New listings continued to outnumber new sales over the past two weeks in San Francisco as inventory of Active single family, condo, and TIC listings increased 3.4% (and has closed to within 1% of last year’s levels).
And as winter months are typically characterized by a general slow down in activity (both sales and new listings) along with the withdrawal of listings by those under no pressure to sell, we’ll be watching inventory levels over the next couple of months for any early signs of increased urgency in the market.
∙ SocketSite’s San Francisco Listed Housing Inventory Update: 10/1/07 [SocketSite]
does this change the months of supply? I believe last month we were at 5.5.
Sales volume for SFH, condos and TICs was 345 for Sep 07. Volume for the first week of Oct (Oct 1 – 7) stands at 81. (Last week’s volume stands at only 53 at the moment – but that will grow as more reportings are made.) So at about 350(+/-) for the month, the active inventory represents about 4.5 months of supply. Here are sales volumes for some prior periods: Sep06 – 486, Oct06 – 494, Nov06 – 525, Average Month 2006 – 493, Sep05 – 511, Oct05 – 570, Nov05 – 551. Average month 2005 – 546.
Urgency? Quick, somebody send a “short sale specialist” to Bayview and make sure that the pale rider does not escape to greater Ess Eff…
And I saw when the Lamb opened one of the seals, and I heard, as it were the noise of thunder, David Lereah saying, Come and see.
And I saw, and behold a white horse: and he that sat on him had The Exemption; and two hundred fifty thousand dollars was given unto him: and he went forth conquering, and to conquer.
And when he had opened the second seal, I heard Lew Ranieri say, Come and see.
And there went out another horse that was red: and power was given to him to securitize mortgages, and that they should leverage CDOs: and there was given unto him a great sword called the rate reset.
And when he had opened the third seal, I heard Robert Shiller say, Come and see. And I beheld, and saw a black horse; and he that sat on him had the Fed funds rate in his hand.
And I heard Alan Greenspan in the midst of the National Association of Realtors say, a measure of abundant liquidity for a penny, and three measures of low risk premiums for a penny; and see thou hurt not the oil and the gold.
And when he had opened the fourth seal, I heard the voice of Chris Thornberg say, Come and see.
And I looked, and behold a pale horse: and his name that sat on him was Fraud, and Casey Serin followed with him. And power was given unto them over multiple primary residences, to inflate with false appraisals, and with negative amortization, and with no money down, and with low initial rates.
I would think that 4.5 months of supply would be exerting some real downward pressure on prices – especially since the norm used to be only about 1.5 – 2 months. But, it’s still a heck of a lot lower than the 2 – 3 YEARS of supply that some CA counties are now experiencing. (Some areas in Florida have a 40-month supply.)
“somebody send a “short sale specialist” to Bayview”
Anyone catch the foreclosure article in today’s Chronicle? Foreclosures/NODs in the bay area are up (no news there) but seems it’s finally creeping into the city. Would be great to see YOY data if anyone has it. Seems even some millionaires in the Marina may be behind on their mortgages.
Regarding months of supply, if DQ’s info is accurate, there were some zip codes in the city which had no sales at all in July or August….?
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/10/14/RESANFRAN.DTL
If you think 2 months of inventory is the “norm”, you have a very short memory. 4.5 months is pretty neutral for pricing, all the way up to about 6 months.
After that, people start to panic, and prices begin to come down. But slowly, so slowly, at first.
Until you see about 10 months of inventory, expect prices to not vary too much. At best, they’ll slide flat for a few months.
Going to be an interesting winter, as the areas to the east and north of SF Bay finally start to tank.
At mid month for single family homes (don’t hate me, this is what I follow) here is what’s happening. Judging by the amount already sold, 68, and pending, 187, October should easily surpass September’s sales total of 151 sales.
Interesting that inventory is still not ballooning more than last year’s levels. Does this mean there is growing pent up demand, and the longer we are at these low sales levels, and relatively low inventory levels that there could be surge in prices again? Perhaps not in places like Antioch, Bay View, etc… but, something to think about.
Inventory levels have nothing do with with demand, just supply. Also, of course, this is just MLS-listed supply. See this site’s CII for the real supply numbers.
Dude – Here are the sales by zip code. Column 1 is Condo/TIC sales for Jul&Aug, Column 2 is Condo/TIC sales for Sep-Oct15, Column 3 is SFH sales for Jul&Aug, Column 4 is SFH sales for Sep-Oct15:
94102 11 6 1 –
94103 34 11 – –
94104 – – – –
94105 20 11 – –
94107 59 33 11 3
94108 8 2 – –
94109 65 23 3 2
94110 54 25 35 15
94111 10 4 – –
94112 1 – 50 33
94114 47 21 27 16
94115 33 25 6 6
94116 1 – 52 14
94117 56 20 10 1
94118 32 22 10 5
94121 9 4 21 18
94122 8 8 41 25
94123 26 14 6 3
94124 7 4 16 14
94127 4 – 45 26
94129 – 1 – –
94131 21 10 40 12
94132 11 4 26 7
94133 22 10 1 1
94134 2 2 22 18
94158 6 3 – –
Total 547 263 423 219
Here is the zip code table for SF:
94102 Hayes Valley, Tenderloin, North of Market
94103 South of Market (SoMa)
94104 Financial District
94105 Embarcadero (south) & SoMa
94107 Potrero Hill
94108 Chinatown
94109 Nob Hill, Russian Hill
94110 Mission, Bernal Heights
94111 Embarcadero, Barbary Coast
94112 Ingelside-Excelsior
94114 Castro, Noe Valley
94115 Pacific Heights, Western Addition
94116 Outer Sunset
94117 Haight Ashbury & Cole Valley
94118 Inner Richmond
94121 Outer Richmond
94122 Inner Sunset
94123 Marina, Cow Hollow
94124 Bayview
94127 St. Francis Wood, West Portal
94129 Presidio
94131 Twin Peaks, Glen Park
94132 Lake Merced
94133 North Beach, Fisherman’s Wharf
94134 Visitacion Valley
94158 Mission Bay
I agree that 4.5 months of supply doesn’t indicate panic selling. I am surprised that inventory isn’t at least a little higher. What if the 30% drop in demand is permanent – given the current credit market and at current price levels. Will suppy remain constrained to keep prices at current levels or must prices drop?
As a sidelined buyer, I understand the point made earlier that the low supply and sales could still ignite higher prices. If prices start running up again, I find it unlikely I’d chase them at this point. We can’t be too far from the point at which I and others ask if living in SF (or Manhattan) proper is truly worth taking on all the additional debt. This may leave the best neighborhoods only for those willing to take that risk or for those with enough money that it doesn’t matter. How big can that pool be? My impression is that this city is still full of many people living on the debt edge and financing lifestyles with equity gains. That same population is aging and must become retirement focused at some point too. You have to buy in to the superstar cities theory to believe that prices can take another big leg up. That seems to be the latest story for the bulls.
I agree, mktwatcher. But I’m indifferent at this point. I plan to buy in 2009. If prices in the city aren’t markedly lower by then, I have no qualms about moving to the east bay, where they’re definitely coming down and my $ will go about twice as far.
Same here dude.
Although an upcoming family addition may cause us to head to the East Bay in the summer months instead of waiting til 09. I have been searching and seeing some great value already.
East bay may be great for families and offer a good value……..otherwise, no comparison to SF in terms of amenities and commute times. I can’t imagine spending an hour each way commuting when I can now be at work in 10 min. And that cross-bay commute time is only going to get worse. For people who both work and live outside of SF in the Bay Area, that may be convenient, but I really don’t see the point. Might as well live anywhere else in CA or the US.
ummmmm… the commute from the East Bay is not an hour. My commute, from my front door to the lobby of my building averages 20 minutes. And the amenities are quite good, have you seen Oakland’s new Whole Foods, the new Trader Joe’s, Peets, etc. that I can walk to….. and the restaurant scene is hot and getting hotter. Read this month’s SF Magazine….. the east bay is not exile. Come drive around Crocker Highlands, up Longridge, down Trestle Glen and all the streets in the area. It’s exquisite and 20 minutes from downtown.
Let’s be realistic. Ever commute in from the Richmond on the 38 Geary or the 1 Cali? Ever commute in from Sunset or Parkside on the N or L?
These are all 40+ minute commutes. Comparable to the BART ride to Walnut Creek. So if I’m in the market for an SFR, I can spend $900K in Richmond and have a 45 minute commute (and live in fog), or spend $600K in Walnut Creek, have better weather, and add only 10-15 minutes to my commute for a savings of $300K and a bigger place.
I would agree with you if SF had a viable transportation system that covered the entire city. But given the average speed of Muni is like 8 mph, that commute advantage doesn’t apply once you get out of the central SF neighborhoods.
But I admit you do give up a lot of the amenities by going to the east bay. But then again, if I pay $300K more to stay in the city, where am I going to find the extra money to enjoy those amenities anyway?
As long as we’re sharing data, I have a script that follows the Chron’s home sale data posted at http://www.sfgate.com/homesales and computes volume, median and average prices. What surprises me is how steady sales volume (and prices, for that matter) has been though the credit crunch thus far. The data does confirm that low-end sales are nearly nonexistent as illustrated by the high median and average prices.
I know that sales reported on sfgate aren’t complete (e.g. 170 Off Third sales don’t show up, but the Berry condo sales do. Anyone know why?) so take it for what it’s worth. I also have little idea how much of a lag there is from closing until a sale shows up on sfgate, but it seems fairly low.
My guess is that the credit crunch just hasn’t affected SF city/county much (yet?) because of relative affluence and the availability of cheap loans despite hysteria to the contrary. Sure, big lenders like Wells have tightened lending standards and have insane jumbo interest rates, but I’m pre-approved through my credit union for a jumbo 10/1 IO at 6 3/8% with the same underwriting standards as always (it holds its own loans so it knows the risk it’s taking on). Only a matter of time until other lenders follow suit?
Gdog – Very interesting… how were you able to pull the data from SFgate? You didn’t really key everything into a database by hand? that’s a lot of typing…..
My girlfriend lives in Rockridge, and I have to say I think her neighborhood has more amenities than many neighborhoods in the city at the moment. I actually enjoy spending time with her in Rockridge, and have found that I like buying groceries at Market Hall better than Whole Foods on California (which has the nastiest most competitive parking garage in California). BTW, her commute on Bart to Montgomery St. is less time than my morning commute on Muni to the same location on many days. She bought her craftsman cottage for about the same price as my 2bd condo. and she has a yard, sunshine and a garge as well as very friendly neighbors.
for whatever reason, there is still a big bias against the East Bay among people west of the Bay Bridge, which is reflected in the property values.
Part of it is that the commute to Silicon Valley is considerably longer from the east bay, but alot of it is plain snobbery.
I think a number of SF/Peninsula people just view the East Bay the same way New Yorkers view Brooklyn/Queens or even New Jersey.
I’d rather live in Montclair than Belmont, but many of my friends would never consider the east bay under any circumstances. Go figure.
In my 11 years in SF, the East bay has been something that I pass through on the way to Tahoe.
Or a place where I go to see the Warriors play. I can count on my hands the number of times I ahve been there. I think part of the reason is because there is no real reason to leave SF.
Nothing agaisnt the East Bay. I can say the same for San Jose. I ahve only been there once.
The point is that while there will always be some number of people who will only live in SF, the relevant housing market is much broader. Prices in Marin, the east bay, and the peninsula will always discipline prices in SF. If the disconnect in prices increases too much, people will leave SF and buy in the surrounding areas, which will result in lower demand and price drops in SF. SF is not an island.
And people wonder why San Franciscans are thought of as being so provincial! “No real reason to leave S.F.”?? Really?
How about Chez Panisse, the home of the cooking style that all S.F. restaurants now use as inspiration? It is the first place my out of town guests who come to S.F. want to go. Or the fact that Peets started in Berkeley as well as probably the best wine and cheese stores in the bay area. I happen to love the craftsman homes of Julia Morgan and Bernard Maybeck in the Oakland/Berkeley hills far more than Soma stucco press-on-brick condos, but I guess I am missing the joy of walking down Howard or Folsom? I live in S.F. but I think there are just as many great walkable neighborhoods in Rockridge, Montclair, and Berkeley as there are in many hoods in the city.
Gdog,
Great post, and fun data. Glad you did it, and thank you for doing so.
I’m not sure the data is showing what you think it does. When you graph it there is a visually apparent decline in the moving average. For example the average of the first six median prices is $897,166. The average of the last six median prices is $821,666.
That’s an 8.5% drop, during a time when the market has supposedly bifurcated and we would expect to see a rising median price.
“When you graph it there is a visually apparent decline in the moving average. For example the average of the first six median prices is $897,166. The average of the last six median prices is $821,666. That’s an 8.5% drop, during a time when the market has supposedly bifurcated and we would expect to see a rising median price.”
Granted, but there was a blip in June/July that you’re comparing against. If you go back further, prices are surprisingly (to me) flat all the way back to spring 2005. In the interest of not cluttering the comments section I didn’t post all the data I collected. To me, what’s more surprising than price movement is that the sales volume seems pegged to about 100/week for the last few months. I expected some sort of significant decline in recent weeks, but although much lower than in recent years it’s just not there.
I should run my script on Alameda and CC counties to see if there’s a more apparent credit crunch effect across the bay.
And anecdotally, I’m surprised at how things are moving here in SF. A few weeks back I walked through 379 Church #301, and after being on the market for less than 2 weeks it’s already in contract. Listed at $769,000 for about 780 sq. ft. that’s $/sqft in the ballpark of 1 Rincon! Looking forward to seeing what it actually goes for.
379 Church #301 sold for $651K back in Aug 05. It looks like they plugged in some stainless steel kitchen appliances and a granite countertop – but apparently not much else was done. So an 18% increase (or more?) on top of the 2005 prices! At least their HOA dues have stayed constant at $285 per month. Doesn’t look like a great value from the pictures – how does it show?
If this unit goes for over asking, it indicates that there is still a lot of demand (and froth) in this market.
“Doesn’t look like a great value from the pictures – how does it show?”
It was nice but felt slightly dated. There’s no hiding the fact it’s very small for a 2 BR, although the floor plan was good. Nice location, but Church St. can be noisy — I’d much rather not be right on a major road. New condos seem like a better value to me.