While the number of single-family homes and condos on the market in San Francisco jumped last week and listed inventory levels are 30 percent higher, not lower, than average for this time of the year, the number of homes in contract to be sold in San Francisco remains at its lowest point, on a seasonally adjusted basis, in over six years.
And with average asking prices on the decline, despite what you might have read elsewhere and/or been mislead to expect by others, the average asking price per square foot of the homes which are in contract has just slipped back under $900 per square foot and is down over 10 percent from the second quarter of last year to its lowest level, on a seasonally adjusted basis, in six years, none of which should catch any plugged-in readers, other than the most obstinate, by surprise.
Is this for SFH or condos, or mixed?
“Affordability at Multi-year High” FTFY.
Oh, wait, my bad: affordability is only a good thing if we have that and ever-incresing prices too.
Is it obvious that just because asking prices are down, that therefore housing has become more affordable? Affordability has to reflect ability to pay, and if San Francisco incomes are down over the past six years, or if ability to pay has been negatively impaired by significantly higher mortgage interest rates, the lower prices might be outweighed by the decreased buying power and affordability might be lower. You can’t just assume ceteris paribus.
Well sure we can, ‘cuz anything in SF worth buying is an all cash purchase…I read that right here on SS, many times
🙂
While I was being facetious, there, the OP was actually lampooning the simplistic ideas we often see pushed. One of these being that low interest rates are a good thing. That may be true in the (very) short-term, since less money has to go to interest, but in the long term it largely gets shifted to higher principal payments (aka: higher prices); and of course the higher prices > higher down payments…at the very same time savers are seeing their balances stagnate.
The other bromide is that we can build our way to affordabilty. So if we build more Maseratis then they’ll become affordable ?? Uhm, no. You’re not going to have affordable housing when it costs $500/sf to build. (And it’s not going to cost much less than that when The Trades are pulling in three-figures-an-hour).
Now would be a great time for the city to start acquiring some multi-family properties <$400 PSF, if not for the Fentanyl/homelessness challenges brought on by municipal spinelessness and ineptitude.
While SF has lost around 60k residents since 2019, Breed&Peskin have come out recently trying to roll a $300m bond for mostly new housing construction, pursuant of the housing element. (The Examiner has an article with details.) If current realities remain, that wouldn’t even be cost effective modular construction.
Gee, such money would be much better spent rehabbing the broken buildings the City already has, and ensuring they remain in shape over time. And as a side, that would presumably keep the trade unions happy. Then the City can think about new acquisitions as you suggest, and lastly, new construction. The BoS of course will pass that bond proposal on to a ballot next year, where it needs 2/3 of votes. Personally- I don’t think so.
honestly not sure why anyone would vote for more bonds uhtil the city gets its financial house in order. $14.7B budget is enough. they need to cut out waste. there is literally no accountability
Yes, because the current reality is that modular construction is only cost effective in the minds of those in the S.F. real estate “game”. Take that project in Mission Bay that used upper floor modules constructed by Factory OS in Vallejo and trucked to the Block 9 site for final assembly. $812 per ft.² not including lands costs, for substandard studios. In other words, not meaningfully cheaper than traditional stick construction.
In case you haven’t been keeping up on industry news, SoftBank pumped around $2 billion into Katerra, a startup integrated construction company which manufactured large building components off-site. Within 4 years, the company burned through their funding and by June of 2021 they laid off many of their employees and filed for Chapter 11 bankruptcy.
As reported by the Examiner, the bulk of the bond proposal is slated for low income housing. Scale is key in modular, not onesie twosies, so that would bit a great fit, if only – like everything City&County – this wasn’t going to be structured to maximize the city family take, “getting theirs”. In any case, seen through your monocle, congratulations: If you live in San Francisco, this bond would make you party to the “game”, played by the City&County there for you.
It’s not just an SF phenomenon: It costs $670,000 to build an affordable housing unit in Sacramento.
Daniel, hopefully you caught this in the Aug San Francisco Chronicle article by Aldo Toledo headlined S.F. plans to ask voters for $300 million to build affordable housing. Will residents support it?, down around ‘graph seven:
So, it is part of the plan for the bond, if it is approved, that The City will use part of the money for “rehabbing the broken buildings the City already has”.
Why are you opposed to new construction? Are you afraid it will slow down the displacement process?
I am not opposed to new construction, my point is to prioritize the preservation of existing housing first. Much of the City’s stock is in shambles. Perpetually broken elevators, water damage, rodent infestations, electrical issues and so on and so forth. The $30mio set aside in the proposed bond will hardly make a dent.
Also understand that Breed supports this so she can lay claim to all that new housing. Peskin’s interest is keeping the State out of Telegraph Hill, so he needs to provide as much coverage for new units built (towards the Housing Element) as possible.
I understand all of that and I don’t have a problem with Breed or Supervisor Peskin claiming that they brought new housing into the pipeline, they are elected officials and these projects will be publicly funded during their time in office. If Michael Shellenberger or Daniel Lurie were Mayor they’d do the same thing.
What we know doesn’t work is waiting around for private developers to complete enough projects to address the shortage of housing that’s been apparent over at least the last twenty years. The reality is that private developers alone will not solve the housing crisis.
B….b…but isn’t one of the main narratives that prices are falling precisely because of that “municipal spinelessness and ineptitude.” ?? You can’t have your ice and smoke it too.
So those in the S.F. real estate “game” think that The City should bail out the local penny ante mom and pop landlord class by using taxpayer funds to provide an artificial floor to multi-family property pricing and impede price discovery? Don’t see why The City, even if it had the money standing by unallocated, should ride to the rescue when it’s not clear we are at the bottom yet, and as to owners of small multifamily properties…well, I have more sympathy for the folks they have put on the streets over the years via price hikes and displacement. I see no reason to prevent them from taking a haircut and in fact I welcome it. If they have to sell, they should put their properties up for auction with no reserve, submit themselves to The Market and if need be, take their lumps like the good capitalists they are so fond of telling everyone they are.
Shouldn’t the City be willing to put in a floor for “penny ante mom and pop landlords” properties given that they already have a ceiling owing to rent control rents being limited to 60% of CPI-U?
Landlords have a readily-available avenue for opting out of rent hikes being limited to a certain percentage of CPI, namely: buying and operating a market-rate building. I don’t understand why more penny ante mom and pop landlords just don’t do this instead of owning a building subject to rent control and then wasting their time advocating for the end of rent control on blogs and social media.
Any one of them could have purchased, for one example, that recently-completed 25-unit development at 603 Tennessee St. near Mission Bay and leased those units out for whatever amount their heart desired.
As for “buying and operating a market-rate building” – there aren’t really that many and they command a higher price. Only buildings built after 1978 are not under rent control and a many of them were built and sold as condominiums.
Is a 25 unit / 16.5-million-dollar investment considered a “penny ante mom and pop landlord” building?
Any building is affordable to some sufficiently capitalized “mom and pop landlord”. You see, I’ve been listening to the glibertarian chain yankers in these comment threads over the years who say over and over again, “All housing is affordable to someone,” so I assumed that the same holds true for mom and pop landlords.
Another recent example would be that condo unit #306 at “Stage 1075” which was listed for sale early in the Summer for just $598,000, with the “remarkable bonus” of a “high-quality tenant…in place, ensuring stable rental income”. Presumably the agent who wrote that copy had “mom and pop landlords” in mind.