With inventory levels in San Francisco having just hit recession-era levels, the number of homes on the market which have undergone at least one official price cut has ticked up another 20 percent in the absolute over the past two weeks to over 400.

As such, there are now nearly 300 percent more reduced listings on the MLS than there were at the same time last year, over eight times (8x) more than there were in July of 2015, and the most reduced listings since the end of 2011.

And on a percentage basis, that’s 28 percent of all active listings which have been reduced at least once, which is ten (10) full percentage points, or 56 percent, higher than at the same time last year, with 24 percent of all listings for single-family homes having been reduced and 29 percent of the listings for condos, none of which should catch any plugged-in readers by surprise.

Comments from Plugged-In Readers

  1. Posted by Carlton Sheets

    2009 was a brutal real estate crash. Today’s is artificial. Never in history has a healthy population been quarantined and at some point the madness will stop, possibly very suddenly. Parents of schoolchildren might be the vanguard of the revolution against this nonsense.

    In 2009, you might have tried printing out the doom and gloom articles from the news and taking them with you to an open house, handing them to the seller, and seeing if he gives you a great deal on a house with a view of the bay, but it didn’t work then and I don’t think it will work now.

    • Posted by Anonoly

      ‘Artificial’. The only thing that’s artificial are the sky high real estate prices goosed up by historically low interest rates. The job losses are not artificial; the lower demand and higher supply of homes is not artificial, the economic damage is not artificial; the huge reduction in rents is not artificial. And if you are under some bizarre trumpian impression that the virus will suddenly miraculously disappear; you are wrong. Other large cities such as NYC have seen a hit, SF will soon follow.

      • Posted by ExSFLandlord

        Is SARS still hanging around? And that Obama era “Swine flu” is that one still hanging around too? Inquiring minds would like to know. If the Democrats weren’t so crazy with TDS our economy would be on the mend.
        Just look at Europe….several countries didn’t lock down and some did….and the outcome for each is about the same. And in case you missed this story “Hygiene Theater Is a Huge Waste of Time” See name for link.
        Hysterics are not helpful.

        • Posted by North Beach

          SARS and H1N1 disappeared thanks to intense human efforts, especially in the case of SARS, where extreme quarantines were quickly enacted. If we had treated CoVID-19 with the same urgency, tens of thousands of people would still be alive in the US alone.

          Ignorance is not helpful.

        • Posted by anon

          Which European countries went along with life as usual and had the same outcomes as everyone else? I’m interested to look at this.

          • Posted by john p downey

            Hey North Beach. I am half Swedish and my aunt is in Stockholm as we speak. In short, NO. Sweden did not lock down and had FAR more deaths (per million) than its equally healthy and affluent Nordic neighbors (Norway/ Denmark) and it’s economy suffered more or less the same amount when measuring GDP contraction. So in short, they regret their actions. Hysterics are not helpful, I agree, but misinformation is dangerous.

          • Posted by North Beach

            @john p downey: I said nothing about Sweden or Europe – my comment was about how ExSFLandlord implied that SARS and H1N1 had disappeared by themselves.

            Were you replying to “ExSF Landlord”? Each post starts with “Posted by “.

        • Posted by Notcom

          Think you may be on to something (tho, typically, not what you were thinking): isn’t TDS really just a mutation of ODS, that scourge that swept the country from 2008-2017 ?? So, miracles being in short supply, pandemics don’t “just disappear”, but they can morph into something benign…even beneficial.

        • Posted by Ohlone Californio

          Anyone who uses TDS is full of it. The damage that ill-considered, incompetent, gut instinct driven, white collar criminal kook has wrought will take years to unwind.

  2. Posted by hstfan

    As with most things in life, the truth lies between these two extremes, and is always more nuanced.

    08/09 was a once-in-a-generation liquidity crisis. This is a once-in-a-generation health crisis. They cannot be compared, no matter how much you’d like to.

    True, we will not see a V-bottom like the 2011-2019 period. We also have a much more bifurcated market today. Condos (think NYC) will be blasted, almost certainly, and that’s largely a function of location i.e. city center. SFH will be hit (down about 10% from peak by my reckoning today), but remember, there are very few forced sales in SF. If prices fall too far, most will just pull their listings and wait it out. This mitigated the worst price declines in the last cycle, and it’s even more true today given how much equity has been created.

    You will always be able to identify one-offs and call them “trends”, but be wary. Also, RRE expectations adjust slowly. The SFH market will bottom late-21, by my thinking, down 15%+ from peak. Condos will probably bottom mid-22, down 25-35%. YRMV

    • Posted by Greg

      Down 15% for SFH is a big deal – good analysis

    • Posted by tipster

      I’m already seeing 28% losses, and this is a long way from being over. Someone just took a serious $750K bath (for a total loss of over $850K) on a 2 bedroom condo.

  3. Posted by Backtotheburbs

    Wait, we are comparing two different eras —w/ and w/o Trump et al at the helm?

    Maybe its simply that low margin/high cost businesses are just not sustainable long term?

    No one mentioned the record equity bubble? Disconnected from value, profit, projections?

    What about WFH in peace and nature vs high cost but utterly nasty end-times urban living?
    Also 12B SF budget and school budget deficit even before pandemic?

    Pandemics happen, some are just more prepared and resilient than others. Resilient here meaning willing to subject to reason and some level of temporary conformity.

    The era of rugged invidualism is abruptly over… and for those hiding out in isolation that is clearly temporary and what’s after?

  4. Posted by Greg

    The forced sellers of this cycle are the owners of these listings who went and purchased outside the city in a panic, and now are holding two homes – two property tax bills, sometimes two mortgages.

  5. Posted by AJ

    It doesn’t take much to move a market. Real estate sales are a lagging indicator. The fact that this is happening so quickly (since the epidemic started in March) tells me that this has much more to go. Bear in mind that 30% of mortgage holders took forbearance the last few months. Some didn’t need to others did. Those that did will be the forced sellers of tomorrow.

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