The volume of applications to secure a purchase mortgage loan for a home in the U.S. inched up 2 percent last week on both an absolute and seasonally adjusted basis, representing the fourth straight week with an uptick in purchase mortgage activity, according to the Mortgage Bankers Association.

That being said, the uptick has been from a 28-year low last month. And despite a drop in rates over the past few weeks, purchase mortgage activity is still down 35 percent on a year-over-year basis with pending home sales in San Francisco proper down nearly 50 percent despite an uptick in inventory levels.

24 thoughts on “Home Buying Activity Inches Up, Only Down 35 Percent YOY”
  1. In the long term, San Francisco, especially its established neighborhoods, will bounce back. The question is whether the city will ever put an end to the human misery on the streets, so that lesser neighborhoods can prosper. The only solution is a combination of zero tolerance for drug dealing, increased use of conservatorship for severe psychiatric illnesses, and group and other housing. How long is long term? Will any Baby Boomer live to see the resurrection of San Francisco?

    1. The Mayor is already in favor of, and in fact during the last election ran on, “increased use of conservatorship for severe psychiatric illnesses”.

      My understanding, as a non-expert on this issue, is that she’s learning the hard way that getting someone under a conservatorship doesn’t make a psychiatric care bed in an appropriate facility appear out of thin air, and if The City or The State doesn’t have somewhere for the individual to go (which is the case most of the time), pursuing the conservatorship is a waste of everyone’s time and everyone involved knows it. And The City doesn’t have the funds to increase such capacity.

      And this isn’t at all specific to S.F., as Mayor Eric Adams is learning the same thing in New York City.

    2. Bounce back? The established neighborhoods continue to be fine and never dropped. Houses are worth twice as much as they were ten years ago. You can’t find anything in the Sunset for under a million.

      Agree with you about the human misery stuff.

      1. The established neighborhoods continue to be fine and never dropped.

        Unfortunately, that’s incorrect, at least based on apples-to-apples comparisons and actual analysis. That being said, it it true that most industry analyses are a couple of quarters, if not a few, behind the actual trends.

        1. I’m not referring to price. I’m referring to quality of life. And while they have dropped in price lately, they have still essentially doubled in the last ten years. So, for those long-time SFers “toughing it out,” myself included, I don’t feel very bad about our situation.

  2. Yes, Brahma, as someone who is an expert, I know that there is a problem for placement of conserved patients, but cancelling the conservatorship and releasing them to the streets will never work, because it just creates a revolving door or at worst death. The amount of money spent on the homeless in this city should be enough to create group homes or more restrictive facilities, whether in SF or elsewhere. The problem is that there is no political will to take on entrenched interests who perpetuate the problem, deliberately or perhaps not. A complete review of the public and private budget is in order. The current decline in the quality of life for the homeless, and for the homed, cannot long continue. But this is San Francisco, the city that monitors “Little Libraries” but not drug dealers.

    1. Things are changing. Boudin is out and the new Board of Supervisors is much more moderate. There are now multiple moderate PACs from the tech industry, including GrowSF, AbundantSF, and TogetherSF, getting involved. The $1.4B in non-profit grants are now starting to be under a microscope. The Asian community – a powerful voting bloc – are motivated and engaged, and lean more moderate. The old hippies of the Haight are starting to cycle out, shall we say. The YIMBYs are conclusively winning the battle against NIMBYs for housing construction. I think we’re getting much closer to a more moderate San Francisco which can lead to change in the street life situation.

      1. Just need Peskin to leave. Most anti construction supervisor out there. Quality of life issues are out of control here. With dwindling taxes from commercial real estate, I worry where we are headed.

  3. A pal lives in the Tenderloin and actually got punched in the face twice in broad daylight for asking the Dealers to stop Cattle call whistling, and screaming and yelling, in daylight, which I hear goes on daily. The police, who he called on 911, twice, did not even respond for 3.5 hours. It’s simply absurd how far this city will go to aid and abet drug trafficking. I say get dealing and using in the building code and put it there. Who else gets away with murder, literally, 24/7, without consequences? Maybe Honduras could fund it’s own revolution for a change.

    1. Police in SF don’t live in SF. What do they care? They are there to rake in the pensions, funded by the generous taxpayers of SF that they let fall into disarray.

  4. Without Federal QE support SF story is done. The valuations are done. The last hope if it still exists – maybe China will bail SF out.

    1. Haha would be funny if SF finally gets the infrastructure projects everyone opines on here (Geary underground metro etc…) through China’s Belt and Road. The fact that I’m not repulsed by the idea probably speaks to how frustrating I find the status quo.

      1. Wife just showed the article from SF Chron -2 mins ago. I was arguging a week or two ago how de-dollarisation is gaining speed. Without demand for USD overseas – the entirety of US RE bubble could get popped. SF would be among the worse affected.

          1. There’s a lot of doom loop priced into the REIT market, along with interest rate re-pricing.

            If the Salesforce Tower Cost 1.1 billion to build in 2013, then Boston Properties has erased maybe ten or so Salesforce Towers in the last 12 months. Coastal city Class A portfolio nationwide for less than $400psf? Don’t mind if I do.

            I also like Kilroy Realty at a price/book under 1 here.

          2. I’ll spare everyone the wordage:
            Simultaneously, it makes little sense for California to allow one of the world’s greatest cities to free fall …The state needs to intervene and offer San Francisco financial and technical assistance
            A. Handout.
            Who’d have guessed.
            Nevertheless there was an interesting paragraph that followed.
            About 40% of office buildings in downtown San Francisco evaluated in a study would be good candidates for housing …But the SPUR report also found most conversion projects “are not financially feasible.” OH! that there might be an intelligent discussion about allowing the first sentence to overtake the second.

          3. From the same above-mentioned Chronicle Editorial Board opinion piece’s thirteenth paragraph:

            Despite our housing crisis, it was years into the COVID pandemic before our leaders meaningfully questioned the logic of reserving some of the most prized real estate on earth for fickle suburbanites and their cars. Downtown, after all, was San Francisco’s golden goose. Companies in downtown offices accounted for 70% of San Francisco’s pre-pandemic jobs and generated nearly 80% of its economic output…we wasted generous federal COVID emergency funds trying to bludgeon, cajole and pray for office workers to return downtown instead of planning for change. We’re now staring down the consequences for that lack of vision.

            Emphasis mine. That made me think about comments made here last year, along those same lines (and which were parroted by the other usual chain yankers here):

            I’m afraid we are witnessing the demise of a beautiful and walk-able city. I blame London Breed for this…If she were to insist the 36K city employees return to the office tomorrow it could be the beginning of the rebirth of the city. I somehow doubt she has the guts to do that. So we watch San Francisco slowly fade away.
            — Posted by ExSFLandlord

            Emphasis again, mine.

            Well, not only did she have the guts to direct City employees to return to the office, but she did it in conjunction with the San Francisco Chamber of Commerce and coordinated the start of it with a lot of white collar worker-employing companies in S.F. such as Bank of America, Blackrock, FibroGen, Gap, Google, JP Morgan Chase, Mastercard, Meta, Microsoft, Uber, United Airlines, Visa, and Wells Fargo. Since it’s now been a year after that effort kicked off, I don’t think it’s too early to conclude that the chronicle editorial board was correct in it’s assessment.

          4. Converting commercial to housing can’t work unless bailed out by a hand out. There is a bigger issue here – commercial capacity must track business requirement. And if the business requirement has dissipated/disappeared – where will the business driven>>employment driven housing demand come from?

            And where is sense in the logic of taking from tax payer for a bail out to create more housing for what will eventually be a higher priced dwelling unit than if the building were initially built for residential. Seems like a hand wavy convenient political misdirection rather than an attempt to address the housing cost/infrastructure/quality of life issues at a fundamental level.

            The bigger/fundamental problem is overbuilt commercial capacity (and over priced housing) – which was enabled by cheap credit. That tap is shut now and we are left with the moral hazard. Welcome to our ghost cities and treasure one can’t eat.

        1. Well, I think it’s obvious that the article ‘Fact’ referred us to isn’t the same one that ‘Cave Dweller’ was. Notcom’s quote piqued my curiosity, so I had to go read the whole thing, paywall be damned (for those commenters interested, the entire original headline from Apr 1st was: San Francisco could be on the verge of collapse. What should California do about it?).

          For what it’s worth, I don’t see that the two sentences in Notcom’s final point are in conflict with each other. Writing “40% of office buildings in downtown San Francisco evaluated in a study would be good candidates for housing due to their physical characteristics and location” is just addressing whether a conversion is possible. The second sentence is trying to say that developers attempting such a conversion won’t make money, and therefore won’t get a loan to undertake the conversion when they take their pro forma to a lender, and that the conversion won’t ultimately happen.

          1. Or as we simply outlined over a year ago, and from which we haven’t deviated, despite plenty of whining, whinging and uninformed opinion pieces since: “the conversion of existing office space to residential use currently makes no economic sense for the vast majority of downtown San Francisco buildings. Zip. Zero. Zilch. And it’s not a matter of “demand,” per se, it’s a matter of the relative value of each use and the cost of conversion.”

            All of which brings us back to the data and trends at hand, with pending sales in San Francisco (demand) down despite more inventory (supply) and what said trends portend.

    2. I am not in real estate, but I keep a quarterly report of all my assets, including estimate of my house value, for my budgeting. I do see a lot of house pricing changes out here in the Parkside the last year. I have a 3 bedroom 2 bath 1800 Sq ft Parkside house built in 1930 . I avg the estimated value for my house from 3 real estates sites every qtr. I have seen the following during the last couple years as to my house’s est value.
      3/31/2021 1,530,691
      6/30/2021 1,625,632 +5.84%
      9/30/2021 1,710,510. +4.96%
      12/31/2021 1,730,145 +1.13%

      3/31/2022 1,817,441 +4.80%
      6/30/2022 1,827,174 + 0.53% Peak
      9/30/2022 1,680,464 -8.73%
      12/31/2022 1,528,447 -9.95%

      3/30/2023 (today) 1,551,096 +1.46

      I have lived in this house since 1984 and will probably always live in it. But I think my house seems to reflect what I see in another post on socketsite about the Shiller index indicating declining house values of 17% in SF since last May. Many houses for sale out in my neighborhood seem also to reflect this. The trend for houses for sale out in my neighborhood show many reducing list prices during the 4th qtr last year and this seems seems to be continuing during the 1st qtr this year. Although with all the rain you would wonder if even very many people are even into getting out and looking for a house, even if they don’t mind the higher interest rates.

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