New Condo Sales Were 25 Percent Lower in San Francisco Last YearJanuary 12, 2017
While the number of purchase contracts signed for new condominiums in San Francisco ticked up from 32 in November to 55 last month, which was double the number signed in December 2015, the number of contracts signed in 2016 totaled 702 which was a quarter fewer than the 940 signed the year before.
At the same time, the inventory of available units to purchase was an average of 45 percent higher on a year-over-year basis over the past twelve months and currently totals 1,000, which is 76 percent higher versus the same time last year, according to sales data from The Mark Company.
And having slipped 2.8 percent in December, the Mark Company’s pricing index for new construction condos in San Francisco is currently running 2.2 percent lower on a year-over-year basis and has dropped 12.0 percent from its August 2015 peak.
Comments from Plugged-In Readers
In what buildings are the 1,000 condos available for sale?
What’s the composition of that offering by location?
Isn’t this more a result of fewer new condos being completed and coming to market?
[Editor’s Note: No. See the paragraph about inventory above.]
This only includes data from developments that are marketed by the Mark Company correct?
That’s incorrect. The sales and inventory data above include all new developments in San Francisco.
Yet the quoted number is curiously an even 1000, the same number that has been quoted here for months, suggesting imprecision at best, guesswork as likely. Is the real number lower? Higher?
Where are these 1,000 unsold units? Unbuilt on Treasure Island?
The “precise” number is 1,003. Add 55 and you’re at the 1,058 we quoted last month. Add another 32 and you’re at the 1,090 we quoted two months ago. And every one of the aforementioned units is either ready for occupancy or close to being completed.
Sure, close to being completed. 199 of Mark’s total is the One Mission Bay. Is construction there close to being done? I don’t drive by it but Streetview from Nov 2016 has exterior sheetrock applied but no windows. Maybe the buildings are mostly occupied now.
Include the HP Shipyards, Park Lane, 800 Summit, and call them condos. I’m probably just quibbling.
Change the numbers whenever it suits you. You started with ‘roughly’ 1,200 back in July, so I suppose it’s your party anyway. Can’t wait to see how the market feels next month.
That’s an impressive pivot from “the same number…has been quoted here for months,” which is incorrect, to “[y]ou started with ‘roughly’ 1,200 back in July” (since which time some units have sold while others have newly hit the market); and from implying that the inventory counts could include units that have yet to be permitted…to quibbling over what ‘nearly complete’ means (in a development cycle that’s measured in years).
That being said, the slow velocity of sales could be confusing to some considering what you read in the papers. And a focus on the trivial does distract from the bigger picture and trends at hand.
A pivot indeed. I had to go and do my own primary research from the Mark Company’s trend report. I was reminded that they are including TIC and SFR projects in their data, that the actual quantifiable units for sale in their data number less than 750 (even including the TIC/SFR data) and that a number of those units that you call “new construction” are actually “under construction.” At least you motivated me to answer my own question, so thanks.
You’re welcome, but you might want to keep digging as your primary research appears to be confusing a highlighted list of projects with the full data set. And yes, developers start selling units before they’re completed, the demand for which, as measured by contract signings, is apples-to-apples in our compilation above.
And you still haven’t provided location of the 1000 or 1003 or whatever number you want to call it, locations that comprise your quoted, “Available For Sale” (not to be confused with empty for-sale condos). Maybe next time you should mine the “Make Me Move” feature on Zillow after your screen-capture Red fin. It would certainly support the narrative.
jeez socketsite never even lists any doom and gloom that is/would be completely warranted from economists that predicted 2008 crash, and people still try to nit pick. Uh, it’s over, and this worldwide central bank fueled bubble is going to send us working people to hell, while the speculators keep thinking that a ‘put’ by Yellen or whomever will keep it going.
7 years of near zero interest rates, and the Fed Reserve and Treasury pumping $12 trillion into this, had it’s great effect of a bubble. But the makers and the profiteers, think it can go on forever. Nope. It’s toast. So glad so many made so much profit out of destroying working class neighborhoods for quick profit. 30.000 working class and middle class people forced out of the city. Cuz, profit. Thanks.
Final 2016 MLS numbers don’t show any gloom. House sales volume was up a few percent from 2015 with median prices also up a few percent. Condos were flat for sales and medians compared to 2015. No surprise condos see a bit more pressure with all the new building. So sky high pricing remains, but it seems to have flattened. Up a little for houses. No bargains. But also not a good time to buy unless you are in it for the long haul. Good time to sell if you have flexibility on timing.
As opposed to the pricing index referenced above, which is intended to measure actual changes in values, movements in the median sale price are not a good measure of actual appreciation but do provide insight into what’s selling.
And of course, MLS-based stats don’t include the vast majority of new construction sales, the movements of which tend to be leading indicators.
Right, a private “index” that has no transparency at all, and which is limited to new condos (coincidentally, which the index publisher sells) is a far more reliable indicator of the market than the broader, fully transparent, MLS. Thanks for clearing that up.
And a link to a 2009 article that discusses short term changes in medians with small samples – rather than full year data with sample sizes of thousands – which is much more significant? Not worth much.
I think it is likely a more reliable indicator of the new condo market than the MLS. I don’t see anything above to indicate that this post was making any judgments about the broader market.
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