That’s all good, right? But looking at the median price by district there is a steep decline in price. (Remember these are the Association of Realtors districts not the Supervisorial districts. To view click SF Realtor District Map). While many things affect pricing and watching median pricing only serves to show trends, District 5 including Noe Valley and Glen Park had been white hot. Now the number of remodeled homes that were speculative has decreased. Contractors are holding off because money isn’t available for construction loans.

The median price represents the dollar value that is in the middle of all the homes sold during a period. Looking back at the distribution of prices it’s clear that the more expensive homes sales are declining in sales while the quantity of lower price homes increases. In 2004 the sales volume peaked and in 2007 the median price peaked in the San Francisco market.  Is every property worth less now than it was or is the median skewed by the sale of more less expensive homes? I say it is not.

If you sell in this market you need to be prepared for this market. Making the property show well and positioning the price to be attractive are so important now, even more so than when every house would generate multiple offers. To get to the highest possible price the market will bear the seller needs to be strategic and the agent needs to be a very good negotiator.

So what was the median price and size in your neighborhood for December? The following chart shows the price, size and how long it took to sell the median home in your district. This was popular when I used it last month. I got comments from readers that it was handy to be able to compare your house with the one listed here as the median.

 If you are thinking about selling in the coming year all indicators say go ahead. There are buyers and the Federal tax credits are motivating people in greater and greater numbers. The activity is up as the open escrows show. In October and November there were over a thousand properties in escrow on the first day the month. That was in anticipation of the ending of the first-time buyer’s credit. Now that the credit has been extended and expanded San Francisco has over 300 more transactions in escrow this January 1^st compared to last year’s January number.

Prices are rising, inventory is tight and buyers are buying. It isn’t 2004 as far as the sales numbers go and since money is tighter it isn’t 2007 where higher end homes were sold but interest rates are really low and the market is very active.  

By the way there are some great deals outside the City too. I’ve helped clients get condos under $300,000, some under $200,000, great homes in nice established areas for fantastic prices all around the Bay Area. Second homes or investment properties a solid buys. With the additional tax credit, it might be time to move to the sunshine and transfer the tax basis from your long held City home.

This is where the median price for both single family homes and condos were every year of the past decade.

August 1, 2009

From the Fog City Guide

By Jed Lane

In July the number of sold units in the real estate market is up over the month previous in both single-family homes (SFH) and condominiums. SFH are up 10.6% and condos 12%. When looking at the same month one year ago the condos sales are down 30% and SFH are down only 1%. Here is a graph of the combined catogories showing units sold month by month.

The above reflects the steady rise of units in escrow that has been happening in San Francisco since the first of the year, but as of August 1, 2009 the number of open escrows has turned down. Single family is down 11% and open escrows for condos are down 15%. The number of open escrows should predict the number of units sold. Therefore the market should see a decline in sales transactions in August.

Although the rate of inventory absorption in both categories is still falling that number reflects the higher sales number of closed units. Even with the lower number of open escrows looking at the steady number of available properties on the market, 548 SFH and 940 condos, we are in a strong sellers market for SFH with the inventory sitting at a 2.65 month supply. Condos are riding the edge of a balanced to buyer’s market with inventory at a 5.14 month supply.

Pricing, what is going on with pricing? The median price, we need to remember is a function of where are the majority of sales. That said the past month broke the upward trend line that has been going on in the city since March. Single-family homes fell from $785,000 to $780,000, little more than ½ of 1%. Condo’s showed a deeper shift from $676,000 to $601,000, more than 12%. Taken together the median price in San Francisco is $702,000 for the month of July 2009. That is a decline of just about 5% from the previous month and a 16% drop from the same month in 2008.

So what does it look like in my area of the City? Here is a table that shows what the median price, days on market and the median size in each of the ten districts of San Francisco. If you aren’t sure which district you live in check this map http://www.sfrealtors.com/sfarmls/sfinfo.html

Single Family Home Median July 2009
District	Sale Price	DOM	Beds	Baths
1	$1,075,000	63	3.5	2.5
2	$750,000	34	3	1.5
3	$650,500	30	2	1
4	$851,500	58	3	1.75
5	$1,240,000	40	3	2
6	$1,045,750	49	3	2
7	$4,792,500	46	4.5	4.5
8	No SFH sales in this district
9	$817,500	45	2.5	1.38
10	$503,000	34	3	1.5

Condo Median July 2009
District	Sale Price	DOM	Beds	Baths
1	$645,000	39	2	1
2	$645,000	39	2	1
3	$645,000	39	2	1
4	$645,000	39	2	1
5	$699,000	73	2	1
6	$619,655	43.5	2	2
7	$822,500	86	2	1
8	$664,500	49	2	2
9	$572,000	75	2	2
10	$645,000	46	2	1

]]> http://fogcityguide.com/2009/08/san-francisco-market-watch-august-1-2009/feed/ 0 http://fogcityguide.com/2009/03/real-estate-comments-from-car-economist-leslie-appelton-young/ http://fogcityguide.com/2009/03/real-estate-comments-from-car-economist-leslie-appelton-young/#comments Thu, 05 Mar 2009 22:13:43 +0000 Jed http://fogcityguide.com/?p=101 Yesterday I took the opportunity to go listen to a talk about our market. Ms. Appelton-Young had some very interesting comments that I believe are worth sharing.

Talking about how the market got to the dire situation it’s in now; she said in reference to the zero down loans, “The banks were buying properties without the buyers having any stake in the home”. Think about that the next time you hear about homeowners needing to be stabilized. I think those buyers are really just tenants in bank owned properties and it’s the banks that need to be stabilized after buying so much real estate.

She also talked about the long held concept in real estate that downward pressure on pricing is typically slow. This is called the “sticky price” phenomenon. It speaks to the actuality that if there is downward pressure on values homeowners are reluctant to sell. If they have a choice they hold on and stay till prices stabilize. So in thinking why this downturn is different she realized that many of these sellers or defaulters had no equity in the property and with nothing to lose they chose to walk away. In this slide there were more folks that had no equity, because of the 100% loans and the other low-down, teaser rate product. Her conclusion in this thought process was that “you are not a homeowner when you have no equity”.

When she took out her crystal ball and made predictions for the state she feels that the low to mid price market will see sales grow and price rise because the sub-prime borrower’s loans have reset and the banks are disposing of them now. The mid to high end will see declines in the coming period because this credit crisis has gone global.

San Francisco’s market has held up well throughout 2008 and last month I reported an increase in median and sales volume. The remaining problem is the access to money. The spread between the 10 year T-bill and mortgage backed securities is a high, 3%, when it typically runs about 1.6%. Jumbo loans, which just about every buyer in SF needs, are therefore very expensive.

President Obama has released his latest housing plan and the conforming rate is back up to $729,500. Which if you have if you have 20 percent for your down payment ($182,375) you can buy a $911,000 home as long as your payment is only 35% of your monthly income, about, $12,500.

Blame has been laid at the feet of borrowere who should not have taken out loans and lenders who should not have given out loans to the borrowers who shouldn’t have borrowed. So Ameican to blame the individual and not recognize the fact that from the top down everyone believed simply there was money to be made and since we are all supposed to take advantage of every opporunity to make money – Go For It!

The breakdown happened when finance products were made available by investors through securitized mortgage bonds. Looking back it looks to this simple observer that a Madoff – Ponzi scheme was pulled. Rates on sub-prime loans were very attractive to investors so more and more investors sought them out. Finally the well ran dry as all Ponzi schemes do and with no more money coming in, interest rates resetting on the sub-prime loans it became time to sell the asset that was no longer affordable.

Supply increased across the country which drove prices down and that meant that even the prime borrowers that used adjustable mortgages to purchase were forced to sell because the interest rates reset and the price of the property declined with the glut of inventory. Areas hardest hit were areas with large amounts of new construction.

San Francisco City & County has done pretty well when compared to the rest of the region, state and nation. My data is taken from the San Francisco Association of Realtors multiple listing service. I gather the data on the first of each month to get a snapshot of the inventory. My analysis shows that our market has held steady up till the last quarter when sales dropped off and inventory increased. At the end of the year single family homes had an absorbtion rate of 4.8 months, which indicates a balanced market verging towards a buyers market and condos at 10.6 months which is clearly a buyers market.

Pricing data in San Francisco is only of value as a trend tracking tool. Market value will vary by neighborhood and site inside each neighborhood. That said, median price in the City has decreased from Januray to December. The reflection of median price is skewed towards the larger quantity of homes sold in the lower than median price market.

I have published data and graphs on the Real Estate Page. Just click over to see what’s going on. I have other data and am happy to share it with interested parties. Feel free to contact me.

It’s strange how we can find our passions.

In 2004, in a meeting at my Coldwell Banker office an agent brings up the 2004 Housing Element of the City’s General Plan. He spoke against the increase in density along transit corridors in the plan. I reminded the office that as Realtors we take an oath to support home ownership opportunities and if we don’t support higher density then we are not supporting housing opportunities.

Naive and simplistic, but it did provoke discussion. For the next few years I worked on the Housing Opportunities Committee of the Association of Realtors and basically dip the tip of my little toe into the issue.

After I joined the Board of Directors of my neighborhood and was asked to be the delegate to the Coalition of San Francisco Neighborhoods (CSFN), I learned that the depths of the housing issue is full of rocky shoals waiting to sink the ill informed. I tried to enter a discussion about the Market Octavia plan which had just been passed by the Board of Supervisors. I found that I really knew very little and not at all qualified to discuss the issue.

Here, I’m a native son and a Realtor and I can’t discuss the City’s Housing Element of the General Plan. This plan is required by law and outlines the direction the City is taking on the issue of housing. The General Plan contains other elements but I’d like to believe that local Realtors know the housing element and are active in the vision. Guess what, not so much.

Since then I’ve studied, discussed and returned to SF State to study Urban Plannning. Last week I was invited to a gathering of local housing and neighborhood activists for the annual party. We discussed housing, planning, politics and other quality of life issues in San Francisco. Opinions ranged from smart growth advocates to no growth advocates, the discussion was lively, ideas and experiences were exchanged and discussed. Local personalities were parsed and history was revisited. If anything was resoplved it could only have been the opening of eyes and ears to different opinions and allowing growth.

San Francisco is at a very significant junction. The City has grown in population for the fist time in decades. the housing shortage is getting worse within the City limits event though condos are being created at a fast rate. San Francisco is building more “permenantly affordable housing” and calling for much much more in the 2009 Housing Element. We are finishing the rezoning of large areas of the City to meet future visions while looking at a future of non-oil dependant transportation.

My neighbors west of Twin Peaks are banding together to keep the life style and density of thier neighborhoods. Among the people that are concerned about the issues that swirl around housing issues and future development passions run very strong. When I sit and listen to developers, non-profit and profit, talk about where can they create more housing the western neighborhoods are clearly lusted after.

San Francisco Single Family Market

The top graph shows the number of homes available on the 1st day of the month. The bottom graph shows the number of homes sold in the previous month.

San Francisco Condo Market

The top graph shows the number of condos available on the 1st day of the month. The bottom graph shows the number of condos sold in the previous month.

This graph shows the absorbtion rate for different product types in San Francisco. The absorbtion rate is a product of the number of units available divided by the number of units sold in the past month.

When there is less than a 3 month supply it is a buyers market. If there is between 3 and 5 months supply it is generally a balanced market and above 5 months is a sellers market.

You can see that our market is running pretty consistantly in both homes and condos.

NAR reports there is a 10.5 month supply of resale homes nationally and CAR give about the same number statewide.

From SFAR:

• “Recent data suggest real estate market pessimism may be overblown. Even economist Karl Case, father of the S&P/Case Shiller Home Price Index, admits many industry pundits and members of the media are ignoring key facts—as demonstrated by their focus on negative year-over-year price figures rather than more recent monthly data. An example: Home prices actually increased slightly in eight of 20 Case Shiller markets between March and April. Instead, the focus of most media reports was on year-over-year figures, which continue to support the notion that the market may not have hit bottom, let alone begun to improve.
• Transaction-related indices may be skewed at present by a far larger than normal share of subprime-derived default and distress sales. In the San Francisco Bay Area, for example, more expensive homes (those priced over $721,548) have dropped in price by only about 10.7 percent from their peak, compared with homes priced under $473,711, which have tumbled by 40.9 percent.
• Even new housing construction numbers suggest an improvement, according to Case. He notes that housing starts, which fell to 975,000 in April from 2.27 million in January 2006, have fallen by similar percentages three times during the last 35 years. Case observes that each previous time this has occurred the market has staged a surprising upturn within a quarter. Only a slide into a recession would temper his optimism about the potential for a similar recurrence of this trend.

When I read the article this just jumped right out “Other than Larry Kudlow of CNBC, none of the journalists who interviewed me after the latest release seemed at all interested in any of the positive developments,” says David Blitzer, chairman of the S&P Index Committee. “They seemed focused on the bad year-over-year number.”

Doesn’t that really just say it all! It is a very good article and I’d strongly recommend it to every real estate professional.

The summation of the article is for all the posting chuckleheads on the real estate blog platforms. I’m going to refer them back to this every chance I get. “It is important to remember, as well, that even after a steep drop in the S&P/Case-Shiller Indices, long-term buyers in the top 20 U.S. metro markets have seen their properties appreciate by 70% since 2000. Home prices often take five to 10 years to recover fully from severe declines such as this. But at least the available data suggest the scary dive in home prices soon will be over.”

70% appreciation, after the drops, in 8 years in all the top 20 markets. Outstanding! But bad news for the chuckleheads.

It talks about signs of change in the realaity of the real estate market that the mainstream news media is ignoring.

This quote really sum’s up what we are being told; ‘”Other than Larry Kudlow of CNBC, none of the journalists who interviewed me after the latest release seemed at all interested in any of the positive developments,” says David Blitzer, chairman of the S&P Index Committee. “They seemed focused on the bad year-over-year number.”