While home sales in San Francisco are currently running at an 8-year low, the number of properties newly listed for sale over the past week crossed the 300 mark for the first time since 2010 and effectively matched a 13-year high.

As such, the inventory of homes currently listed for sale in San Francisco jumped nearly 50 percent over the past week, as expected, but remains 2 percent below its mark at the same time last year, partially driven by a large number of homes having been withdrawn from the market over the past couple of months having failed to secure a buyer.

Expect inventory levels to continue to climb through October and for the year-over-year delta to soon flip from negative to positive.

Comments from “Plugged-In” Readers

  1. Posted by Dave (Seattle dude)

    Fall is the best time of year to sell, but still there is an outsized increase in listed homes. Prices seem to have peaked and more and more individuals recognize this. So perhaps this is partly driven be people who were planning to sell in the next year or so and figured better sooner than later. There are also 7 rent control bills working their way through the legislature. One would require owners of rentals to rent to Section 8 individuals. Brown vetoed such a bill last year, but Newsom is expected to sign it. This bill would directly target the small time landlord. It applies to individual home and condo rentals. Given that, as well as stalling price gains, I suspect more and more investors are exchanging their rentals for properties outside of California. It is getting late in the game for that, but better late than never.

    • Posted by EBGuy

      Fall is the best time of year to sell
      Mr. Case and Mr. Shiller would disagree, I think. And so would the real estate professionals as “It’s always a good time to buy and/or sell a home”.

      • Posted by Tesla

        You can write-off half a year of depreciation the first year you buy investment property regardless of whether you buy it on January 1 or December 31. It is to your advantage to close the deal in December and take half a year of depreciation.

        • Posted by EBGuy

          I have no idea about the rules that apply to real estate professionals, but as far as I know, the “little people” (aka passive rental income) who would be buying individual homes and condos can only begin deducting depreciation expense once the rental is placed into service. This ain’t no copy machine (see IRS Residential Rental Property GDS table here). YMMV…

  2. Posted by bachman_erlich_overdrive

    This First American Real House Price Index suggests that in valuation terms, we (San Francisco) are 40% below 2007 peak highs (scroll down). Mark with the purple tie and navy shirt can explain the index in a short video on the site.

    With all this inventory and these crazy low prices, we must be in a buyer’s paradise of a market.

    • Posted by two beers

      Prices aren’t “crazy low” until they fall below the historic trend line (i.e. overshooting on mean reversion), and they are nowhere near that.

  3. Posted by tipster

    Lots of price reductions too. Like 1250 Jones PH (see name link) reduced about 20%.

    Apparently the “Thousands of New Millionaires About to Eat San Francisco Alive” all have anorexia.

    • Posted by Ohlone Californio

      Yes that must be it. Your comments are always so very useful when it comes to illustrating what this site is really about. Thank you.

      Also, again, July MLS sales were up YoY in both volume and price.

    • Posted by sparky-b

      maybe they are getting other things. This sold for 34% over in 2 1/2 weeks.

      • Posted by tipster

        “Over” was over “asking”. Sold price was $945/sqft, which is the going rate for that area, indicating that the asking price was 34% low.

        • Posted by sparky-b

          C’mon man. a $15m condo dropping it’s price by 20% while still being the highest $/ft. in the area is telling to the market and was properly priced the first time but the market is down. While mine is the 5th highest price house in the area ever by foot (your metric) over $2.5m. There are 12 houses to ever sell over $2.5m and they are all within the last two years. So no they didn’t under price the house to bid it up, they knew people are paying a lot for houses they just didn’t know how much. Pricing houses to sell is hard right now. If you take your thought and project it on Bernal for example it’s then; Houses are all getting $1350/ft, so we should expect 133 Elsie which came out at $3.0m but is 3046ft to get $4.1m. Any sale in the high threes is actually further proof the market is way down.

          • Posted by SocketSite

            Keep in mind that the West Portal home on 14th Avenue, which included an in-law or income producing unit with a separate entrance and additional room to expand, and certainly wasn’t a fixer, was listed at “$705 per square foot.”

            At the same time, the average sale price for a West Portal home measuring at least 2,000 square feet has been closer to $940 per square foot over the past year.

            And with that in mind, you honestly don’t believe or understand that the above-average home on 14th was intentionally under priced to present under the $2 million mark?

          • Posted by Ohlone Californio

            Since we’re parsing things, parse what that in-law really means and parse what the expansion footage really is on that one. Meanwhile, your radio silence regarding the absurd Jones st ph cherry pick and who you do and don’t feel the need to address on here is of course duly noted. It goes something like, say something outlandish that is bearish, totally fine, continue on everyone. Say something argumentative and bullish, hold the phones, the editor talks to directly you. Is that right?

          • Posted by SocketSite

            Interestingly enough, despite having been listed for $16 million back in March, the penthouse atop 1250 Jones has now officially been on the market for “3” days with an “original list price,” a sale at which would now be considered to be “at asking,” of $12.9 million, at least according to MLS-based stats and reports.

            In addition, there have been a whole host of rather dramatic price cuts for truly luxury properties in San Francisco over the past couple of weeks (which typically isn’t a sign of a strengthening market but does speak to a broad change in expectations despite ongoing PR to the contrary).

          • Posted by Ohlone Californio

            I see. Also, “over asking” is not a thing but “under asking” is very significant. I forgot about that one.

          • Posted by SocketSite

            While we realize you were aiming for “snark,” it would be a bit surprising if you didn’t actually understand the difference in significance between an increase in price reductions versus “over asking” sales.

          • Posted by flotsom j. jetson

            “I see. Also, “over asking” is not a thing but “under asking” is very significant. I forgot about that one.”
            Yes, because agents intentionally under price properties to try and create interest and to juice their stats. But “under asking” is either a mistake or a market change.

          • Posted by Ohlone Californio

            “Yes, because agents intentionally under price properties to try and create interest and to juice their stats. But “under asking” is either a mistake or a market change.”

            See, but that’s the thing. Neither of these are always the case and the editor knows that all too well. Yet on here, under asking is a thing and over asking is not.

          • Posted by SocketSite

            Actually, what our editors know…is that there are always exceptions. But in general, “agents intentionally under price properties to try and create interest and to juice their stats” while “over pricing” is typically avoided, except when pitching sellers for a listing, and reductions are more likely to represent a change in expectations or the market itself.

          • Posted by Ohlone Californio

            ” it would be a bit surprising if you didn’t actually understand the difference in significance between an increase in price reductions versus “over asking” sales.”

            Ineed. An increase in price reductions as criteria, meaning that the initial price ask was not a teaser price but a real price? Well you’ve just given the lie to the over asking as nothing meme. Thank you for agreeing with me. Now how about implementing some editorial control over same?

          • Posted by Ohlone Californio

            Sorry, last one … but I have to say “juice their stats” is also unintentionally comedic. Like people sit around and make spreadsheets of who has gotten the most over asking sales and hire accordingly? I don’t think so. As you say, there are exceptions to everything but “juice .. stats” ? I actually laughed. It’s a thought that comes from a place which is nothing to do with real estate other than to look at real estate websites for kicks.

          • Posted by Jeremy Wilkins

            Does “Ohlone Californio” translate to “I’m wrong about everything I post on the Internet” in some language?

            “As top-10 ranked real estate agents, we know exactly what it takes to get your home sold. Currently, our average list-to-sale price is 117% versus the 107% city average. If you were selling your home for two million dollars that would mean that we would get you $340,000 over list price while most Realtors would only get you $140,000 over list price. That translates to a difference of $200,000 more in your pocket.”

            Spot the Huge graph of “Sales Price to Original List Price San Francisco Residential Property” on the right.

          • Posted by Ohlone Californio

            Oh, did someone say something that differed from what I said? Hmm. How about that? But no that is not what Ohlone Californio “translates” to, bad writer.

          • Posted by sparky-b

            okay so here are some examples of what I am talking about: 143 Laidley,
            1783 Noe; 80 Laidley; 38 Liberty

            all these houses sold for under asking. Yet they were still some of the highest prices ever in their areas. Why under asking, because the range of pricing options for the owner and agents were swinging by millions of dollars. If the $10m house came out at $8m it still would have been the highest by a lot. They may have thought it was worth $9m really. But any price would have looked like it was aspirational. I guarantee they are very happy with the price they got, and I am sure the agents are promoting selling the most expensive house ever and could care less it was under asking.

          • Posted by SocketSite

            None of which were reduced, only one of which traded this year and which together sold for within 4 percent of their list prices, perhaps suggesting they were priced to the market at the time (versus being listed at 33.5 percent below recent comps and then selling for “34% over in 2 1/2 weeks”).

  4. Posted by NA

    Folks listing at different times than last year, still 2% lower than last year. See if the trend continues to surpass inventory levels YoY..

  5. Posted by Sabbie

    This weeks headlines: “Home Sales in San Francisco Remain at an 8-Year Low” and “Listing Activity Hits a 13-Year High in San Francisco”. Any econ majors want to take a stab at this one?

    • Posted by two beers

      Considering that neo-classical macro is a pseudo-science, I suppose the econ-major readership might currently be consulting the magic 8-ball: “outlook not so good”…

  6. Posted by Gm

    If China eases up on transfers of currency out of the country as part of the trade deal, this will reverse

    • Posted by two beers

      So, you’re saying this is a market bubble that has been fueled in part by speculation pushing prices up at the margin far beyond what endogenous end-user demand would have otherwise done?

    • Posted by SFRealist

      You think there’s going to be a trade deal?

      Why would we agree to a deal when we’re winning the trade war?

    • Posted by wilson

      China is cracking down on outward currency transfers because their economy is getting shaky and they want to slow down capital flight. Trade deal or not, this is only going to get worse.

    • Posted by tipster

      The good news is that China removed their currency controls! The bad news is it only applies to currency flowing IN to China, not out (see name link). They are apparently getting more desperate for currency, not less, so I wouldn’t be counting on more Chinese outflows propping up SF real estate.

  7. Posted by anon

    “winning”

  8. Posted by SocketSite

    Speaking of August sales in San Francisco, they were the lowest in over 15 years.

    And yes, the current pace of sales in the city is still down as well.

    • Posted by Ohlone Californio

      As I said August would be, three weeks ago ^, unlike April, May and July, which were up.

      It looks like SFRs are only 59 fewer sales 1/1/19 – 9/2719 vs 1/118 – 9/27/18. And late fall of 2018 was very slow. I wonder what the take will be when 2019 surpasses 2018 in sales … probably the language will focus on the percentage being less than other year over year gains or something.

      • Posted by SocketSite

        Actually, only April and May were up on a year-over-year basis, an average of 2.8 percent. The other six months have been down an average of over 11 percent (which is why year-to-date sales are actually down over 7 percent).

        • Posted by Ohlone Californio

          Oh yeah, regarding July, single family home sales were up year over year. Condos were down.

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