44 Percent More Homes on the Market in SF, Sales Still DownNovember 20, 2018
Having peaked at a 7-year high in the absolute last month, the inventory of homes actively listed for sale in San Francisco (870) has dropped 10 percent with typical seasonality in play but is now 44 percent higher versus the same time last year and remains at a 7-year seasonal high.
At a more granular level, the number of single-family homes currently listed for sale in the city (290) is now running 46 percent higher on a year-over-year basis while the number of listed condominiums (580) is up 44 percent, not including the vast majority of new construction condos still for sale across the city.
At the same time, having hit a two-year high last month, the number of homes on the market priced at under a million dollars in San Francisco is now running 46 percent higher versus the same time last year while 26 percent of the homes currently listed for sale have undergone at least one price reduction (which is actually 1 percent lower versus the same time last year) and the number of homes in contract is down an average of 10 percent on a year-over-year basis since the beginning of November.
Expect inventory levels to continue to decline though the end of December, at least in the absolute, and the percentage of listings with a price cut, which topped out at 27 percent in San Francisco last year, to continue to tick up.
Comments from Plugged-In Readers
I’ll be in the market for a “low-end” condo (sub-$1 million) in southern Marin when the home-selling season gets started next year. Based on my market research over the past 6 months, as well as commentary here, it seems like this isn’t the time to be bidding aggressively despite the scarcity of decent quality product in that price range.
It will be interesting to see how things shape-up next year.
It’ll be a buyers market up there
These might be warning signs, but we won’t have clear a clear data point until spring time when sales pick up.
The fall is just too volatile due seasonally low inventory and transaction volume.
Luckily, we’re tracking 143 months of data and the longer term trend, the early signs for which didn’t “just appear” over the past couple of months or even quarters.
RSU wealth has taken a beating, no surprise with regards to market softness
Even with all the recent market turmoil, the Dow Jones average is up 38% in the last 2 years since Trump was elected.
It doesn’t matter the market was up yesterday. A lot of people count on monthly vesting of RSUs as part of their income towards land rent (i.e. housing costs). And market movement downwards will also impart pressure on the total amount available for land rent. But more importantly if the market trends downwards that is sign of weakness in bottom-line which then also means reduced ability (or in some cases inability) to borrow for expansion. The problem with being unable to expand and contracting bottom-lines also means no growth in wages. And if we contrast no-growth in wages against inflation .. there would be further pressure on available income towards land rent. What I am trying to say is .. this party maybe coming to an end.
RSU’s don’t vest monthly. They vest annually at best (grants generally vest over 3 or 5 year blocks). RSU’s have been a large factor bloating up incomes the past few years North of 200k at big firms.
That money is currently in the process of getting wiped out. That means lots of “high income” “qualified” buyers now make no so much income any more.
Some vest monthly after a 1-3 year “cliff” vesting period.
Vested RSUs are taxed annually, but they can be structured to vest annually, bi-annually, quarterly or monthly. And if you are lucky enough even bi-monthly And in some cases a hybrid where a certain percentage vests annually and beyond that a fractional percentage that has a different vesting schedule. So on and so forth. The vesting schedule itself is arbitrary and at the discretion of the grantor. It is essentially an award of equity structured in a manner to provide incentive for the employee to stay with the grantor/employer. But of course the employer can always override un-vested RSUs by implementing “structured reductions in workforce”. As this party slows down/draws to an end .. expect more layoffs.
Comments are closed.