Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased just over 21% over the past couple of weeks, a normal December to January bump. Less than 15% of the inventory added over the past couple of weeks was in District 10. And listed inventory continues to run ~23% higher on a year-over-year basis (up ~36% compared to 2006).
Keep in mind, however, that we still haven’t seen the return of a significant number of listings that were withdrawn from the market at the end of last year, and we expect to see a near-term increase in listings for properties that are being sold to fund purchases in either Infinity or One Rincon Hill. And at 1,053 Active listings, we’re running about three months ahead of schedule compared to either 2006 or 2007.
Combined with the downward trend in sales volume, we estimate Months of Listed Inventory has increased about 50% on a year-over-year basis (from 2.1 to an estimated 3.3). And with regard to unlisted inventory, plug in next Monday (1/28) for our Q1 2008 Complete Inventory Index (Cii).
∙ What Happens When It’s Time To Fund? We’ll Have To Wait And See [SocketSite]
∙ Walkthroughs At Infinity: A Chance To Share Your Impressions [SocketSite]
∙ One Rincon Hill: Closings, Walkthroughs, And (Almost) Anything Else [SocketSite]
∙ SocketSite’s San Francisco Listed Housing Inventory Update: 1/02/08 [SocketSite]
∙ San Francisco Sales Activity In December: Down Again (-24.4% YOY) [SocketSite]
∙ SocketSite’s Complete Inventory Index (Cii) [SocketSite]
based on the searches i track, most of the properties that didn’t sell and were withdrawn have been relisted. they all seemed to come back between 1/16 and 1/18 for whatever reason. inventory doubled in my searches over the past 3 days, and it’s all the same properties.
when can we exect an update on the complete inventory index? I no longer trust the MLS and the active inventory list. I think the inventory is much much larger.
[Editor’s Note: “And with regard to unlisted inventory, plug in next Monday (1/28) for our Q1 2008 Complete Inventory Index (Cii).”]
Whether the pulled listings are mostly back on or not, it’s still 25% higher than last year, before the season even starts.
That’s a BIG jump in a year in which a lot of the inventory isn’t even on the MLS in an attempt to manage the numbers. Last year the inventory number wasn’t being “managed” nearly to the same degree, which means the actual increase in inventory is well over 25%.
Wouldn’t looking at inventory as a percent of all units (for sale and not for sale) make much more sense?
Looking at inventory on a unit basis has no meaning whatsoever if new buildings keep getting thrown in the mix. So many new units have been built in certain areas (e.g. South Beach & SOMA) over the last 10 years and will continually be built, so of course the unit inventory will continually and dramatically increase over time.
For example, there were probably 10 times as many units for sale in South Beach at the peak of the market in 200X than there were in a downturn in 198X, simply because there are 10 times more units in the area that did not exist previously.
Keep in mind, however, that we still haven’t seen the return of a significant number of listings that were withdrawn from the market at the end of last year, and we expect to see a near-term increase in listings for properties that are being sold to fund purchases in either Infinity or One Rincon Hill.
Is there any evidence that there will be a significant number of people selling to fund their ORH or Infinity purchases? I would think that would have already happened, considering units are expecting to close pretty soon. I also think many people who bought at the Infinity are buying their second/third/fourth unit. I live in the Metropolitan right now, and I can tell you a number of people who live here have bought at the Infinity (based on the mailings from the Infinity I have seen here).
anon@11:46 – yes it makes more sense to present these numbers as a ratio of the total housing stock. However the denominator in that equation changes so slowly that it is negligible.
Even when ORH and Infinity both open their doors in the same year this is still a tiny part of the total SF market. Yes, it will distort the district stats but not affect the city as a whole very much.
The task of tracking down a monthly up-to-date number for the total housing stock might turn out to be a fool’s errand anyways. You would also need to account for the vacant homes that effectively fall off of the market due to prop 13 bias and subtract that from the total.
Plenty of rincon hill listings on craigslist:
http://sfbay.craigslist.org/sfc/rfs/540738627.html (2 br or 1 br)
different more expensive 2 br
http://sfbay.craigslist.org/sfc/rfs/546033495.html
8 craigslist listings for the metropolitan which is also not a good sign for a 342 unit building
Stock market crashing, Yahoo signaling the beginning of the big valley layoffs… how much longer can “The City” hold out from participating in the real estate crash?
Smug,
The answer to your question is that The City cAn hold out for as long as its residents (at least, those with sufficient funds or credit available) wish to continue paying inflated prices for housing.
When (if) buyer psychology turns against paying $1000/sq. ft. for a condo, then the market will turn. In the end, buyer psychology is the only fundamental that counts …
Just to chime in with Jay, the first craigslist listing I’ve found for The Infinity:
http://sfbay.craigslist.org/sfc/rfs/540434764.html
Anon 11:46am – That is a very good point, and makes a lot of sense. But, i think it is meaningful, that there is more on a YoY basis.
What would be more interesting is what would the inventory be if there were 50% less, or no SOMA new condo listings?
B/c, my friends and I who are looking are seriously frustrated by inventory in District 7, 8 and Cole Valley due to the lack of SFH and condo inventory to choose from. We do not want to buy in SOMA. This is a big paradox many talk about (reported more inventory, but little inventory when you actually look).
Anonny
I agree with you completely, Anonny at January 21, 2008 1:31 PM. I’ve been seriously looking, too, and there really is not much to choose from. Even with the new condos thrown into the mix, the size, quality and price considered, the options are very limited. I don’t want to pay $1M+ to live in a shoebox.
i wonder if the “superbowl” rush will occur.
around the country, most people really list in earnest after the superbowl.
I have anticipated that the inventory will rise significanlty this spring, especially because of the towers that are in last phases of completion.
then we’ll see if there’s really demand for these units or not (obviously i mean demand for these units at these prices)
“with the new condos thrown into the mix, the size, quality and price considered, the options are very limited. I don’t want to pay $1M+ to live in a shoebox.”
And this, in a nutshell, is the problem with SF Real Estate. At some point, no matter how Awesom-o the city… people simply won’t want to pay (or can’t pay) the asking prices.
When (if) buyer psychology turns against paying $1000/sq. ft. for a condo, then the market will turn. In the end, buyer psychology is the only fundamental that counts …
I would think that buyer ability to pay for housing would count for something!
it won’t help that the stock market is crashing of late. Many people lost a LOT of money the last 2 weeks, and it looks like they’re going to lose a lot more.
I find it interesting that people don’t think that anything can effect SF Real Estate. Evidently recession can’t, job losses can’t, stock market falling can’t. tightening of the mortgage market can’t. then what can?
ex SF-er:
I still stand by my first post. What can sink any market is, in the end, buyer psychology. People will willingly, even joyously, take on mortgages whose payments exceed their entire gross pay if they believe that they can enjoy substantial appreciation in the asset and re-finance their way to riches. Ability to pay is simply not a factor in a hyped-up speculative environment like San Francisco.
Ability to pay, availability of credit, cost of borrowing, none of that really matters unless buyers choose to let it matter. So far that’s not been the case anywhere in this city… perhaps the tide is turning somewhere out over those eastern mountains across the bay… but not around here.
Milkshake, I agree that on a citywide basis it doesn’t matter that much but looking at inventory on a neighborhood basis…considering the new construction is hugely important. Think of the buildings that have been added to a couple of neighborhoods since around the year 2000:
188 King
200 Brannan
200 Townsend
255 Berry
Bluxome Lofts
Federal Alley Lofts
Glassworks
Hawthorne Place
Yerba Buena Lofts
One Embarcadero South
170 Off Third
The Brannan
The Four Seasons
St. Regis
The Metropolitan
199 New Montgomery
Watermark
235 Berry
The Beacon
And of course thousands more units are in the pipeline. So, in general, inventories in certain districts are going to keep rising for almost forever as more units are built, purchased and resold.
It would be much more meaningful to exlcude all 2007 units when comparing to the 2006 level. And exclude all 2006 and 2007 units when comparing to 2005.
“Stock market crashing, Yahoo signaling the beginning of the big valley layoffs… how much longer can “The City” hold out from participating in the real estate crash?”
Futures are showing that the Dow will open down more than 500 points tomorrow, with the NASDAQ down roughly 100. Asian markets are crashing again, now off 20-30% off their respective highs. India and China are imploding. Unless the Fed can pull a rabbit out of its hat (highly doubtful), I think we are all going to find out how long SF can hold out in fairly short order. The next few years should be quite a show.
And now back to inventory, listings, or even the impact of new construction…
Even though there are new developments coming to the market, the overall market is affected by inventory. Simply more supply. I agree that it would be nice to show the inventory per district(I think the article already mentions that). So, if you are looking in SOMA, you might have 50% more inventory than last yr (new or old) and so more supply with same or less demand.
Gee, please delete all my comments. Thanks.
[Editor’s Note: Sorry Jimmy, and please don’t take it personally, but a question about alternative investment strategies might be better suited for another post. And if you can’t find one by searching the site tonight, we promise that you’ll find one in the morning.]
Again, I do believe this could be a buyers market for SOMA condos given the new supply. However, it is case by case, and what one perceives as value? You see some $1,100-$1,600/sqft condos in SOMA, and someone might think buying at $900-$1,000/sqft is good value. I’m just perplexed by those figures, given the new supply.
I guess one has to think the majority of buyers now are not flippers, and plan to live and hold for a while, which is good longer term.
Anybody think people will pull money out of the Stock Market, which is indicating down 3-4% tomorrow, and putting it back into real esate in 2008, esp given rates are coming down?
O, does everybody just hold cash?
“Anybody think people will pull money out of the Stock Market, which is indicating down 3-4% tomorrow, and putting it back into real esate in 2008, esp given rates are coming down?”
Oh absolutely. I will pull out tomorrow and put my money into SF real estate where it will go down 20-30% in the next 5 years. Sounds like a good deal to me.
I think you are going to see a significant spike in inventory as investors have to back out of contracts in some of these condo towers.
We are in the midst of a serious financial crisis– SF and Manhattan are the last to be affected. But between banks in jeopardy, rising job losses, lending restrictions and new supply, there will be a lot to choose from…
Watch the movie Wall Street. It illustrates the property bust in Manhattan after the late 80s market crash. We could see a repeat in SF and Manhattan when high paying financial and tech jobs are cut back in a big way.
Agreed. And something tells me that a worldwide stock market crash might put a little dent in the supposed rush of foreign buyers coming to rescue SF and NY property values.
The movie Wall Street says nothing re real estate. The only part that pertains to real estate is the part where Charlie buys a condo. Thanks though smug.
Yes, and then he has to sell it at a loss after the market takes a dive. Regardless, that dive in property values really did happen in Manhattan.
Dataquick has the 4th Q ’07 California foreclosure data posted. Good news — SF only saw its numbers for notices of default go up YOY by 93% (among the better showings — 334 for the quarter, up from 173). This statistic is notable: “Of the homeowners in default, an estimated 41 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 71 percent.”
Buyers are way down, and supply is up (and going higher apparently). I’m really curious to hear why anyone would be buying right now when the writing on the wall is now becoming so undeniably apparent. Why not just wait a bit until things come down even farther?
Trip, not all buyers are rational! This has been proven time and time again for centuries. All it takes is one buyer to set a price and the number of non-buyers is totally irrelevant.
BTW, just look at condos & lofts for sale in SoMa and SoBe right now. I have watched units for sale every week for the last 5+ years and we are at pretty average inventory levels right now. Many buildings continue to have only one or even zero units for sale, yes, ZERO.
anon 2:45 — you are absolutely right, of course. I was just wondering if anyone would be willing to provide some rational basis!
By the way, I have no idea what SOMA numbers have been like for the last 5 years, but current data (as of 1/20) indicate 55 condos on the market, a median of $599k, and average DOM of 97 days.
Trip, the 55 condos of which you speak must be jr. 1 BRs or 1 BRs. None of the 2/2 condos I have looked at have been close to or even below $800k … at least not where I don’t have to wear Kevlar. 😛