According to the San Francisco Association of Realtors (via SFCAHomes Blog), November sales volume for listed single family homes in San Francisco fell 24.9% on a year-over-year basis (175 transactions in 2007 versus 233 transactions in 2006) and dropped 11.6% compared to the month prior (198 transactions in October 2007).
Drops in districts two, four and ten accounted for almost all of the lost volume while district one showed the only (relatively) significant increase (from 13 sales in 11/06 to 22 sales in 11/07). And as was the case last month, expect the DataQuick counts for November to follow suit (in terms of direction).
∙ San Francisco’s November Single Family Home Sales Market Wrap [SFCAHomes Blog]
∙ Listed San Francisco Home Sales Volume Up And Down In October [SocketSite]
I love the “bold” button too.
Out of curiosity, why only SFRs and not condos?
Dude,
Every week the San Francisco Association of Realtors releases a new report. One week will be the Single Family Homes, the next is Condominiums, etc and then the next week is 2-4 unit buildings.
Each week as they are posted they will be at http://stats.sfcondomap.com
The drop in district 10 isn’t surprising – it’s ground zero for subprime in SF. The drop in the Sunset/Parkside and around Twin Peaks will be harder to explain away. If the bottom half of the market is slowing it will eventually drag down the top half as well.
first time buyers trigger 4 more ‘move up’ transactions.
If no one is buying in the ‘entry level’ neighborhoods you can bet it will be felt up that chain.
One of the oldest and “useful-est” adages on Wall Street is that volume declines precede price declines. Count on it.
These may be “entry level” neighborhoods, but so is every other neighborhood. Bang for your buck is the only thing that changes for “entry level” people. When I was looking to buy, 2, 4 and 10 were never in consideration.
Counting….
“One of the oldest and “useful-est” adages on Wall Street is that volume declines precede price declines. Count on it.”
I thought one of the oldest and useful-est adages on WS is that there is a correlation between volume and price, not one precede another.
When is district 4 (it includes Saint Francis Woods, Monterey Heights, and Forest Hill) “entry level”?
John,
“When is district 4 (it includes Saint Francis Woods, Monterey Heights, and Forest Hill) “entry level”?”
Easy. When you are a recent buyer who is increasingly becoming aware that you have just bought right at or very near the top of a massive bubble, well, then EVERY district other than the one you bought in is “entry level”. See? Easy.
BTW, St. Francis Wood, Monterey Heights and Forest Hill have gone down in price since around late 2005 (not too much, but probably around 5-10% on an apples-to-apples comparison), and is probably only “up” in total around 10% since mid-2002 (again on an apples-to-apples basis). The bulk of the real appreciation seems to have occured in the 1999-2002 time period out here.
It begs the question. At this point, which nabe has the greatest bang for the buck? Preferably for under a Mil.
“Easy. When you are a recent buyer who is increasingly becoming aware that you have just bought right at or very near the top of a massive bubble, well, then EVERY district other than the one you bought in is “entry level”. See? Easy.”
The point?
But thank you for this valuable insight.
I am looking forward to getting my “million dollar” SFR for under $500k within 5 years in SF.
November numbers look really good for Noe Valley. More sales, higher prices, and fewer days on the market than Nov. 06. If this is what a bubble-bursting looks like, bring it on!
sanfrantim – For Nov 07, I see 13 total sales in the Noe Valley subdistrict (7 SFH + 6 condos). Total sales for Nov 06 were 37 and the Nov 05 count was 32. Average prices and price/sf were way up YOY – but volume looks WAY down.
Five as a whole was up, tho. Maybe that’s what sanfrantim meant. I was sort of surprised to see that. Six was also up. Way up. But it was seven to two so the sample size was small. Five was 31 to 33.
district 4 is entry level in spots – sunnyside, miraloma park, etc. not forest hill or st francis wood. so, seeing activity taper down there makes sense. a big chunk of 4 is separated from 10 by 280 only.
“These may be “entry level” neighborhoods, but so is every other neighborhood. Bang for your buck is the only thing that changes for “entry level” people. When I was looking to buy, 2, 4 and 10 were never in consideration.”
i think this is true for the majority of sfr buyers. i don’t think a buyer who can’t find a house in district 5 sees sfr in bayview as the next logical option.
Someone please define “entry level” home or buyers…
“Someone please define “entry level” home or buyers…”
Easy. Entry level buyers are the same as first time home buyers. Entry level homes are the homes that entry level buyers close.
Now of course that could still be all over the map. A first time buyer could just saunter into a Sacramento area home at ground level. Any first time buyer limiting themselves to SF proper will need to save up to buy a ladder to get into that door, even in the lower priced districts.
I think that we have a lot of the latter here on SS : willing to save up for the deposit and war chest needed to buy in SF. Waiting, watching, and hoping for an opportunity.
However I don’t quite understand Dude’s comment about each entry level buyer spawning 4 move-ups. Does this mean that the “move up stack” is about 4 levels tall ? As in :
entry level buyer buys $600K home, causing owner to move out and :
buy $900K home causing owner to move out and :
buy $1.2M home causing owner to move out and :
buy $3M home causing owner to move out and :
buy that $25M mansion (of which the previous owner died from overconsumption of fois gras, caviar, and cognac)
If so then I’d think that the real stack would have to be taller than 4 to accommodate those in the middle of the stack moving out but not up for various reasons.
Thanks for clarifying. Yes, my upbeat comments were directed at District 5 generally, not just Noe Valley.
So many misconceptions and so much noise. It may amaze people, but when you come to SF from east coast markets, real estate in this city is still dirt cheap! Many people come here and have purchase of a house include in their relo package, so they don’t care about price. Now in terms of the credit crunch, if you have money, there is no shortage of lenders willing to lend you more money even today. I don’t need a mortgage, but I can get one and at a good rate too.
The obvious thing that SF has going for it is a shortage of supply, particularly of SFRs. Want an SFR in Cole Valley/Ashbury Heights, well there are very few on the market at any time and a lot of people who want and can afford them. Want a less expensive home? There’s more supply in the Sunset and great opportunities for those with less money to get a home in a solid middle class community.
Even for condo developers, if they have not had their final inspections, they are still paying taxes on their old assessments and can wait out a slowdown (and the successful multigeneration real estate families think in terms of fifty year plans and can wait out anything).
“Entry level” buyers is a tough concept because entry level is different things for different people, some people have a lot of savings or have parents willing to help out– their entry level can be quite expensive (For this writer $1.3 was an entry level cash purchase in 2003). Similarly some people make $60G/year and others make $600G and will be searching for very different entry level homes.
What we saw this summer involved a lot of mispricing– the market was robust, but not as strong as some overly optimistic people had hoped for. Naturally, those who underpriced did better. It is straightforward psychology and why auctioneers start low and let thing get bid up– they never open at $50M for a Picasso and work backward, why would you do that with a house? A price over what buyers’ feel fair value to be tells buyers not to bother with a low bid– the seller is not ready to accept that.
There has been much talk here about how SF is a one industry town. Yes, tech is important, but SF has been wooing production work from LA– we’ve got Lucas Film and we have studios on Treasure Island. There has always been a fair number of money managers in town too. And then there are people who make money elsewhere and just decide they want to live here or retire here because of all the wonderful reasons we all love SF.
And don’t discount the attractiveness of SF as a retirement city. We have lots to do, good public transport, a good climate, good health care, and stable tax rates– why not sell your apartment in New York or Boston and move to SF? For affluent east coasters, this is a cheap place to move.
I wouldn’t count on a big pull back in the established upper middle class and affluent neighborhoods– maybe not 20% annual appreciation, but declines that roll us back to the early nineties would be very unlikely… and if we do have that happen, real estate prices will be the least of our worries.
If you are buying a home to live in for ten, fifteen, twenty years, this is a good time to buy. Those of you who want to believe you are going to have a day when you can buy real estate in a coastal city for KC prices need your heads checked.
Anyway, be aware that the only way the fed can fix this problem is to raise rates and which will produce inflation. If they don’t raise rates, we’ll have a falling dollar and hyper-inflation. Take your pick, the price of everything will go up.