Having hit a 9-year high last week, the number of homes on the market in San Francisco which have undergone at least one official price cut has ticked up another 10 percent in the absolute to 330.
As such, there are now over 150 percent more reduced listings on the MLS than there were at the same time last year, six times (6x) more than there were in July of 2015, and the most reduced listings since the fourth quarter of 2011.
On a percentage basis, that’s 24 percent of all listings which have been reduced at least once, which is five (5) full percentage points, or 26 percent, higher than at the same time last year.
And that holds for both single-family homes and condos.
There are now “10 weeks free” concessions popping up on craigslist, and it’s silly with “8 weeks free,” “gift card,” “move-in allowance,” and “pets ok.”. Smaller deposits, too. All I care about is “reduced price,” and those are also increasing.
As we noted earlier this week: Big Landlord Ups the Concession Ante for Signing a New Lease and the week before:Weakness in San Francisco’s Rental Market Is Accelerating.
But the stats above are specific to the ‘for sale’ market and inventory, the value of which are a function of rents.
Nonsense! People are still making money on real estate in San Francisco.
For example, 461 2nd Street #461T (name link) just sold for $1.1M, a gain of $65,000 after commissions and taxes, and about $20K for new cabinet fronts and countertops. That’s almost 7% above what they purchased it for in 2012. See, they made money, almost one percent per year!
The market is strong! 118 homes were purchased last week. A mere 242 homes were listed.
There is some cooling off of the craziness of the market, but it’s nowhere like how some members here like to make it out to be. Some of the buildings have gone up in price and some have stayed the same or gone down (usually the buildings, that looking back were severely overpaid for back then). If you want to cherrypick, there’s an even better example: 750 2nd St #302 – $2.175 mil in 2013 to $2 mil today. But there are also examples like this: 355 1st St #2007 – also appears to have gone through a kitchen renovation, but a healthy gain from $1.21 million in 2013 to $1.594 million today
The kitchen of 355 1st St. #2007 was not renovated between 2013-2020. Moved out of that unit during shelter-in-place because the owners were “moving back to the Bay Area,” so we were surprised to see it was listed and immediately went contingent one week after we vacated. Nice landlords, though.
tipster i’m bearish on condos at this point in time as well but if one were to look at buying a condo (in say soma/mission bay), based on current conditions and outlook, what would be your strategy in terms of timing and price point?
Price to rent was already crazy against buying and now rents are taking a beating. I’d say rent for now. Prices will bottom out 6-9 years from now. Start looking then.
thanks joe, in the present situation i’d definitely rather rent (though not an equivalent unit that i’d otherwise buy) but since the condos are dropping i was wondering at what price it might not be a terrible idea to buy.
Prices will bottom out much sooner than 6-9 years from now. The time to start looking will be in the next year or so.
If you believe the stock market is a forward looking indicator of the overall economy (granted that’s a big “if”), it’s worth noting that during the so-called “financial crisis”-induced recession the U.S. stock market fell about 50 percent and took four years to recover. In March of this year it fell only about 34 percent and has recovered much of that loss already, so I think the actual recovery will take less than four years.
You think the stock market is done bottoming out? I don’t. Long way down ahead. (Bookmark this comment for review on 7/20/2020.)
Any input on there being more price cuts due to sellers listing at a much higher price than normal to take advantage of the perceived shortage? Then as offers aren’t materializing, price cuts abounds
While that’s a yarn we’ve heard spun to rationalize the rise in reductions, the rise is typically a function of properties having been priced for where the market had been (“my/your neighbor got x last year,” or back in 2015…) versus where the market is now. And any perceptions/reports of a “shortage” are simply wrong.
Very good points, thank you
I certainly hope the price will have some meaningful drop so that I would have an opportunity to buy, But I am afraid that might not happen after all. Once the vaccine hope looks to be more realistic and imminent, I think that is where the price will flat out. Not to say price will go back up right away, but price drop will likely stop…
In a way, now might be a better time to buy, when no one knows for sure what is next for COVID
Don’t hold out too much hope for a vaccine. UCSF just terminated their vaccine program to focus on treatments due to recent antibody studies:
“Disturbing new revelations that permanent immunity to the coronavirus may not be possible have jeopardized vaccine development and reinforced a decision by scientists at UCSF and affiliated laboratories to focus exclusively on treatments.
Several recent studies conducted around the world indicate that the human body does not retain the antibodies that build up during infections, meaning there may be no lasting immunity to COVID-19 after people recover.”
This is what people who have decades of bioscience experience trying and failing to make a common cold coronavirus vaccine have been saying all along.
Some viruses such as poliovirus produce an amazing long lasting immune response. Others don’t for reasons that are not completely understood. Some great areas of research into stimulating/augmenting the human immune system. But promising research is very far from a practical treatment and messing with the immune system can have some very serious side effects.
What laypeople don’t get when they see some of this reporting about biomedical research is that the acceptable level of side effects for a vaccine is extremely low. If a patient has a cancer which has a high chance of being fatal and you can amp up their immune system to fight it then any serious side effects are unfortunate but a better outcome then death. But when you are talking about vaccinating the entire US population (maybe once a year or more) where most people are healthy and even those who do catch COVID will most likely have no symptoms then you must have an extremely low incidence of side effects for this to be ethical. And even if you clear the ethical barrier, the public health people will tell you that compliance (the % of people who will take the vaccine) will be seriously hurt with any reports of side effects (which the media will no doubt sensationalize). Look at how much push back there is about simply wearing a mask.
It would be amazing if a safe & effective vaccine materialized quickly. But people who think this is just a matter of waiting 12-18 months for an inevitable vaccine are way off base.
that article from the chronicle should be retracted. UCSF DID NOT withdraw from the vaccine programs. one dept of UCSF is focused on treatment and not vaccines, and one researcher there explained why; the article misleads that immunity is all about antibodies waning. in fact, memory B cells and t cell responses are likely to be more important than antibodies. it is very very common for antibodies to wane in vaccines. the article did a disservice to lay people who do not understand science and immunology.
The chronicle should never publish a story about immunology without interviewing an immunologists. in summary, the chronicle article is horrendous and gets almost everything wrong.
there are 4 vaccines now starting ph 3, and at least 2 now (as reported in today’s lancet) also have very good t cell responses. im reasonably confident that one of these will work in the general population. now we have to worry about safety in a mass population and about efficacy in older people (where titers are often lower).
No reputable immunologist or virologist would agree with the conclusions from the chronicle article and there are several outspoken ones on twitter asking for the chronicle article to be retracted. if you want to educate yourself, suggest reading up on the importance of T cell response and B cell memory response, which is not addressed in the chronicle article.
I personally think we will have positive results by end of year from at least 1 vaccine candidate, with front line HC workers, govt officials and possible most at risk getting it in Q1…but probably wont get to general public until Q2/Q3. and then we will have idiots who wont take it
See the blog of Science magazine.
Of course bad news about antibodies doesn’t guarantee bad news for cellular immunity. But antibodies are more studied and easier to measure. We could get lucky and maybe a sizable fraction of the population is already immune because of cross-reactivity from T cells for other coronavirues. Or we could get unlucky and find that the T cell response is weak and inconsistent.
He breaks down all the cases here:
“(1) it’s just what it looks like, and most people are unprotected because they have so far been unexposed. (2) the antibody results are what they look like – low exposure – but people’s T-cell responses mean that there are actually more people protected than we realize. (3) the antibody results are deceiving, because (as this latest paper seems to show) the antibody response fades over time, meaning that more people have been exposed than it looks like. And that means you can split that into (3a) the antibody response fades, but the T-cell response is still protective and (3b) the antibody response fades and so does the T-cell response. That last one is not a happy possibility.”
People are talking like creating a vaccine is like ordering from Uber Eats, just throw some money at it and it shows up on time. Biomedical research doesn’t work that way. Cellular immunity is less studied than antibody immunity and it is known that T cell effectiveness wanes seriously among the old and sick. Smart people are doing good work, but every attempt has to go through p1-3 trials and then we need to look at long term data for effectiveness. If it doesn’t work, start the whole process over. A lot of work being done in parallel, but it will take a lot of time or a lot of luck.
“So we need to take this new paper and its results about antibody persistence seriously, but we also need to keep our eye on the T-cell situation as well. We’re not going to know the whole picture until we know more about both of those. And in the end, we’re not going to know about the protective effects of recovery from a coronavirus infection, or the protective effects of being vaccinated against it, until enough time has passed in a large population of both cohorts. You’d want a faster, less difficult readout for those things, but I’m just not sure that there is one.”
even without antibody titers, memory B cells are likely to be reactivated on subsequent exposures. I think the findings that Ab titers wane is completely expected and has no predictive value of whether a vaccine will be effective. the immune system is so much more than Ab titers.
im not sure whos thinking about it like UberEats, but the effort is unprecedented and i have a lot more faith in biotech and the financial incentive being provided than anything else. the mix of high titers and t cell responses look very good to me, especially with the Pfizer vaccine. we are lucky that this is a very slowly mutating virus and structure is not that complicated.
safety is the bigger concern in my mind right now. these all have complicated side effect profiles in healthy volunteers with 2 months exposure. will see what 6 month safety data looks like in large groups including elderly and pre-existing conditions. these vaccines are likely to work to some degree. even 50% protection with a booster needed every 6-12 months, while somewhat disappointing, would be a huge advance. there are 14 vaccines in ph 2 and 4 in phase 3. i highly doubt that we will be going back from scratch on all of these.
Like I said a few weeks back…”….the great exodus in SF has begun” . In my part of the world the supply chain shortage is beginning to hit stores. Home Depot, Lowes, Public’s, Target, and Walmart stores are beginning to run out of items and some of their shelves are empty. It’s starting to look like Russia on a good day. I spoke to one guy at a Home Depot and he said they can’t get deliveries and everything you see in the store is from their warehouse’s. When the items are sold that’s it…there is no more stock in the warehouse.
The first wave of homeowners in forbarence is just beginning to hit the lenders. Chain stores like Norstrom is telling it’s landlords to expect to see 50% reduction in rent payments going forward. Mall operators are freaking out.
If you live in a large urban city where mob rule is going unchecked you may want to get out if you can afford to. If you’re a mom with kids you might want to find a place where you feel safer. I hate to sound all doom and gloom but the reality is it’s going to get ugly. And with shortages expect inflation next.
In my part of the world signs are popping up on street corners…..”we sell ammo…9mm & 223 cheap”. You won’t see that in CA.
With all this expect price cuts on condos and homes in SF over the next 60 days or less as reality begins to set in.
Here’s to hoping I’m wrong……
Yes, it’s true that you won’t see signs around California advertising ammunition for cheap. And that’s because since the first week of June, all the doomsday preppers and people overreacting to what they call “rioting” have bought up all the supply and the gun stores have little to no 9mm or 223 rounds to sell.
Same reason stores aren’t putting the 19 oz can of Lysol disinfectant spray that I have been trying to buy for the last three weeks on sale. They don’t have it, so they aren’t going to discount it.
Kind of of topic….but…
Buying Ammo in CA….it ain’t as easy.
See name link……
In my part of the world…..”what kind……how much…..cash only”
“Home Depot, Lowes, Public’s, Target, and Walmart stores are beginning to run out of items and some of their shelves are empty.” Is that because everything they carry is from China and the Chinese have halted manufacturing the goods due to covid19?
What a bunch of weird libertarian wild takes. “I live in rural big box land, and some shelves are bare so I asked a mananger, therefore blah blah Ragnarok blah.” Not havin it. Last time you went this out on a limb you talked a bunch of nonsense regarding restaurant quality. When challenged, you ghosted. Certainly you’ll do so again here. An “ammo” take? For the loss.
“In my part of the world the supply chain shortage is beginning to hit stores”
Interesting. In my part of the world (San Francisco), we’re fine.
Some items yes and some items no. Not everything is from the CC. I asked the same question. The guy at HD said some of the item shortage was due to delivery drivers refusing loads…due to virus. My personal observation……I95 is crowded with trucks in both directions from Fla to NJ….
In related news: Number of Homes for Sale Nearing Recession-Era Levels in S.F.
haha. two thumbs up