Fog City Guide

November’s numbers are just in. While the SF Chronicle is reporting the pending sales rise of October here you have the November 2009 San Francisco Market Watch News and Anlysis

November sales were down 13% from October when our market had shown an 8% increase. The number of available properties also declined from 1725 to 1477 which is a decline of 17% thus keeping the absorption rate for single family homes at 2 ¾ months and condos are at 4 months.

The volume of sales will continue to decline as shown by the number of transactions that are in escrow as of the first of the month. The pending sales volume is down from October by 4%.

While the unit sales numbers are down from the previous month, they are far better than November 2008, in fact they are up by 39% and for the year sales volume will be up by 24% over 2008.

 Historically the volume of sales for single family homes held consistently above the 2500 units per year till we entered 2007.  Condominiums have risen obviously due to the increase in construction of the condos in our market. 

The next chart shows the market volume on a monthly basis. The volatility of 2007, with it’s general declines carried through all of 2008 which showed some seasonal spiking yet ended with an even lower volume than 2007.  Moving through 2009 we see the seasonal trend but we also see a little strength holding towards the end.

This is likely an indicator of the Federal Tax credit for first-time buyers that were set to end October 31, 2009. That impetus probably explains the continued activity more than consumer confidence or increased access to funds would.  The tax credit was eventually extended and expanded on November 9th.  The extension continues the $8,000 dollar tax credit for first time buyers and adds a $6,500 tax credit for “repeat homebuyers”. These tax credits work in similar ways. The credit is 10% of the purchase price up to the maximum of $8,000 and $6,500 respectively. The first time buyer is a buyer that has not owned a home in the 3 years prior to the purchase. A repeat buyer is anyone who has lived in a primary residence for 5 consecutive years out of the past 8 years. The Repeat Buyer Credit will allow families that want to move up into larger homes and empty nesters that want to move into smaller homes an opportunity to take advantage of the credit. Additional information can be found at the Federal Housing Tax Credit web site.

In looking at the volume of sales and comparing that to the drop in both sales and median price I decided to look at the changes in the market by comparing the volume of sales in price categories.  

The number that jumps out is the increase in the percentage of the under $500,000 sales from 2007 and the decline in percentages of the one to two million category. This shift shows clearly why the median price has dropped from the high range to the lower ranges of the $500,000 to $1,000,000 category.

The November median price for the City stayed relatively the same for condos and rose a bit for single family from October. Combined the number rose by 0.5% from November 2008.

So what was the median where you live? The following graph shows the median sale price for the month of November 2009 by SFAR district. If you perchance don’t know what district you live in here is a map.

For further information on the market or my analysis feel free to contact me.