March was up a nominal 0.2% on a year-over-year basis, up 41.3% from the month prior (7,051 recorded sales in March ’11 versus a revised 7,040 in March ’10 and 4,991 in February ’11) as the recorded median sales price fell 5.3% on a year-over-year basis, up 6.7% month-over-month.
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – rose in March to 31.5 percent of the Bay Area’s resale market. Last month’s figure was down from 32.6 percent in February but up from 31.3 percent in March 2010. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 15 years is about 9 percent.
Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 17.6 percent of Bay Area resales last month. That was down from an estimated 20.2 percent in February and 18.1 percent a year earlier, but up from 11.6 percent two years ago.
At the extremes, Solano county recorded a 7.9% drop in sales volume (a loss of 52 transactions) on a 11.6% decline in median sales price while Marin recorded a 10.7% increase in sales volume (24 transactions) on a 4.4% increase in median 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).
∙ Sales up, Prices Down for Bay Area Housing Market [DQNews]
∙ SF Listed Sales Volume Up 1.5% In Feb As Medians Continue To Fall [SocketSite]
∙ San Francisco Recorded Sales Activity Up 4.0% In February [SocketSite]
So in all seriousness, what exactly are we using this data for on this chart. Home sales are down, OK, but we don’t have any data prior to 2004 so its hard to know what is normal. Seems sales are trending back up, or recovering at least, since a low point in 2009. We can’t trust medians to tell us anything meaningful in terms of market appreciation (a point that I tend to agree with). Still lots of interesting things out there and I really can’t wait to look back from 2015 to see where we are right now. I suspect we’ll be slightly improved with the “bottom” occurring somewhere mid 2010 and bouncing near the bottom for a few more years (2013)? Interesting to see if the double dip comes about as well.
As a side note, I’ve noticed this regularly recurring SS post just doesn’t get the banter is used to in the past.
You could compare annual sales now to annual sales as provided by SocketSite in the past:
https://socketsite.com/archives/2007/01/san_francisco_homecondo_sales_historical_context.html
The data are repeated in this thread:
https://socketsite.com/archives/2007/07/justquotes_when_rates_rise_what_happens_to_prices.html
It seems like hitting 3300 and higher for SFH was on the high side — the 1990-1991 peak, 1997-1999 for the dotcom boom. I’m not sure if 2003-2004 makes that pattern break down or not. How do 2007 and 2008 compare and 2009 and 2010 for that matter?
The condo numbers have a more obvious pattern — 2002 and higher had number that were never hit before, with the closest being 1999, but that also coincides with massive numbers of condos being built, so you still need to normalize the data.
“As a side note, I’ve noticed this regularly recurring SS post just doesn’t get the banter is used to in the past.”
Well, we’ve been over the fact that the MLS shows a slight YoY March increase. So taken together this DQ slight decrease we’re pretty much looking stasis. Not particularly interesting to talk about, no.
stasis only while the fed pumps in $600B. After that ends, not very likely to be stasis.
And if they can’t shut it off?
Oh so we agree it’s in a period of relative stasis now? What happened to all your opinions of a two weeks ago? You know, week over week (“WoW TM”) disaster / realtors are getting decimated/ down down down / break into song/ gotta talk it down/ gotta get me a Pac Heights 2 br condo for two bits / (delusional) everybody checks for my opinion because I’m “Tipster” on Socketsite/ and Sockestsite shapes markets/ it’s my duty to shape this market / never mind the foil on my cranium/ etc etc ?
somebody has their grouchy pants on today
Not really. It’s all pretty funny and intended to be so. Just a litle weird that so many people let Tipster do what he does on here without calling him out.
This chart is still useful to show the longer term trend, even if it is not the whole story but just one piece of the puzzle (as is any limited set of data points). This chart, MLS YOY median sales, listing prices (down YOY) and volumes (up YOY), pendings (flat YOY), and various apples all continue to indicate prices drifting lower – not collapsing like two years ago but continuing slowly down.* And this is with record low mortgage rates, higher GSE limits, QE2, and a slowing of foreclosures during AG investigations, all of which will end soon (except perhaps low mortgage rates which I predict will stick around longer). The question is whether price declines will again accelerate when these supports are eased out.
* there are, of course, isolated exceptions, just as there were during the recent period of rapid price declines.
Yeah, have to agree.
The past few months didn’t turn out to be as B-R-U-T-A-L as predicted.
And the comaprisons of sales by the week/day/hour on Redfin didn’t translate into such a disaster of a month either. Quite the opposite actually – a pretty decent spring bounce.
Don’t forget the potential impact of shutting down or reducing the scope of Freddie Mac and Fannie Mae, as well as the talk of getting rid of mortgage tax deductions. The tax reform may all just be talk, but looks like something is going to happen with Freddie Mac and Fannie May. Enough to suggest that the tough times for housing may not be in the rearview mirror and a bit early to call the housing market bottom.
You think the GOP will go for getting rid of mortgage tax deductions? Reducing the scope of Fannie and Freddie is probably going to happen IMO.
Agree with fluj on this one. The mortgage tax deduction really only benefits the wealthy in any material manner (but boy, lots of interested players will howl that “no, every homeowner benefits from it”), and the repubs are not going to let that giveaway to the rich expire.
Maybe the mortgage deduction can be discussed when the economy is booming and there are no concerns over debts and deficits. But it would have to be an extremely gradual phase out. Doing it instantly would absolutely devastate the housing market and the economy.
Bottom line, it’s not changing in the foreseeable future. And believe me, I would be strongly in favor of a 20% flat tax on income with no decuctions.
You flat-taxers are nutty. Eliminating deductions…? Forget it! That would raise my taxes significantly and now that I’m vested in the current system there is no way I will support any changes. Count me among the majority of homeowners (and voters) in supporting the status quo.
About the only change that I could see passing on the mortgage deduction is a lowering of the amount of mortgage debt that qualifies, which is currently $1.1 million ($1 million purchase and $100,000 on home equity). I wish they would cut it in half ($500,000 & $50,000).
I can also envision eliminating the deduction for second homes. But again, since it is generally the wealthy who have a second home and claim that deduction, I would not bet on even that passing.
flat taxes always sound better on paper than in practice.
For a couple barely surviving on minimal wage, 20% is probably what they spend on food. It would cut down on the basics for them. Not so much for a couple making 5 times minimal wage.
As much as I hate seeing people free-loading on OP’sM either on the lower end or the upper end, I still favor a progressive tax system.
As far as Mortgage Tax Deductions is concerned, subsidizing home-ownership is a misguided policy. It props up prices artificially. Tax money would be of better use in health care, education, retirement, infrastructure. There will always be people to buy or rent houses. Everyone has to live somewhere and prices always adjust to fill that need.
There would be three effects of eliminating the MID: prices of existing houses would fall, followed by whatever blowback that would produce; raw land and finished lot prices would decline, whose value includes the value to the dwelling that can be erected on the lot; and house size would decline so the net monthly cost of the house + land would be equal to what the net monthly cost after using the MID is now.
So if it looks like the MID will be eliminated, short land!
“As far as Mortgage Tax Deductions is concerned, subsidizing home-ownership is a misguided policy. It props up prices artificially. Tax money would be of better use in health care, education, retirement, infrastructure. There will always be people to buy or rent houses.”
I agree. The mortgage interest deduction is one of those weird artifacts from the 1986 tax code. Before 1986, all interest of any form was deductible, but since then it’s only mortgage interest and investment interest, for the most part.
Rillion points out another problem, even when we decide something is a worthwhile policy goal — sometimes they go overboard. It is dumb to allow mortgage interest all the way up to $1M to be deductible and dumb to allow any mortgage interest other than primary residence to be deductible (except as a true business expense if you are renting out a property).
However, that’s not nearly as dumb as what we’re doing with cancellation of debt right now. $2M is ridiculous.
I see everyone’s jumped on the tax bandwagon, pretty unanimously declaring it “not gonna happen”, but barely a mention of the squeezing of Freddie Mac and Fannie Mae, which looks like it is already underway and unclear how far it will go. Not going to be a significant effect?
“but barely a mention of the squeezing of Freddie Mac and Fannie Mae, which looks like it is already underway and unclear how far it will go. Not going to be a significant effect?”
Fannie and Freddie must be squeezed because otherwise private lending really won’t come back. In order to bring back private lending, you have to reduce the subsidy.
I do think it will have an effect on the market. Right now, the markets are propped up somewhat by free money, as many people have mentioned.
“Tax money would be of better use in health care, education, retirement, infrastructure.”
In theory, sure….in practice, absolutely impossible.
The end result is that many of my friends and I will end up moving abroad and living the rest of our lives outside the U.S. if the tax system becomes less favorable (among other things). Politicians seem to forget that other countries actively compete for (comparatively) wealthy people to expatriate and spend their incomes there instead of inside the U.S. No taxes, better health care, costs of living a tiny fraction of California….
Come on anon, that’s a bit far fetched!
many of my friends and I will end up moving abroad and living the rest of our lives outside the U.S.
Heck, I know Europeans who live in the US almost specifically for that reason. Then what gives? Even without the Mortgage Interest Deduction taxation is still more interesting in the US.
sfrenegade,
Yes, the 1986 Interest deduction was a stupidity.
It came right at the time of a RE bubble, and intensified this bubble until it popped in 1990.
This is a typical case of “it’s too expensive: let’s subsidize it to people who cannot afford it”, which causes in turn more price increases. Another one was Neg Arms, originally there for people with no regular paychecks like independent archs or contractors, but that ended up funding the folly of part-time McDonalds employees buying 400K houses.
“The end result is that many of my friends and I will end up moving abroad and living the rest of our lives outside the U.S. if the tax system becomes less favorable (among other things).”
Cost of living is probably a better determiner of this than tax rates. Many developing countries have higher tax rates than here — most people don’t know this and assume that developing country = cheap taxes.
Several comments on above.
Yes to a progressive income tax system. Even if one supports a flat total tax for everyone (a big if)…remember that sales tax is ultimately regressive, hitting the poor hardest, and this and other “fees” needs to be balanced with a progressive income tax.
Yes to getting rid of the Mortgage Interest deduction (and Prop 13). Since I’m a renter now, I’m not speaking against my self interest here. But I agree with many of the above that getting rid of Mortgage Interest deduction is probably only achieveable on the margins (high values, second homes), because an immediate change would have a huge impact. I would love to see a gradual program, over 10 years say, to unwind it completely. But I’m not holding my breath.
“Yes to getting rid of the Mortgage Interest deduction (and Prop 13). Since I’m a renter now, I’m not speaking against my self interest here.”
That’s not true. You save money on rent because of the mortgage interest deduction and Prop 13.
^sfrenegade…granted that may be true on a case by case basis. Prop 13 keeps my landlord’s costs down. But if we didn’t have rent control, that would not necessarily keep my rent down. (and no, I’m not defending rent control..it distorts the market in all kinds of ways).
But there is no mortgage interest deduction on investment property, is there? So I don’t believe that’s a factor.
Fundamentally, I believe all three of these actions seriously distort the market, and there are winners and losers in both rental and ownership classes.
“But there is no mortgage interest deduction on investment property, is there?”
Generally the costs of owning, including financing, are deductable as expenses against the rental income for investment properities.
“But there is no mortgage interest deduction on investment property, is there? So I don’t believe that’s a factor.”
Mortgage interest is a cost of ownership for investment property, so yes, it’s deductible, but it shows up on a different deduction list. Many rentals started off as a primary residence, particularly for many SFRs, and some are converted back to primary residence before they are sold in order to use the capital gains exemption, so rentals are also at least partly affected by the mortgage interest deduction.
Is anyone really suggesting that we end the deduction for financing costs as a business expense? That would be a good way to crash the economy as business plant/property/equipment investments would plummet.
Deducting financing costs on rental properties is very different from the home mortgage deduction from an economics perspective.
“Is anyone really suggesting that we end the deduction for financing costs as a business expense?”
No, I don’t think anyone suggested that. I gave my rationale for why rentals are affected by the mortgage interest deduction, and it has nothing to do with business deductions.
However, it’s worth noting that lots of the deductions on rental properties and other tax shelters were already eliminated by the passive activity rules and at-risk rules.
Here’s my suggestion:
Flat tax (20-30%) with a $100K deduction for income, which would be very progressive. Nobody who earns under $100K would pay any income tax, and it gradually increases as income increases. No deductions for anything except business expenses (for a simple tax code). Possibly some amount of capital gains, not really sure where that should be. 100% estate tax after $1million (indexed to inflation). There would probably need to be some sort of penalty for transfering money out of the country, which increases with age. Flat export and import terrifs. Simplicity is the key, and billions could be saved if we didn’t need such a large IRS.