April 24, 2007
JustQuotes: What’s Perception And What’s Reality In Realty?
"Buyers come to us and are obviously very distressed when we tell them they're going to have to compete against quite a few people to purchase any property that is exceptional," [agent Peter Goss] said. "That's not the perception that one has. The perception that one has is very different.
"Last year's big story was the housing bubble. People finally got to the point here of realizing, 'You know what? This isn't happening here.' Now you pick up the paper and what's the story? It's the subprime market problems. That's this year's story. Here again, there are so few subprime loans in San Francisco -- it's a very different situation here than in other Bay Area cities." (Picking Up Steam)
∙ Picking Up Steam [SFGate]
First Published: April 24, 2007 4:00 AM
Comments from "Plugged In" Readers
so the reporter went to a meeting with a bunch of real estate agents and was told 'it's always sunny in the Castro' and she reported just that.
To bad the reporter didn't dig into any facts and find that for San Francisco the median sales price is negative, the case shiller index is negative, sales volume is negative, and foreclosures and inventory is growing.
This story wouldn't be so annoying if anywhere the reporter had used some facts or information that didn't come directly from a RE agent.
Obviously some neighborhoods in SF, as in any city, are very desirable places to live and ride out a downturn better then others.
But come on this article reads like a CAR press release.
Posted by: badlydrawnbear at April 24, 2007 5:45 AM
to my point ...
SF Median -2.1%
Case Shiller Index for San Francisco - 1.4%
CA Foreclosure Activity Jumps: SF +67.4%
Posted by: badlydrawnbear at April 24, 2007 5:59 AM
Sorry, latest CSI posted today SF -2.2%
and just released ... Nationally Exist home sales down (8.4%) in all four regions
Posted by: badlydrawnbear at April 24, 2007 7:36 AM
Agreed with you on all accounts, bear, but those of us looking at the numbers are overlooking the impact that psychology has on the market. Schiller has written profusely on the topic; until the bulk of market participants get bearish on the asset, prices will likely continue to trend up regardless of fundamentals. Keynes summed it up best when he said, "Markets can remain irrational longer than you can remain solvent."
So it's partly perception. $2MM+ trophy properties keep selling, people selling properties they bought 5 years ago are still rolling $300K in equity, etc. Quote these stats and people infer that the market is healthy. But the market for first-time buyers and people making average SF wages is pretty weak from what I've seen, with little appreciation since late '05/early '06.
I expect mass perception to change once the median has been negative a few months in a row and the media gets the word out. Additionally, once east bay prices take a decent hit, watch prices in the city follow as the extra commute becomes more attractive. Just my predictions.
Posted by: Dude at April 24, 2007 8:26 AM
Come on... the old staying of Location, Location, Location holds true. I'm in a prime location and have not seen a dip at all. Buying in a bad location just to get in the market is just that - bad.
Just because we are in SF and there was a rise does not mean that you can buy any old shack and expect a rise - as the people in those situations are the ones who are under-indexing as their values were inflated. Not the case for prime locations.
Posted by: kristian at April 24, 2007 8:26 AM
Too bad the reporter didn't dig into any facts and find that for San Francisco the median sales price is negative, the case shiller index is negative, sales volume is negative, and foreclosures and inventory is growing
Some reporters (not unlike many RE agents) are just too lazy to do any real work; why bother digging deeper and presenting a more balanced report when a press-release (or broker's office cheerleading) provides enough material to fill up the space?
The Chronicle does have some good RE reporters like Carol Lloyd, but obviously also a lot of not-so-good ones like the folks who wrote this story or the coverage on solar panels the previous week (another PR piece - was it paid for by the solar industry) or the one on Eichler homes some months ago
Posted by: TrailerTrash at April 24, 2007 8:32 AM
Have you noticed that Carol Lloyd's articles no longer appear in the Real Estate section, but in the Business section of the Chronicle? Maybe Socketsite could do some digging to see whether this is related to her article(s) a couple of months ago that were extremely critical of the real estate industry?... inquiring minds would like to know.
As to the determination of bubbles not to burst, I like The Economist's saying, namely that "financial bubbles always last longer than anyone imagines possible, but they all do burst eventually".
Posted by: Amen Corner at April 24, 2007 8:44 AM
The Chronicle should be ashamed of this puff piece. Where is the systematic evidence concerning the market in SF? The Chron must be under enormous pressure from the advertizers (e.g., real estate companies, mortgage brokers, furniture peddlers) to do whatever they can to try to change the market. Well, markets are not so easily manipulated in the face of profligate lending, massive oversupply of new houses, desperate debtors facing resets, and wall steet investors demanding more accountability from mortgage lenders and the rest. The whole article smacks of desperation and those poor sops at Zepher forced into public displays of over-earnest cheerleading.
Posted by: Christopher Carrington at April 24, 2007 9:32 AM
Out of a room of 140 sales agents, they're likely to find some success stories...it was, after all, a sales meeting. Everything I'm hearing says that mortgage origination activity is way down. Perhaps the author should have talked to some mortgage brokers about how their business is going.
To echo AmenCorner, the article represents either lazy reporting or intentional boosterism.
Posted by: SFAnalyst at April 24, 2007 9:33 AM
Aaaahhh, it's so nice and refreshing to see that the SocketSite readers/followers have a mind of their own and don't believe everything they see or hear.
[Editor’s Note: And we’d expect nothing less.]
Posted by: Sexy & Sassy in SF at April 24, 2007 10:02 AM
you know the reporter really could have used the story to point out what a good RE agent can do for you (price the home right, make sure it shows well, marketing it to the right buyers) thus getting your home sold, even in a slow market, and earning their commission.
Instead the story seemed to be more about how all this talk of a housing bubble is just nonsense and SF is just fine, prices never go down (even when the CSI and Medians are falling), and everyone wants to live here!
Posted by: badlydrawnbear at April 24, 2007 10:54 AM
My home in SF where I've lived for 4 years just went into contract. I showed it one time and received an offer for a million more than I paid for it. I have absolutely no complaints about the housing market.
Posted by: Medusa at April 24, 2007 2:28 PM
And my home just went up 2 million in 8 years. Everything is wonderful with the world.
Posted by: anonymous at April 24, 2007 3:34 PM
All of you are correct. I am a real estate agent in SF. I do not work for Zephyr. There are some properties receiving many many offers and being bid considerably higher than asking price. They tend to be priced at or at 95% of market price as defined by an accurate statistical analysis of data. The fast paced sales environment tends to be in single family homes below $2,000,000, and in traditional SF flats (condos and not TIC). All neighbhorhoods are getting multiple bidding from Bayview to Pacific Heights. Most properties receiving lots of interest show well by either professional staging or a thorough cleaning, decluttering, etc.
There are quite a few buyers out there looking. BUT buyers are of a different mindset than the peak in 2005. They want value, they are not panicked and and are willing to look for the right place. The issue is the "right" place is that for everyone and thus garners multiple offers.
Want a deal or feel that you should not pay asking. But new construction in SOMA or South Beach. But don't be surprised if your condo value is the same in 3-5 years when you want to sell. Look at houses that have been on the market for more than 2-3 weeks. Have a good agent who knows the skills of negotiation and negotiate a fair deal. You are not going to get a "steal" but you will be happy in a few years with your good deal !
Posted by: john doe at April 24, 2007 5:30 PM