Most Sub-Million Dollar Homes on the Market in SF since 2012September 19, 2016
With a hundred more new listings than offers written over the past week, the overall inventory of homes actively listed for sale in San Francisco ticked up another 13 percent to 870, which is 26 percent higher than at the same time last year and the most inventory since the end of 2011.
And the number of homes listed for under a million dollars (371) in the city is the highest since the fourth quarter of 2012.
At the same time, the percentage of listings for which the asking price has been reduced is running at 17 percent, ten points higher than at the same time last year. And in the absolute, the number of actively reduced listings (147) is three times higher.
The inventory numbers above do not include the vast majority of unlisted new construction condos on the market in sales offices across town, the inventory of which is currently running a little under 1,100 versus closer to 700 at the same time last year.
Comments from Plugged-In Readers
What is the price per square foot for homes listed under a million now vs. the PPSF for homes under a million in 2012?
Here’s a home for ‘only’ $449K, but you only get 353sf, or $1,272psf: 625 Divis, #6, MLS 448413
Still plenty of heat in the marketplace. I’d like to see the stats for houses listed under 1 mil. that sell for more than 1 mil.
Anecdotal but, on a recent mortgage show, they spoke of US real estate markets and the “hottest” such in terms of appreciation over the past year. Seattle, Portland, Denver, Austin and Pittsburgh (I believe that was the 5th metro area mentioned) are leading the pack.
Portland and Seattle were briefly zeroed in on and people fleeing the pricey Bay Area was identified as one factor behind the large appreciation in those markets.
Could be that paying more than a million for some of the less than stellar SF housing stock, much of the Sunset for instance, is running into some push back.
The people who are happy to pay these prices right now are the people who are desperate for somewhere to put their idle cash, and are thinking that the strong local economy will keep high rents propped up for years to come. I suspect they are in for a rude awakening, as we are reaching the short term limits of debt based growth, and possibly even long term limits.
I’m not one who believes in a large fall-off in prices here. Just a leveling off as other markets such as Seattle and Portland close some of the gap. As an investor I have made that bet by purchasing homes in the NW in recent years.
I think there is a limit of sorts as to what many folks will pay to live in the outer Sunset in what is really poor housing stock by certain standards. Or the outer Mission. And other areas.
Sabbie, as I mentioned in another thread, you should learn what constitutes a cash purchase and what does not. You can take a loan out and make a million dollar cash purchase with that loan, and have assets of less than 1m. It’s common. And you clearly don’t know enough people with several hundred K of savings in the bank, 250k, 3050, 400k income, plus a down payment. Wish I was one of them. There are tons.
Around 2014 there were lots of people taking out cash loans to make offers, the market is not that competitive today.
Also, your idea that there are plenty of people with several thousand dollars in the bank gives less support your theory that new jobs are driving up these home prices, and more support to my thesis that it’s deep pocketed buyers looking for safe haven and return.
Young techies can make low 6 figure salaries but, as with millennials generally, they are marrying later. So many, most have a single income on which to qualify for a loan and most are not trust babies or have not won the IPO lottery and don’t have hundreds of thousands of dollars to plunk down on a home which it takes here in SF.
I know a lot of such folk renting illegal in law units or just a spare downstairs bedroom in a home. They are all over my neighborhood.
They are not able to purchase a home here. As much as they may like the lifestyle many I know have transferred out of the area or are trying to.
Most, many techies are as much up the creek as non-techies here when it comes to trying to buy that first home.
Oakland is still more or less on fire in SFR’s. Listings @ $399 selling for $550, etc. etc.
Well, it really depends if the definition of fire relates to volume of sales over ask, or volume where agents are pricing listings below market value
Does someone really keep track of number of offers written?
How could one possibly? There’s no central repository. Editor probably means offers accepted.
Portland and Seattle going up due to outflow from CA has been the case from the beginning of time, or at least since the 1970’s.
Another contributing factor (while not the only explanation of course) is bringing out new homes into the unit-pricing data pool that previously were consolidated in multi-units. By this, I mean TIC’s. There are a couple of recent listings in the Richmond at 162 19th Ave that are sub million, (and frankly seem under-priced to me). Also 586 41st Ave.
This is a great dynamic for buyers wanting to own property in SF, and bumps up the (sub $1mm) listing pool. But the presence of these remodeled TIC’s would also seem to show the strength of the market when the ‘buy by the yard / sell by the inch’ trade is working, less than an over-supplied market.
Again, the small number of TIC’s mean this impact is at the margin, but when the absolute inventory is so small, even a few listings more or less tend to swing the % changes dramatically.
Interesting theory, but overall inventory is up as well as sub $1M inventory.
Paragon RE seems like a good source of data these days. Their historic charts let one view inventory numbers in perspective. There’s an uptrend, but nothing drastic. A few more condos than last year. More TIC’s. Fewer SFR’s than last year, looking August to August.
While Paragon certainly excels at PowerPoint and producing charts, their underlying analytics aren’t particularly strong and can often times be misleading.
For example, while simply charting inventory counts “at the end of the month” certainly paints a clear picture of seasonality, failing to properly adjust for the weekly fluctuations in listing activity inherent to San Francisco’s market – which can result in 20 (plus) percent shifts in inventory levels simply depending upon the day of the week and time of the day the counts are conducted – could easily lead one to believe that inventory levels in the city are running flat as compared to the same time last year.
But in actuality, inventory levels are currently running around 30 percent higher, for both condos and single-family homes, a delta which was even higher at the end of August (if properly measured).
“And in the absolute, the number of actively reduced listings (147) is three times higher.”
You have to assume that most people are guided by their agents as to pricing strategy. And why would you see such capitulation if the only thing going on was a slight uptrend in inventory?
Comments are closed.