While the number of homes on the market in San Francisco has ticked up to a six-month high, the number of properties in contract across the city (i.e., pending home sales) has ticked down to a four-month low, having dropped 25 percent since mid-April.

At the same time, the average list price of the homes which are currently in contract has ticked down to around $960 per square foot, which is 6 percent lower than at the same time last year ($1,025 per square foot).

And while there are still 40 percent more homes in contract than there were at the same time last year, that’s down from an average of 55 percent more, on a year-over-year basis, last month and 70 percent more, on a year-over-year basis, in April.

Comments from Plugged-In Readers

  1. Posted by Jerrym

    Your ability to spin a white hot market to negative is fantastic.

    • Posted by WiseGuy

      That’s all that SS does. I’ve been following this site for years and all they do is cherry pick info that makes SF look like its crashing. Newsflash SS, when every listing you pick as a comparable sale from the peak of the market in 2015, it’ll always look like no one makes money in SF real estate.

      • Posted by SocketSite

        As always, we don’t “cherry pick” the sales we feature on the site nor do we go looking for sales that result in losses (or gains, as the case(s) may be).

      • Posted by wilson

        But are there homes in the Berkley hills or Marin that are going for 2015 pricing? Back in the truly white hot SF market of 2007, were there homes that were selling at their 2001 pricing? Is there really enough variation in apples to apples appreciation for a given property type in a given neighborhood at any one time to even allow for the cherry picking that you allege?

        Conversely, it seems that much (if not most) of the times someone posts a property here with apparent appreciation that “debunks” the set of apples, it turns out that the property in question has actually been renovated. And people often seem to get duped by the practice of low-ball listing prices going for “over asking” and mistake this for actual appreciation. ( “My friend’s condo in the Castro just sold for 500k over asking.“)

        My gut feel is that the mental errors people make in using remodeled properties and “over asking” sales to infer appreciation are much larger and more common then any distortions that could even be made by cherry picking sales.

        • Posted by wilson

          And I think this is particularly true for markets such as SF and NYC.

          If you think about it, a property’s value is partly land/location and partly the physical structure. In places such as SF and NYC, the land/location value is the dominant factor. How much would some of these SF homes be worth if they were located in the desert on the outskirts of Las Vegas? Just a small fraction of their value in SF. So if most of the value is in the location, why would you expect much variation in the appreciation of two nearby properties?

          In the Las Vegas desert or flyover country where land is cheap and plentiful, I can see things being reversed. If most of the value of a property is contained in the physical structure, and one house has been very well maintained since 2015 while the house next door has been let go to ruin, then it makes perfect sense that the apples to apples appreciation of the two houses would be very different.

        • Posted by Ohlone Californio

          Indeed. What is more truly white hot about 2007 as compared to this year to date?

          • Posted by SocketSite

            While volumes are still up, driven by a backlog of transactions, the average sale price per square foot over the past year has dropped under $1,000 per square foot and is down over 5 percent versus the 12 months prior (which wasn’t the trend circa 2007).

            [Editor’s Note: Please see correction below.]

          • Posted by Ohlone Californio

            A “backlog of transactions” is defined by SS, and measured by SS, precisely how year over year?

            Anyway, going back over the past 12 months SF SFR, condo and TIC sales looks like something a real estate website might want to address. Because 7/7/20 – 7/7/21 shows 7006 sales. The previous 7/7/19 – 7/7/20 shows 4441. And 7/7/06 – 7/7/07 shows 5883. These differences are stark. From where does the “backlog” term derive? Both this past 12 months and the previous contained covid lockdown periods.

            And indeed, per the MLS, 7/7/20 – 7/7/21 shows an average $/ft sales price of $1056/ft. The previous 12 months shows $1066/ft. Yes, $11 a foot higher. But that’s not what you said, one, and it’s 2600+ fewer transactions as well. (You’d parse that into oblivion as “mix” if it showed the reverse.)

            Sure looks like you’re inventing ways to not talk about this market.

          • Posted by SocketSite

            We screwed up. The average sale price per square foot over the past year in “white hot” San Francisco was actually down 2 percent versus the 12 months prior to around $1,035 per square foot.

            The differences in sales volumes between 2020 and 2021 should be stark, considering the market was either shutdown or restricted for the majority of 2020, pushing listings and sales that were earmarked for 2020 into the current year, as evidenced by listing activity, inventory levels and sale trends.

            Which brings us back to the metric and market at hand: a drop in pending sales, both in the absolute and relatively.

          • Posted by Ohlone Californio

            It’s stark compated to “white hot” 2007’s volume as well as I clearly wrote. And again, the 2 percent down dollars per feet in a context of 2600 plus more sales is not indicative of anything except all time high price stability.

          • Posted by SocketSite

            Once again, the spike in sales this year was effectively an artifact of the market being shutdown or restricted last year, which pushed activity that would have occurred in 2020 into 2021, as evidenced by listing activity, inventory levels and sale trends. And while one could interpret a 2 percent drop as “stability,” it’s not exactly “white hot” or even simply up, nor is it measured on an apples-to-apples basis.

          • Posted by Ohlone Californio

            If someone wanted to they could very much say “white hot” is equivalent to “all time high volume plus stability at all time high price” if they so choose. It’s metaphorical after all. And once again, 7/7-20 – 7/7/21 also contained severe market restrictions and a lockdown period. You’re twisting yourself into knot after knot trying to equivocate and parse what this market has been doing right out of meaning, and it’s comical.

          • Posted by SocketSite

            No twisting, equivocating nor parsing necessary on our part, it’s simply data and analysis, sans any “white hot” spin. Which once again brings us back to the drop in pending sales activity, which started to rebound in July (7) of 2020 having cratered in the second quarter of last year (which is when the vast majority of the 7/8/19 – 7/7/20 period sales were lost and subsequently (7/8/20 – 7/7/21) found).

          • Posted by Ohlone Californio

            To be clear, I challenged someone else’s use of “white hot” re 2007 vs now. Instead of challenging that usage of the term, you challenged me.

            Your subsequent explanatory take is that there was a backlog, a latent interest and stalled out purchase demographic from the lockdown period. And that that is what’s responsible for the massive spike in volume over the course of an entire year subsequent 7/7/20 – 7/721? Never mind there was another shut down, that’s your take. Well OK. But not for a whole year, and counting.

            Don’t get me wrong it is a factor. But it’s not completely borne out by three months spring purchase averages year over year. The difference is more drastic than those numbers indicate. You’ve got to factor the fed’s injection of liquidity, interest rates, the emergence of the millennials as mid 30 something buyers, the fact that many buyers saved money for a year they might not have otherwise saved, etc. Hell, cabin fever and the desire for outdoor space of one’s own. San Francisco’s ineptitude regarding myriad governmental and bureaucratic factors. The list goes on.

            As to the topic of this thread, a singular year over year is always going to be very distorted right now. Going back further in time is a bit more instructive, as I did re 2007. And even just looking at May and June sales back over time, this year is twice as much as other vaunted “hot” markets. As to pendings? Right now? And a “four month low” ? Is it not the typical seasonal slow down time right now? Couple that with the very real aspect of people not being able to travel for a year.

    • Posted by SocketSite

      This certainly isn’t a site for those who can’t handle unvarnished data and analysis, sans “white hot” spin.

    • Posted by anon

      Why do people get upset? I get why r/e agents might be upset because the NAR would ideally like to control every bit of the narrative and every piece of info out there. When there is a down apple, others can post up apples and put it to the community to see whether or not it was a true apples-to-apples comparison. They can say it’s the layout or we’re ignoring aging or design depreciation, or it’s dark, or it’s on the wrong block or whatever. But most people not in the business still do appreciate apples-to-apples comparisons. SS has listed up apples as well. I’d like to see up apples and people are welcome to post them. While SF r/e has done extremely well, it would be interesting to see that appreciation over time ex- the money spent on improvements and compare it to other areas and other investments.

      I don’t think SF r/e is coming apart nor do I think it is white hot- especially compared to other r/e markets around the US and world and other investments. We are in the late rounds of experimental stimulus which has eliminated risk premia in all markets. When it seems absolutely crazy- meme stocks, Dogecoin the joke, a single pixel selling for $1.3mm … then we prob have another couple of years to go.

      • Posted by two beers

        “It’s always a good time to buy pixels!”

        • Posted by The Milkshake of Despair

          “It’s always a good time to buy or sell pixels!”

  2. Posted by Realtor

    It is hardly crashing. Just very low inventory. Sellers are deciding not to list, nearly any and all new construction is condominiums. Many of those new condo units are not listed on the MLS.

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