CFAH

Having dropped to its lowest level in five years last week, the average price per square foot of the homes which are in contract in San Francisco, which is a leading indicator, has since ticked down another two (2) percent to under $840 per square foot, which is 17 percent lower than seven months ago. At the same time, the “stickiness” of list prices has slipped, albeit at a slower pace, with the average asking price per square foot in San Francisco having dropped 6 percent over the past seven months and trending down.

Comments from Plugged-In Readers

  1. Posted by Panhandle Pro

    Slightly tangental, but I’m surprised that price per square foot is not the first metric people talk about when discussing value or price changes. It’s closer to a true apples to apples comparison. In particular, there is no mention at all of price per square foot when it comes to rentals. A one bedroom in SF is likely far lower than Manhattan in PPSF.

  2. Posted by Fred Mack

    We’re halfway there

    • Posted by Ohone Californio

      Huh. This doesn’t have too much to do with the things I’ve talked about recently, as the contexts and indices are different. Nor does it have much to do with the way I used the term stickiness previously.

      But here’s an idea for you if you truly want to learn about this stuff. Why don’t you cut and paste all the various properties that are pending, and put them into a spreadsheet? then revisit them later to see whether they’re in keeping with what would seem to be your takeaway? Me, I’m not willing to put the cart in front of the horse here, as overbidding is still a thing in this market. By the looks of the ones that are actually “pending,” and not just contingent, plenty of them weren’t on the market very long. A few days here. A week or two there. That’s how the days of the market looked to me at a glance. Makes me think over asking sales prices are going to be in this mix.

      So where does that leave the 17%, then? Nowhere worth talking about. But the fact that your comment got to stand is kind of humorous, and typical.

      • Posted by What A Town

        But surely a 17% drop in contract price per sqft is worth talking about? Will a lot of people be in negative equity if we get to 21%? Is that worth talking about considering more tech layoffs are on the way?

        • Posted by Ohone Californio

          I don’t know. I don’t rate much around here other than laudable new construction content and consistent editorial bias. Where are the statistics going back in time showing contract $/ft ? I think it’s all pretty new and I think this editor is making an error in the attempt to use the commercial real estate term expectation bias here.

          • Posted by Ohlone Californio

            And by the way, in case you’re wondering about the language in my earlier response, What a Town, I was individually, and incorrectly, as it was a different subject, called out by the poster Fred Mack. The editor saw fit to change language around and leave part of the dialog standing for some reason. Now it doesn’t make much sense.

  3. Posted by Realtor

    Realtor here. It is a strange market to navigate. There are different demand functions at different price levels…even in the same neighborhood. Take the Sunset as a fairly average bellwether. An average 1100 square foot house in average condition, no tenants, normal size lot, priced at or below RECENT comps will have more than one or two real qualified buyers. However the premium over $2m part of the Sunset market is quite a bit slower. Less affordable given rates. Less buyers, some selling under asking.

    In past dips or market adjustments buyers tend to act similarly and flock to the best value propositions. Those can have many offers if obviously priced low. The also ran properties or those priced too high sit. Then it is up to motivation for those owners. You will see less stickiness if there is true motivation.

    Those with a 3.25% mortgage that would like to sell for a cherry price for a non cherry house will be sticky in their asking forever.

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