Inventory of Active listed single-family homes, condos, and TICs in San Francisco rose 6.1% over the past three weeks and is running 12.9% higher on a year-over-year basis (53% higher versus 2006).
That being said, the plugged-in word on the street is that a significant number of uncounted pocket listings are being circulated (especially in District 7) as agents test the new new market’s waters. And as one plugged-in agent notes, only those homes that have to sell are listed right now (something to keep in mind if you’re making an offer).
The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).
∙ SocketSite’s San Francisco Listed Housing Update: 12/29/08 [SocketSite]
“only those homes that have to sell are on the market right now”
Well, duh.
Looks like we were all wrong on the color of the 2009 curve.
The Milkshake makes but one prediction and it is wrong. Batting 000
[Editor’s Note: Fret not, it’s not final. And now back to the numbers…]
Actually, I think the comment about homes on the market deserves a better than ‘duh’ comment. There has certainly been a significant amount of speculative inventory on the market in previous years. I know of several agents that are flat out recommending to their potential clients to NOT list their homes on the market if they aren’t going to list it at a reasonable price.
There is without a doubt a concerted effort to try to keep inventory low across the SFARMLS and there is an increased use of pocket listing chatter.
So the point is — the homes that are on the market will likely have sellers who are “motivated”. Speaking of motivated sellers: 1821-1823 Lyon St is back on the market.
https://socketsite.com/archives/2008/11/from_very_to_extremely_for_the_seller_decoder_ring_in_t.html#comments
When all of the yearly colored lines make a pretty rainbow, the market will have reached bottom.
I understand the “seasonality” of listings withdrawn in winter, but what the heck is that trough in August/Sept. all about?
Listing #s up + sales #s down = prices down.
Trend listing #s up + trend sales volume down = prices going lower.
That’s about 90% of what there is to know about technical analysis 🙂
I swear it seems like everyone that bought in D7 in the last 5 years or so wants to sell. Every few days I hear about or speak to someone that wants to dump their house. There’s something on pretty practically every block. None of these properties are on the MLS of course…. There’s a fairly even mix of people that need to sell and those that are just hoping it’s not too late.
“what the heck is that trough in August/Sept. all about?”
I think it is Labor Day. Lot’s of people are celebrating the last days of summer and not looking at homes so why list.
sleepiguy — you’re not the only one hearing this btw; and it’s way broader than just buyers in last 5 years. I know of several folks who bought in late 90’s / early 2000’s who are sitting on substantial equity gains that are “thinking of cashing out before it is too late”. Count a few Realtors among that mix too.
WOOHOO!!
Green was my recommended color for the 2009 graph at December 29, 2008 6:49 PM!!
WOOHOO!!
I *heart* SS.
Speaking of technical analysis:
Fully half of all existing homes sold in the Bay Area in December were foreclosures.
[Editor’s Note: And if you want the whole story: San Francisco Recorded Sales Activity In December: Down 17.8% YOY.]
@ eddy and sleepiguy
How can a buyer find out about these pocket listing D7 homes? I have a broker, but he only sends me MLS listings.
Hopefully more of these D7 homes will be placed on the MLS.
Find a new broker.
Pocket listings = overpriced listings the realtor knows will never sell at the delusional seller’s asking price. So the realtor keeps it off the MLS so as not to make the inventory appear too large, and not to let the buyers know that the property has been on the market as long as it has.
Your realtor is doing you a favor: after a while you’d just tell him to stop sending you the pocket listings anyway.
I’m sure once in a blue moon, a pocket listing comes up for a different reason, but I’ve never seen one.
I agree with tipster. I would also add that eventually a lot of them come on the market and at a much lower price than was shown at the “great deal” pocket listing.
Eddy’s right.. I was trying to be a bit more positive, but going back to 99 is probably more accurate.
I just get my info from neighbors and people in the field. Prime D7 is really small after all. Top realtors should know about these pocket listings, but obviously it’s in their best interest to move stuff off the MLS to reduce visible inventory. That said, there’s only a handful of realtors that specialize in D7 and most of them have a website that includes their off-market stuff.
However, I can’t help wondering if some sellers would be willing sell without a realtor right now?
I more or less agree with Tipster as well.. but I think things are changing a bit. I’m sort of guilty of conflating pocket listings with homes that are borderline FSBO. For example, three of my neighbors want to sell and none have a realtor as of yet. I’ve been asked more than once if I know someone, anyone that wants their respective houses.
i’ve noticed some listings lately which are only on craigslist or on the realtor’s personal website, and not on SFARMLS. it’s been said they are trying to keep inventories appear low, but what do the clients of these listings think when their listing is kept off the main search databases for the sake of the ‘market’?
Eddy, my “duh” was agreeing with you, and while somewhat smart ass-ish, was not being quite as much of a smart ass as you are suggesting.
In other words, the “make me move” sellers are gone, and all that’s left are the “I have to move, please buy”, or “I’ve been here forever and I’m going to get what I can while I can” sellers.
Which, in a declining market, is exactly who you would expect to see. I would expect that as the sellers still moderately in denial start to stack up in inventory, eventually the waters will exceed the flood walls, and we’ll see a couple months of relatively quick downward movement in price across the market. It seems self evident that those who don’t have to sell would choose to avoid this situation, hence the “duh”.
I think missionite is spot on with his two groups of sellers. We can debate how significant the “I have to move, please buy” group will be — if, as I suspect, it is large, this will have a substantial, immediate impact on prices because they just have no choice. But we know that the “I’ve been here forever and I’m going to get what I can while I can” group is potentially very, very large. It will be interesting to see what numbers from this category jump in to try to bank some portion of the large run-up that is now disappearing. Again, I suspect it will be a big number as housing equity was the only real retirement account for many people.
eddy – is your impression that these sellers who want to cash out before it is too late are expecting the equity to partially fund their retirement ?
It must be difficult for people nearing retirement who were counting on a substantial equity gain on the sale of their residence as part of their post-salary portfolio to carry them through the next few decades. If you think that it may take 10-15 years for the RE market to recover then this looks like the last chance in your lifetime to cash out. Reverse mortgages won’t be a solution in that scenario either.
Again, I suspect it will be a big number as housing equity was the only real retirement account for many people.
This is huge, I bet there are a large number of house rich, cash poor individuals in SF. Don’t forget about folks who have maxed out the housing ATM and need to get out before the real price drops begin…
Again, I suspect it will be a big number as housing equity was the only real retirement account for many people.
Prop 13 + the credit inflation of 1982-2007 plays a huge role in this, I can guarantee it. It is much easier to live in “too much house” (rather than cash out and downsize) when your taxes are $1000 per year and the place is “worth” $2M. This distortion is going unravel.
If you want to buy in D7 then post an ad on CL stating that you are a qualified buyer looking for an off-market transaction. I am certain that you will find a few emails from home owners.
TMoD — There are people in D7 sitting on potential 300 / 400% returns from 1990 – 1995. Paid 675k — could have sold for for $2.5 – 3M type situations. These people aren’t stupid and would be foolish to consider not selling now; but they also need a home to live in here plus their tax basis and comparable rental homes are non existent. So most of these people are basically stuck. Would love to sell, but really aren’t going to do so.
My “guestimate” is that fewer than 25% of the properties in D7 have changed hands in the past 10 years. This means that ~75% of the owners are sitting on massive potential gains. It’s the 25% of homes (and really only 10-15%) are underwater at the soon-to-be-rapidly-falling home prices in the area.
Watch the market closely and you will find that the properties that are closing and the ones with equity. There are still a few marks out there but we’re going to see some impressive and quality homes hit & test the market and we will find out soon enough just who has the stronger resolve.
meant to say:
Watch the market closely and you will find that the properties that are closing are ones with equity.
To LMRiM — you are correct. 2721 Pacific @ $5M is a classic example of this situation although that place has its own issues with a protected tenant as well. That house is probably worth just north of $3M if it was vacant. But the seller wants max everything and wants the buyer to pretend there isn’t a tenant on the top floor view pent room.
I really don’t expect the “housing equity was the only real retirement account for many people” number of sellers to be as big as suggested.
One mustn’t underestimate the psychological trauma for a seller who owns free & clear to immediately bank a mental six-figure loss off of what they understood they could easily receive at peak price. There’s a boatload of behavioral economics to support the notion that the bulk of such home-owners will ride their gains right back down along the so-called, “slope of hope,” forever awaiting a turn in the market that will bid their home back up to the peak they once enjoyed.
Sellers in the current market are forced sellers, for one reason or another; and their price is being increasingly dictated by “distress” sales, which as earlier posts indicate, represented +50% of the market in December.
The high-end is both starved from below, and starved for “affordable” credit. Because its sellers often have greater stores of wealth, they can postpone markdowns longer. As they have.
But in the Berkeley Hills that I monitor, markdowns are now the undeniable trend.
True, Debpto, but in a world of zero interest rates, retirees are going to be drawing down what savings they have much faster than they anticipated. They are going to be selling assets while they can. If asset prices are falling rapidly, they are going to sell those assets. For many, the overwhelming asset in their retirement plan is their homes.
Although they need a place to live, they can sell and move 20 miles east and live like kings for a very long time.
And most buyers can transfer their low prop 13 property tax basis to a different property if the different property is cheaper (prop 90). That isn’t going to stop them from moving.
I think in a matter of months, it will be a whole new world. The smart ones are about to bail.
I know I’m a broken record about the distortions of prop 13, but I guarantee that 20 years from now someone trying to figure out “why did SF housing prices underperform housing prices generally over the period 2007-2025” will identify prop 13 effects as big factors.
I always laugh when I post something like “Miraloma Park is a lower-middle to average-middle class nighborhood”, and then someone posts all incensed: “We’re professional DINKs, making $250K and we just bought a $1M [attached] house; are we just ‘lower middle class’?” Hint: stop working so much and hanging out with only your circle of friends, and go out and meet your neighbors. Really get a sense of the financial and socioeconomic status of who is living in your neighborhood. You’re going to be surprised.
There is no way that current prices in SF are going to survive the generational turnover in SF. There is simply no way to upgrade the skills of the population so as to raise aggrgegate income to match the prevailing pricing. Something has to give and it is going to be pricing.
(In more normal systems, rising property taxes would force some out, incent others to sell where the property is underutilized, etc.)
Tipster,
In order to avail oneself of Prop. 90 (take yer old prop. 13 tax w/ you) ya gotta move to one of the following counties:
Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara, and Ventura
Not many retiree hot spots here
LMRiM,
My wife and I inherited our home in West Portal and just got hit with the re assesment by
Mr.(S)Ting. Taxes just went up from $680 a year to $9k a year. It’s free and clear but, still, a shake down.
Sunny Jim — did you inherit from parents or grandparents? I’m fairly certain that you also inherit the Prop 13 tax assessment — Prop 58. You might want to fight Phil.
Sunny Jim,
Don’t you get the benefit of Prop 58? My current landlord inherited the house from her dad (who built it himself with his dad – old timers on the block tell us it;s the best built house on the block) and she pays only $1.5K per year on a house “worth” $1.3Mish (well, it used to be worth that when things were selling 🙂 ). You must not have inherited the home from parents (or the other relations specifically mentioned in the Prop 58).
Now that the appreciation game is over, and about 4 of the families on the nearby blocks are visibly stucco’d (4 houses were listed but pulled because the capital losses would have been too big), it’s pretty funny to hear a few recent suckers (er, “happy buyers”) complaining about how the “renters” kids get to go to the school and they pay “like no tax”. LOL.
It belonged to a distant cousin that no one had heard from in about 20 years. We found out about it 2 months before we got married. Had a renter in it for 18 years so, there’s a lot of deferred maintinence. Catholic schools are really the best way to go and it helps when you’re 6 generation SF Irish Catholic. You’re right when you say that CA is ungovernable and a tremendous amount of taxes go to the worst school system. I’m keeping an eye on Balboa Ter and Monterey Hts for properties when the price is right. Any predictions? I’m working on a project that will need higher end residential properties.
I’m keeping an eye on Balboa Ter and Monterey Hts for properties when the price is right. Any predictions? I’m working on a project that will need higher end residential properties.
I really like the location and style of place (check out the garage/basement level) like this one:
http://www.redfin.com/CA/San-Francisco/120-Fernwood-Dr-94127/home/1873596
Fair value IMO is around $700K in current condition, so there’s a ways to go!
(PS – We would have gone the Catholic schools route but our boy missed the age cutoff, and we didn’t want to hold him back because he was ready for school. SF public schools are a joke, but the Tiburon system seems ok.)
I was saying 800k for those hoods but, will defer to the Nostradamus of SF Real Estate. I’d like to find some properties that are coming on to the market for the first time in many years so, if your 1999 price return happens the 600 to 700 will work. Marin school system is really good. San Mateo and Burlingame have really great schools as well. SF’s is just an indoctrination into socialism. I think the kids have to wear red scarves around thier necks.
SF’s is just an indoctrination into socialism. I think the kids have to wear red scarves around thier necks.
LOL. Between the immaculation of Obama, and MLK Day, I thought the Marinfidels who run the Tiburon elementary school were going to go straight to the Rapture. They had a whole module about school desegregation and integration struggles in the 1950s-80s. You’ve just got to love the irony (totally lost on the Marinfidels, btw) that this is going on in an elementary school where there are literally only one or two African American kids (out of 360). An entire “green” module, too, and everyone has a 6,000lb+ SUV (including us). You gotta love it.
I’ve heard liberal people complain that some teachers at the Berkely elementary schools are, like, crazy leftists.
But really, neither Reed, nor SF, or Berkely schools can be more indoctrinatingly liberal than many CA colleges. I’m a product of UCSB and that was quite a lefty millieu. I know other CSU’s and UC’s are the same.
^^^wow. how do you guys celebrate white priveledge day in your household, by the by satchel? ^^^
wow. how do you guys celebrate white priveledge day in your household
Mostly by laughing at the hypocrisy of the “holier than thou” liberals all around us, and as you might imagine, the celebration is practically endless 🙂 As I grew up lower working class/borderline poverty (to parents who never even finished high school) and as the only “privilege” I enjoyed was the brains God gave me, I think we’ve earned that right.
Gotta love anon. Typical lib. I’ve followed enough posts to know that he’s way off, LMRiM. Wealth associated with one race is so stupid. I lived in Atlanta and was very good friends with a former mayor that invited me along to a number of parties in the ultra rich gated communities of local movers and shakers. Oppisite of Blackhawk! Total trip. I was the minority! This mayor was the only Dem beside Sam Nunn I respected. This is getting way off thread but, then again, slow time of year. I went to my old elementary school out in the sunset after it was redone. Really beautiful WPA building with all of the murals intact. Anyway, all of the teachers cars had bumperstickers covering the entire bumpers with anti capitalist slogans. Can’t wait to see their faces when their pensions are all gone! What would the country be like if Goldwater wuld have won in 64?
Sunny Jim wrote:
> Wealth associated with one race is so stupid.
You have to admit that whites have been better than anyone else at accumulating wealth…
> I went to my old elementary school out in the sunset
> after it was redone. Really beautiful WPA building with
> all of the murals intact. Anyway, all of the teachers cars
> had bumper stickers covering the entire bumpers with
> anti capitalist slogans.
I was going to ask if you were related to former SF Mayor “Sunny Jim Rolph”, but since you went to public school in the Sunset I know you are not (Town School is where the SF old money sends young boys).
P.S. It looks like part of ‘Sunny Jim’s” former property in Portola Valley may be for sale now that Jacque Littlefield (a former rich white guy) is dead: http://www.almanacnews.com/news/show_story.php?id=3100
P.P.S. Last time I looked Portola Valley public schools had some of the highest test scores in the state and were the highest in the Bay Area (the public schools I went to came in 2nd)…
Agreed. And it’s not only that the skills of the current population have to be upgraded. The potential areas of growth in the way of high wage employment are all in areas highly susceptible to offshoring and outsourcing. The local economists going around talking about biotech as the next thing are dreaming. Simply put, nobody’s going to pay the people who are currently entering college the equivalent real wages currently being earned by the baby boomers living in million-dollar plus SFHs when they start working. Not going to happen, all the upper management types have read “The World is Flat.”
So prices are going to reset to a lower level and pretty much stay there with low-single digit growth for the foreseeable future. If I were a real estate salesperson, I’d be taking night classes in Mandarin or Hindi.
“only those homes that have to sell are on the market right now”
Maybe this is still true, but 2009 will be the year that the seller who “has” to sell will be replaced by the seller who “wants” to sell before the market plunges further.
Does anyone seriously think that 3 years from now, your house will be worth more than you could sell it for today? 5 years? …Ok maybe in 10 years, I could agree that you’ll see appreciation from today’s prices.
On an adjacent topic, does anyone know have a source to track the number of rental listings? My informal, anecdotal checking of craigslist every day finds the number of listings way up and I am alarmed by the number of places that have been on craigslist for 2-3 months that are now dropping prices.
The rental market has begun it’s implosion…
Whatever the lag, it sure is hitting now in SF. Redfin shows 154 (!!) new MLS listings in the last 24 hours. That’s got to be close to 3 times the total sales so far this entire month. It will be interesting to see how fast and long new listings continue to pour out there and how long the sales freeze-up will continue. But the current trend is accelerating fast.
Wow, Trip, inventory is pouring onto the MLS at the rate of 2 months sales per DAY?
L
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K
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B
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Well, Friday is the traditional day of new listings and other days don’t bring anything close to this number. But it does look like we’re going to see a pretty big buildup in inventory. Some really, really nice places coming on too. 48 of ’em asking over a million bucks and 10 asking over two million. Seriously, how far do you have to go back to find 48/10 sales in these price ranges total — and these all came on in one day.
“I really like the location and style of place (check out the garage/basement level) like this one:
http://www.redfin.com/CA/San-Francisco/120-Fernwood-Dr-94127/home/1873596
Fair value IMO is around $700K in current condition, so there’s a ways to go!”
120 Fernwood closed on the 2/20 for 1.205M, up from a list price of 1.175. You were only off by forty percent or so, fair value baloney salesman.
anonn,
You still don’t understand the difference between an estimate of “fair value” (what a place is worth, based on fundamentals) and a prediction of what it will sell for. I sometimes predict a selling price, and I’ve done pretty well with that (for instance, you may recall my prediction of selling price for your “apple” 3035 25th ave – I predicted $1.2M and it closed at $1.995M – fair value IMO was and is way less than $800K; you were toutingit as an example of appreciation when it was asking $1.429M, lol).
The Bay Area (and SF in particular) is getting its lesson in economics, and every day the population is getting wiser. It takes time, though. Patience, patience. Even you have to admit, a WHOLE lot of imaginary wealth has disappeared in the Bay Area and SF property markets since I first started posting back in November 2007, and I couldn’t be more pleased with how the market is trending towards fair value. Even the speed of the adjustment seems reasonable. Quick enough to be noticeable, but just slow enough for those who bet on appreciation to become increasingly trapped in the assets.
About 120 Fernwood, as I said, it’s a nice place and the kind of place I consider desirable. I’m not surprised it sold quickly, just as I wasn’t surprised that 299 Santa Paula went into contract quickly or that 135 Fernwood is going to cause massive losses for the specuvestor who bought it in 2005. In fairness, every person who buys thinks he is getting a reasonable deal. Only in the fullness of time do we discover if that is true for any particular property. Right now, we are typically witnessing large losses (on average) for the suckers who bought after the end of 2003. A few years from now, I bet that we will see that people buying at today’s prices (only off 10-30% from peak in practically all thedesirable neighborhoods) also way “overpaid”, just as those in 2004-07 did.
Let’s keep watching how this unfolds. I recall last year you were one of the most vocal proponents of the idea that SF as “special” and that it wouldn’t be affected by macro trends. LOL.
Your “fair value” shpiel is just another snarky arrow in your quiver. Whatevs. I personally find it worthless, and will not get sucked into its methodology or lack thereof.
As for me, and “SF is special,” well, clearly it held its value for a great deal longer than other areas around the country, California, and even the Bay Area. Call it what you want.
You’ll also recall that I repeatedly said a change was likely to occur but that it had not happened yet. Time and time again you and others like you pointed to individual sales as signs … and I challenged. I did not say we were immune, only that it hadn’t happened yet. In September I stopped saying that.