February 19, 2007
Just Quotes: It’s Hot In Manhattan, But What About Here?
“Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.”
∙ Housing Market Heats Up Again in New York City [New York Times]
First Published: February 19, 2007 8:18 AM
Comments from "Plugged In" Readers
It IS happening here, in a BIG way. It's just the papers are not on top of it yet. Every agent, and buyer really out looking and watching what is happening on a day to day basis will confirm the same story New York is reporting.
It's easy to focus on reduced properties because that is immediately apparent - what isn't being shown are how many are going over their asking. Those numbers are just starting to show up - which means the press and everyone watching from a pure numbers vantage point are a full month behind.
The two best value new developments are THROWING people into reservations even though their doors are barely open; Properties that did not sell last year are, if they are well priced, selling for over their old list prices. And anyone actually in the trenches will tell you it's been game on and pretty much since the first of the year.
Numbers can be spun to sell any theory so I only trust them when I am running them myself because I know what my bias is. By the time the press picks up on the current trend it likely will have shifted to incorporate new rules anyway, but good job sniffing out the under reported reality. I was wondering when you were going to pick up on it.
Posted by: Meredith at February 19, 2007 10:11 AM
"...this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side..."
So the turnaround in NYC is not all from bankers' bonuses.
I don't know whether SF will turn around, too, but the recent hiring by tech companies here can't hurt:
Posted by: Dan at February 19, 2007 10:12 AM
Meredith-- What are the 2 "best value" new developments you're referring too?
Posted by: Dan at February 19, 2007 10:18 AM
No offense, but I'm having enough trouble getting my qualified buyers in there in time to cherry pick the good units - so if you don't mind I'll let other people fill the comment section with their multiple opinions and keep the rest of my many opinions to myself.
If you haven't noticed you take your life in your own hands commenting as a visible realtor on this site.
I will say most of the new developments that have been selling for the past year (caveat on the price point of course) are also reporting a huge upswing in contracts written since the beginning of the year. It's just there's no point putting that in the comment section here since there are going to be 10 people nay saying that we are only saying it because we have a financial incentive to do so.
Which is actually false since if it's a seller's market I do more listings and carefully coach my buyers that they are making a long term decision, if it's a buyers market I tell my sellers they have to be realistic or not sell if they are looking at not coming out with what they need to make their next move. Either way up or down an agent with sense is going to make their clients money which at the end of the day is the ONLY way to have longevity in this business.
Posted by: Meredith at February 19, 2007 10:33 AM
WOW! THE MARKET IS ON FIRE, say the realtors, who used to control access to information.
Unfortunately, there are other sources and those sources aren't so likely to support the Realtors "Hurry or else" story.
NYC inventory has started to rise and is only off about 4% from May of last year. Not a sign of a market on fire:
SF inventory is in about the same shape: off about 7% from may of last year and rising more quickly than new york, most likely because of the new relisting rules in effect at the SF MLS.
I'm sure there is a bit of a bounce in NYC, because there, people have CASH. With 20% or more of the mortgages evaporating in the rest of the country, people without cash will be a dime a dozen. They can look all they want: they aren't going to be able to buy because no one will loan them any money.
Posted by: tipster at February 19, 2007 10:48 AM
Meredith, the reason I ask about those new developments that are selling well is that so much of the focus of debate here has been on 1Rincon and the Infinity, that it would be good to hear from those on the ground how the market is in the mid-range developments, and for homes in neighborhoods like the Mission, Bernal Heights, Glen Park, etc.
Posted by: Dan at February 19, 2007 10:53 AM
I am also interested to hear which new developements are selling well. This would counter all of the gloom and doom in my office regarding upcoming prospects for more architecture work as things are rather slow right now for us.
Posted by: Anonymous at February 19, 2007 10:59 AM
"NYC inventory has started to rise and is only off about 4% from May of last year. Not a sign of a market on fire..."
Tipster, the link you post after this statement does not show NYC data, but rather data for the greater NY metropolitan area, which is a vast area. So the link isn't anymore relevant to NYC proper than data including homes in Solano and Napa would be to SF.
Posted by: Dan at February 19, 2007 11:00 AM
This quote really stands out for me ...
“There were people bidding on the apartment sight-unseen,” Mrs. Hamill said. The victors got the co-op through a sealed bid, she said. “It was like a pair of shoes that you absolutely had to have,” she said.
This really doesn't sound normal. it sounds more like some kind of panic buying. Even the RE agents in the story seem to agree.
"Ms. Ramirez, who has sold real estate for more than 30 years, said she expected that the current rocketing growth would be followed by a period of slower yet steady increases. “I don’t want to hear, ‘Oh my gosh, the market is slowing up again,’ ”
Looking closely at the story and the quotes this seems to be a pretty classic 'dead cat bounce'.
Bonuses on Wall Street were relatively low for a few years and then in 06 we saw record bonuses and now early in 07 we see a flurry of buying activity that even the RE agents seem to think is more a spike then a trend.
But in the end I. personally, would rather see more people being able to get into a home then be foreclosed on. So I hope for the people who are buying at the lower price points are getting mortgages the can afford and putting down a nice chunk as a down payment.
Posted by: badlydrawnbear at February 19, 2007 11:08 AM
Meredith - I doubt anyone would be surprised that "the two best value” new developments are going gangbusters, but that sounds like an indicator of a particular building’s strength rather than the market overall. I am out looking every weekend, and I’m honestly amazed at how eerily quite most sales offices have remained.
Posted by: Michael at February 19, 2007 12:08 PM
Why does everyone feel the need to define the market as RED HOT or CRASHING/BUBBLE BURSTING? Can't we all agree that the measurement stats are flawed and that the market is adjusting to a confluence of factors?
"It IS happening, in a BIG way"? Why even bother posting / stating that as a fact? It's obviously your opinion ("bias") and everyone here (that's not a broker/agent) is going to jump on a statement like that..
Posted by: eddy at February 19, 2007 12:29 PM
Well as another agent, I have to chime in and agree with Meredith. I work for a large firm in the city and I can tell you first hand that many of the agents in my office, myself included, have a list of clients very aggressively looking to buy, but with inventory down there has been slim pickings for these well qualified buyers to choose from. Instead of barking at the agents whose job it is to know the market, you might try making friends with a good one!
Posted by: anon at February 19, 2007 1:26 PM
I'm overly qualified, working with a great agent, and "aggressively looking to buy", but I don't think that speaks to the strength of the market. What does seem to speak volumes is that I'm now being counseled to be diligent and selective in my purchase. That's quite a change from just a year or two ago when "buy anything" and "pay anything" seemed to be the prevailing wisdom in San Francisco.
Posted by: Anna at February 19, 2007 2:27 PM
When I was at The Fillmore Heritage last week I noted that there were 18 units spoken for in February alone. In THAT neighborhood, with still another half month to go. Those are excellent numbers, and simply will not be reflected in the market statistics that you get from companies that look only at MLS sales data. Condo resales are comparatively sluggish -- but that doesn't tell us about the whole condo market.
Posted by: Damion at February 19, 2007 3:00 PM
Let the months of March and April speak for themselves. They are right around the corner and everybody is waiting to see that they have to bring. I am just stunned that people can say the market is hot when I watch sfgate.com each week. Sales are way, way, way off from preivious years.
NYC? Welp, I was on the east coast during the heat of the dot.com bubble. Real Estate was skyrocketing in the Bay Area while it was not doing much there. Wall Street workers are making $$$$ right now and I believe they are the cause of the prices jumping. They spend money, which puts dollars in a lot of people's hands.
Posted by: Anonymous at February 19, 2007 3:43 PM
Meredith, I'm new to SF and in the market to buy a condo. All the doom and gloom data has me worried and hesitant to purchase at this point.
Seems you are quite knowledgeable in the local market and can help steer a first time buyer.
Please email me @ firstname.lastname@example.org
Posted by: SFBuyer at February 19, 2007 4:27 PM
Well I think the number of buyers compared to the level of inventory certainly speaks to the condition of the market as supply and demand drive the market! I hope that any smart agent would always advise clients to be diligetnt and selective when you purchase a home in the city.
Posted by: anon at February 19, 2007 5:47 PM
The idea that anyone could even think that the New York City market growth could translate to here in San Francsico is astonishing. The provincial myopia of this "city" never stops amazing me. Our markets are more impacted by the largest city in Northern California (San Jose), than they are by N.Y.C. Oh and don't forget about that little town about 450 miles south that has about 12 million in its metro area and has an economy about 5 times the size of the Bay Area. Nice try on the positive thinking though. Most New Yorkers think of L.A. as THE West Coast city and our city is more invisible back there than we would care to believe. We are looked at more as a "Romantic Weekend Getaway" destination.
Posted by: Anonymous at February 19, 2007 6:30 PM
"I will say most of the new developments….are also reporting a huge upswing in contracts….. IT’S JUST THERE’S NO POINT PUTTING THAT IN THE COMMENT SECTION HERE..."
Really? But you DID choose to put it in the comment section after all, didn't you? Do “most of the new developments” you mentioned include, say, the Palms, Arterra, Glassworks, 235Berry...(I could go on and on)? I wonder why the sales persons themselves at these places told me they weren’t selling anything. I also wonder why the developers keep lowering prices and putting out "limited time" offers like free upgrades and 3 year HOAs. I guess the developers with all their research teams must’ve missed the fact that it’s happening BIG here.
"It IS happening here, in a BIG way."
Funny thing about internet is that what you say...stays. We'll see what's gonna happen in the next few months. My friends in the industry all think the opposite. But like most professionals, they “express” publicly from a, let’s just say, different perspective. A couple of them actually did see what’s happening in NYC right now and bought quite a bit there themselves. But no one sees anything happening for San Francisco for a long time.
Look, we ALL hope that real estate keeps booming. But things happen or stop happening for a reason. What’s your reason for suggesting that the real estate here can defy any natural cycles that statistics suggest and keeps soaring after the longest appreciation period in history?? Educate us...
Posted by: Anonymous at February 19, 2007 9:14 PM
I'm a Realtor in a town about 50 miles outside of Omaha Nebraska, and I've been telling all my clients the same thing as you guys in SF: the market in NY is just a leading indicator for our town (population 30) and it's only a matter of time before all that largesse gets to our market. In fact, I can't think of any largesse, no matter how remote, for which I can't come up with a logical explanation of why it will help the market here.
Why, Fred, up the way, works for a brokerage outfit, and I'll be he's going to buy lots of houses. Yesiree. And I hear Betsy Rae's cousin's daughter works for Google out in Mountains View...
Posted by: anon at February 19, 2007 9:36 PM
As somewhat of an "insider" I guarantee you that the reason some new developments are selling so quickly is that probably 75% of the buyers are hoping to flip once the building is complete. That to me is not a strong market - its like the stock market several years ago all over again. Amateurs have flooded the market hoping th make a killing - a sure measure that something is out of sync. Married to someone in the industry, I can tell you the market has cooled a bit here although not signficantly
Posted by: Annonymous at February 20, 2007 9:03 AM
The Infinity and One Rincon appear to be taking a huge share of new condo interest out of the entire market, so THOSE those 2 projects are doing big numbers and perhaps holding prices.
but what else ? -- other projects are limping along -- say the arterra and hayes by same developer have low sales and rising concessions - and i have heard -- not sure - that palms is rolling back prices to early resease levels to hold contracts / sell reminder units.
resales at downtown "mid-end" projects that were "eclipsed" by the infinity and one rincon appear to have weak / declining resale pricing -- like 199 new mongomery , the lansing and metropolitan.
and once hot royale and still dragging along unsold.
anyone have any real sate on these observations -- one way or the other? woud ve very interested to hear.,
Posted by: realist at February 20, 2007 9:10 AM
Instead of barking at the agents whose job it is to know the market,
Wow, you can get paid for knowing the market?
And all this time I thought the job was getting paid by generating commissions from creating more transactions.
That explains why librarians are so highly paid. Oh wait.
Posted by: Cynic at February 20, 2007 11:41 AM
The NYC vs. SF economic comparisons are interesting. This year alone, Wall Street paid out more in compensation than the GNP of the nation of Vietnam. Meanwhile, our financial district is a small pond of satellite offices and boutiques that pay people a fraction of what their New York counterparts make. There are less than 10 Fortune 500 firms headquartered in the city, and our stock exchange is a gym.
Manhattan is about 28 square miles and is home to 2 million people. San Francisco is 49 square miles and home to 750,000.
My point: If you want to compare population/economy of SF to another city, don't use NYC - Boston is more appropriate.
Posted by: Dude at February 20, 2007 12:05 PM
Manhattan has the United Nations, and we have United Nations Plaza (the home of the homeless) which I think says it all. Dude is right that Boston is a better comparison and it is important to remember that we are only the 4th largest city in California. San Francisco is not New York West.
Posted by: Anonymous at February 20, 2007 6:07 PM
From all so many who said "certain" new developments are selling fast and furious, I have not seen one person (or should I say agent) answered which project exactly they are talking about. One day the only project that DID sell well LAST YEAR and its direct competitor are said to be either cancelling second tower or turning them into rentals. The next day “it’s happening BIG” again. Let’s hear tomorrow’s news. Make sure it’s something humongous.
Posted by: Anonymous at February 20, 2007 6:47 PM
1587 15th Street marketed by Polaris- sold out
Posted by: anon at February 20, 2007 9:20 PM
1587 15th went well because the project is decent and most of all because it is priced low (2 bedroom for mid-high 500k). I’m sure more proper examples at all price levels are all over the city since big things are happening again to SF housing market.... Btw, out of the 24 units in this project, less than half of them are sold. The other half took a check.
Posted by: Anonymous at February 20, 2007 10:39 PM
"1587 15th Street marketed by Polaris- sold out"
Nobody that saw it should be surprised, and one of the 24 units is actually still available - not sure how that works in a "sold out" building.
As an aside, I hope they thanked you guys for the coverage - I only bothered to take a look after you published the pricing/pictures and I have a feeling that I wasn't alone.
Posted by: anon2 at February 20, 2007 10:56 PM
"1587 15th went well...most of all because it is priced low (2 bedroom for mid-high 500k)."
1587 15th units were about $700/SF, a good amount for 15th and Mission Sts. The one unit still for sale on the MLS is $599,000 for 834 square feet.
Obviously, though, there is still a market for well-designed condos in the $600k range.
Posted by: Dan at February 21, 2007 10:22 AM
bottom line- the building sold out or "almost" sold out with one unit left. The developers are smart to hold units as rentals and are likeley doing so because it makes sense for them- not because they could not sell them.
Posted by: anon at February 21, 2007 12:26 PM
Wait a second: "The developers are smart to hold units as rentals and are likeley doing so..."
That makes it sound like they did not actually sell all 24 (or 23) of the units in their "sold out" building. If that is true, and even if it was by choice, it is this kind of "marketing" that reinforces my skepticism of the industry.
Posted by: anon2 at February 21, 2007 2:13 PM
what shall we call buildings that have sold all of the units the developer intends to sell if we can't call them "sold out"?
[Editor's Note: We'd suggest "sold out"...]
Posted by: anon at February 21, 2007 3:04 PM
It's standard for developers to hold onto a few units in a small development. If you build 24, plan to sell 18, then sell 18, how would you characterize the situation? Are you "Sold Out"?
Nobody said that every unit was sold. Maybe every unit that was for sale was sold, one fell out.
Posted by: Anonomouse at February 21, 2007 3:13 PM
Righhhht, now I get it. Next time someone puts up a "sold out" sign, I'll know what to expect...
Some of you agents' comments should be combined into the "one rincon...pushed back" thread. That should put everybody including many freaked out developers into perspective as to where the market is going.
Posted by: Anonymous at February 22, 2007 8:27 PM
Exactly, when you see a sold out sign, you can expect that all the units the developer intends to sell have been sold...
I work with with many San Francisco developers who have been in the bay area developing for the past 30 years. I can't speak for the big One Rincon type players, but the locals aren't afraid of this market at all. They have seen far worse and most are still looking for more projects.
Posted by: anon at February 22, 2007 10:23 PM