Recorded sales activity for single-family homes and condos in San Francisco slipped 1.4 percent in May and is currently running 6.1 percent lower on a year-over-year basis, versus 5.6 percent lower last month. Sales activity in San Francisco typically increases around 10 percent from April to May.
As sales volume slipped, the median sale price for a home in San Francisco ticked up 4.5 percent to a record $1.15 million, which is 21.4 percent higher versus the same time last year according to data from CoreLogic.
While movements in the median sale price are a great measure of what’s in demand and selling, they’re not necessarily a great measure of appreciation or changes in value and are susceptible to changes in mix.
Comments from Plugged-In Readers
Nice graph. Sales being 6% lower is only to be expected with inventory running even lower than that on a YOY basis.
Breaking it down, many neighborhoods median per sq ft seems to be showing similar increases to the overall 21.4% shown here, so great news all around.
Keep in mind that inventory levels at the end of March and April, the periods which would have fed May sales, were higher on a year-over-year basis.
And as we noted last month, if you drill down into the history for the neighborhoods in which you’re noticing 20 percent year-over-year changes in the median price per square foot, you might notice that an increasing share of the sales are for newly renovated, and many times expanded, homes.
One thing that deserves to be noticed, aside from insanely steep curve, is the simple fact that this metric has doubled since the early 2009 dip. This is pretty unheard of.
Agreed. Medians are not all that instructive in a small, irregular sample like monthly SF home sales. Regardless, they are not irrelevant, and that upward trajectory – really just since mid-2012 – is remarkable.
RE prices doubling over a 5-6 year period has happened many times in SF and the SF metro area in the post-WII era. It certainly happened in SF in the 1995-2001 boom. How many times depends on which index you want to use, but using the Case-Shiller for SF, it has happened every decade at least back to the 1970s. Paragon Realty has a 30-year overview at namelink.
Indeed. An excellent study by Paragon. The 80s had big inflation, which does flatten the increase, but Dot Com Bubble #1 was fairly amazing in its own right.
Now a very relevant metric is the 27% drop from the Great Recession. A 11% drop brings you from 100 to 89, and the doubling will be at 178, but with a 27% drop, you will go from 100 to 73 and the doubling will be at 146.
This means that we could have more increases in the future before we reach the epic proportions of the dot-com bubble.
It would be interesting to see the same data presented with a logarithmic scale, revealing the % change more readily.
A unit in our complex just sold for $725k in May after having sold for $535k in June of 2014. I didn’t see any work being done on it. At the time (2014) I thought the sale price was high. Didn’t expect such a big increase in a year.
I agree with all above comments. The question is if SF will take another hard hit or not. Basically we took our appreciation up front; sort of like a hot growth stock. If appreciation in SF moderates in 15-16, say 3-5%, then that will bode well just as the rest of the county’s RE market and the general economy continues to recover and grow. But if 15-16 sees 10+% appreciation rates, then watch out come tech crash! I personally think the former is happening as the huge gains in 14 are also due to mix (mentioned by editor) of renovated and expanded trophy props selling.
I agree with the ed. this is all terrible news for the bulls – inventory is too high, sales are too low and median is completely the result of home improvements. we’ll never reach 2006 prices again, and people who didn’t listen to SS and bought 2009-2011 made huge financial mistakes.
Aside from the sarcasm, I think what this means is that some people are marketing unimproved properties and asking too much for them, leaving them stuck into inventory. But for places in good shape, demand is extremely strong.
yes and if you point to individual sales that go for much, much more than they did previously, and they’re unimproved yet in terrific shape, then they are merely anecdotes. been there done that
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