Having dropped to a six-year low in the absolute last month, the net number of homes in contract to be sold across San Francisco has since “jumped nearly 50 percent,” driven by typical seasonality.

That being said, pending sales are still down over 30 percent on a year-over-year basis in San Francisco and remain at their lowest level in over six years on a seasonally adjusted basis.

And while the average price of the homes which are in contract has ticked back up to around $925 per square foot, it’s still 7 percent lower than at the same time last year and 9 percent lower than last May.

14 thoughts on “Pending Home Sales in S.F. “Jump” From a 6-Year Low”
  1. So, compared to just a month ago, pending sales are up 50% and avg price per sf of homes in contract, which has been touted as a leading indicator, is up 10%. Sure sounds bullish.

    1. Maybe, in the short term. You have people who were on the sidelines waiting for mortgage rates to top out and others who need to buy a home and perhaps have been fooled into thinking the temporary decline in mortgage rates in the final quarter of 2022 was a reprieve.

      The yield on the 10-year U.S. Treasury bond was up by 10 basis points to 3.632 percent today, marking the first time it rose above 3.6 percent since the 11th of last month. When the decline in The Fed funds rate that the bond market had been pricing in for later this year fails to materialize, mortgage rates will go back up and buying during the first quarter of 2023 will look smart in hindsight (unless we have a large decline in the overall price level later this year).

      1. Wild times with mortgage rates. Extremely hot jobs data on Friday definitely moved the needle by a couple of months on when we’ll see more declines. Still about a full point below the highs a few months ago. So rates are tailwinds but now very gentle ones. But the economy, jobs, and stock market are still very hot. Bigger tailwinds for housing there.

        We had the pandemic which brought huge supply chain disruptions (and thus inflation) and trillions of dollars of government cash doled out (lots more inflation) then the Ukraine war (more inflation). The Fed moves have pretty much tackled the inflation from those hits, and they’ve otherwise unwound regardless. Now we just have a traditional very hot economy – not a bad thing! – that the Fed is keeping an eye on. But that can turn pretty quickly and predictably, unlike the earlier shocks, and Fed moves can turn quickly to adjust. We’re now back to textbook economics rather than panic mode. Market is still betting on lower long-term rates, including mortgage rates, later this year. Those in the housing market waiting for “the bottom” may well have already missed it. But predictions are hard, especially about the future . . .

      2. This response right is here why the San Francisco RE shell game is teetering. Valuation is not supported by productivity and demand – it is in fact supported by excess (cheap) liquidity searching for quick yield. The problem with San Francisco RE shell game now, is the barrier to entry has gotten very high and returns are neither as quick nor as sizeable.

  2. What are some of the addresses of the 10 lowest PPSF transactions in the current dataset being analysed?

    What are the low price properties that are selling?

  3. Well, the average $/ft for the 31 sales in the first week of February is $1123.65/ft. That will probably wind up being an anomaly because there looks to be some monster outlier sales in there such as one condo at 1958 Vallejo and a prime 5th floor one at the Pacific. But still, that’s way above any given week over the past few months I’d think.

    1. This has been my concern about this “pending avg $/sf” metric. It is a literal snapshot of a small sample size and thus not any sort of fair representation (i.e. “mix” issues, and also seasonality). It may be a fantastic leading indicator of some well-regarded post hoc market trend measure, like Case Shiller. Or it may not reliably indicate anything of use at all. Would be great to map it over time to something generally accepted to test it.

      1. Pending avg $/ft is not a good metric. And this website will run very far away from it the moment it starts to trend positively.

      2. Keep in mind our “sample size” is actually 100 percent of all pending sales, not a single week of closed sales (which represent less than 10 percent of currently pending sales), with over 5 years of data, both in terms of volume and pricing. And yes, it’s a good leading indicator, if you actually know how to use it.

        1. It may very well be a good leading indicator. It leaped 10% in a single month. If home prices surge that much in the next couple of months, we’ll have a pretty good test.

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