March 29, 2010
SocketSite's San Francisco Listed Housing Inventory: 3/29/10
Inventory of Active listed single-family homes, condos, and TICs in San Francisco rose 6% over the past two weeks versus an average of 4% for the same two weeks over the past four years.
Current inventory levels are down 15% on a year-over-year basis but up 14% versus the average of the past four years (up 24% if you exclude 2009) and up 46% as compared to 2006. Inventory of single-family homes in San Francisco is down 14% on a year-over-year basis but up 49% versus 2007 (even versus 2008, we don't have the split for 2006).
29% of active listings in San Francisco have undergone at least one price reduction with the percentage of active listings that are either already bank owned (60) or seeking a short sale (124) holding steady at 13% over the past two weeks (up 4% in absolute terms).
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 Inventory: 3/15/10 [SocketSite.com]
∙ Will Pent-Up Demand Outstrip Pent-Up Supply? [SocketSite]
First Published: March 29, 2010 11:45 AM
Comments from "Plugged In" Readers
Hard to read where we'll go from here.
Definitely the stretch between the end of '08 and the beginning of '09 at this point looks like the anomaly, with panic in the street and inventory sitting there.
Mid-2009 demand picked up especially in the Personally waiting for interest rates to move up and put some pressure on prices, might have to wait awhile though.
Posted by: il_guru at March 29, 2010 1:12 PM
inventory is up, but days on market is dropping like a rock. Seems that there are more than enough buyers out there to counter the increase in inventory.
and, DOM will lag current market dynamics because it will be skewed by the low quality houses that have sat on the market for 400 days -- but even some of those are starting to get snatched up, which is helping DOM to drop quickly...
remember: inventory is only part of a dynamic system -- absolute levels of inventory are meaningless data without also understanding the rate at which houses are being purchased.
[Editor’s Note: Not quite. A change in first quarter DOM speaks more to the typical ebb and flow of listing behavior as unsold listings are withdrawn at the end of the year and new or re-listed listings appear in the new year.
The statistic to which you most likely mean to allude is "months of inventory" or rate of absorption. If so, we might suggest sticking to year-over-year comparisons as seasonality is in play. And regardless, we'll run the absorption stats as soon as we have listed sales figures for March.]
Posted by: Big V at March 29, 2010 2:37 PM
DOM always drops like a rock in the beginning of the year, because things are de-listed over the holidays and relisted in the spring, right? But the graphs in the paragon link show what could be a greater than normal "dropping like a rock". I guess time (and sales data) will show if this is in fact a real upturn. I'm not sure that I can tell from the data, but I'm not in the market.
Posted by: curmudgeon at March 29, 2010 2:52 PM
big V, I thought there there was a consensus even among the SS crowd that of all industry statistics the DOM was the most manipulated and deceiving number, not to be taken seriously
if that's your telltale sign of a change in the market... I have a red bridge to sell you
Posted by: asiagoSF at March 29, 2010 2:59 PM
Big V, the DOM numbers on the chart you linked to are "dropping like a rock" specifically because so much new inventory is coming onto the market. The average DOM drops with all the "1 DOM" additions. If there were loads of buyers you would not see the inventory levels jumping on either the Altos or the SS versions of these charts -- but they are. Nor would you see the continuing declining trendline in $/sf, which is probably the clearest indicator of things on your chart (note the seasonal impact on that line -- always rises a bit as higher-end places get listed in the Spring, but not so much this year).
Posted by: A.T. at March 29, 2010 3:01 PM
What about the multi unit TIC’s? Is it as bad as I am told? That they are nearly illiquid assets because it takes so long to convert them to condos and they sit on the market forever? I saw a really great one last week and I am contemplating buying. It is priced like a condo – should I expect to make a great deal on it ( such as %15 less then a condo or should I stay away all together?
Thanks for the input!
Posted by: SF Newbie at March 29, 2010 3:51 PM
SF Newbie if you want to buy today I would go with a condo. There a re a lot of risks with a TIC (including that the "Progressive" SF City Council may ban all TIC to Condo conversions). The main reason I would stay away from a TIC is that it will probably be a lot harder to get a loan on one down the road if you don't go condo and you may have to dump it at a huge loss if you want to move.
Posted by: FormerAptBroker at March 29, 2010 4:42 PM
Why do we continually compare to 2006, 2007, etc. Those were, as we all know, unusual years. We should always be comparing to the most recent year as a gauge of activity. For example, if you follow the stock market, they look at the last 12-month high. Every report you read is Dow up (or down) x% over the past 12 months, or that the Dow has reached a new high, again reference to 12 months.
If SS are going to constantly compare to 2007, why not bring in data from 1997? Seriously...
Posted by: SFRE at March 29, 2010 4:54 PM
A lot of posters want to talk about 2006 and 2007 even though it's two markets removed at this stage. The reason is obvious.
Posted by: anonn at March 29, 2010 4:59 PM
Every report you read is Dow up (or down) x% over the past 12 months, or that the Dow has reached a new high, again reference to 12 months.
Only reports from CNBC shills and other market boosters who are trying to get you to buy stocks. I personally look at metrics over more than one time series such as over 1 year, 2-5 years, 10 years, etc depending on the market being studied and the metric I'm using.
If you look at a prospectus, it usually will list out returns over the last 1 year, 5 years and 10 years, and sometimes over the life of the fund/offering, so I disagree with your assertion anyway.
I think it is slightly misleading to compare 2010 only to 2009, which was "Armageddon time" and also slightly misleading to only compare to 2006-7 which was peak bubble time.
I feel the editor was relatively open minded, as s/he showed comparisons to 2009 and 2006-7.
the problem is that too many people use 2005 RE as a "normal" market when it was anything but. now some people are trying to make 2009 into a "normal" year, but again it was anything but.
when one looks over the time sequence I think we get a fair representation of what's going on. The market is nowhere near as good as 2006-7 and not as bad as 2009. The current market is quite poor, one of the worse ones in the last decade, possibly even the last 15-20 years. however, comopared to 2009 which was the worst in 20 years it's looking positively rosy.
all that said, I'm still waiting for May and June's numbers (which will come out in June/July/August) because those are the first data points after SOME govt intervention is withdrawn. (there is still much stealth intervention).
FWIW: DOM is a useless stat. It is so manipulated by the various SF realtors that it is meaningless. I like inventory and sales info better.
Posted by: ex SF-er at March 29, 2010 5:39 PM
Didn't all the bulls say that it was all good even in 2009. Or for that matter all years. So, what's wrong with compaing multiple years.
Whoever looks at 1 yr data for any market direction, doesn't know how the market works.
Agreed, who cares about. DOM anymore? They have no value, as they represent nothing.
Posted by: Sfinvestor at March 29, 2010 6:00 PM
A couple of posters want you to forget 2006 and 2007 low inventory. Sure they do.
I don't follow their logic. Early 2006 was still bubble time in SF. 2007 was also a great year for prices. But they won't dismiss 2008 because prices were even better. Why would they want to dismiss inventory without dismissing prices as well?
I'll tell you why: they're reading the data with the attention span of a 3-year old. Dismiss this and that from a chart to make your point without looking further than the point you want to make. Like how high inventory is usually followed by lower prices.
Sure 2006 was a fluke. But 2007, 2008, 2009 were also flukes. Each and every year is a fluke. Changing the yardstick doesn't change the trend.
Posted by: lol at March 29, 2010 6:12 PM
More like every single thing is different now. Don't forget the past. Learn from it. Is it a coincidence that most of the big losses that get parsed on here display winners curses, where drastic overbids bought the properties? So don't forget it, but don't dwell on it. And the "trend" is an uptick right now anyway.
Posted by: anonn at March 29, 2010 6:29 PM
That's an uptick? More like the jolt you'll get when you try to defib a flatliner with 400V. The line moved. Once.
Posted by: lol at March 29, 2010 11:00 PM
@ex SF-er: If your point is that mutual funds look at 1, 5, 10 year returns, then by going only back to 2006 is extremely misleading.
SS should go back 1, 5, 10 years. But going back only 4 years, is cherry picking, which is why I suggested a 1 year lookback is more appropriate (compared to looking only at 4 years back).
I wish SS would show data going back 10 years, because everything that would compare to 2006-7 would be negative, so it adds no value.
2006-2009 were flukes for different reasons, so if we have data going back to 2000, lets look at it.
Posted by: SFRE at March 30, 2010 8:46 AM
Pent up housing supply hit an all time high this week; currently, 1766 homes are in some state of foreclosure (NODs, NOTS, bank owned) in Ess Eff. Two weeks ago we were at 1754. Standard disclosure about noise in the data, you know the drill.
Posted by: EBGuy at March 30, 2010 10:20 AM
Uptick. Yes. Spring bounce. I talk about what's going on a lot. Not what happened in two and three months ago. February sales are January escrows. You can look at the Dow, look at tech/biotech upsurges, and not consider what they're doing to SF r.e. this spring if you like. But an uptick it is.
Posted by: anonn at March 30, 2010 10:40 AM