June 7, 2010
Listed Inventory Crosses 2009 Mark For Four Year Seasonal High
With an uptick of 4 percent over the past week, the inventory of listed single-family homes, condos, and TICs for sale in San Francisco has reached a four year seasonal high (i.e., versus the same point in time over the past four years) having crossed the inventory levels of 2009 (1651) on a year-over-year basis for the first time in 2010 (1677).
∙ SocketSite's San Francisco Listed Housing Inventory: 6/1/10 [SocketSite]
First Published: June 7, 2010 10:45 AM
Comments from "Plugged In" Readers
I like it. Can't help but think more supply will lead to lower prices at some point. Still holding out hope I'll be able to buy a home here one day.
Posted by: Jane at June 7, 2010 11:28 AM
I like it alot for the same reason. No flattening in the slope....hope it keeps going right through the summer and into the fall.
Posted by: curmudgeon at June 7, 2010 12:07 PM
since i so enjoyed how tipster could comment on the last inventory update post that down was actually up - i thought i'd posit how up could actually be down on this one.....
there are fewer non-MLS sales happening today - now that large buildings like the Infinity and others are either out of the game completely or mostly. instead they have MLS listed re-sales. and for the current crop of new buildings (which are smaller), since it's a slower RE market they can't shun the MLS like they did in the past. So "listed" inventory may only be higher today than last year simply because a higher percentage are using the MLS.
or as tipster would say it if he were an RE bull - "see, this chart proves that total listing inventory is clearly down from last year and proves the market is on it's way up"
Posted by: hangemhi at June 7, 2010 12:13 PM
You can interpret this is many ways, but another take would be that supply is being added by folks who were relunctant to sell last year when the market was at it's bottom, so this pick up is to be expected. Again, all quantifiable data that I've seen still indicates that things bottomed up last spring. This chart also doesn't include sales data (demand), which will quite likely show another year over year increase in sales.
There really isn't enough data here to suggest much of anything, but I'm sure it'll be spun negatively by all of the usual suspects. As usual, time will tell.
Posted by: Lance at June 7, 2010 12:38 PM
hangemhi, if all you're suggesting is that you need to compare inventory to housing units to determine the *percentage* of inventory, that seems uncontroversial. You are also suggesting that there would be a lag between creation of housing units and their first MLS sale, which is also uncontroversial with respect to condos.
I'm not sure if we have data on housing units in SF for 2009 and 2010, but here's some older data Census bureau's American Community Survey, which should be relevant for your latter point:
2008 ACS: 359,905
2007 ACS: 357,833
2006 ACS: 356,486
2005 ACS: 354,963
2004 ACS: 353,930
2003 ACS: 353,506
2002 ACS: 346,765 (that seems like an outlier, especially with a 12,000 unit change in 2-unit buildings from 2002 to 2003, although there are lower in magnitude changes in unit type from year-to-year in all the numbers -- the three year averages are probably closer to accurate)
I'm not sure that this tells us all that much. Inventory numbers have fluctuated quite a bit between 2006 and now, but it's not clear that the total number of housing units is necessarily correlated to that difference, since we're looking at a less than 2% difference in the number of housing units between 2003 and 2008. For comparison, the number of houses in inventory went up 1.5ish% from 2009 and 2010.
Here's 2008 and you can click through prior years:
Posted by: sfrenegade at June 7, 2010 12:45 PM
Given that just a bit under 40% of listings have had the price reduced at least once, I'd posit that a more likely explanation is that active inventory is rising because of the combination of more sellers and fewer buyers, which is continuing to push prices down. Not that complicated, really.
Posted by: A.T. at June 7, 2010 12:52 PM
actually i was just saying that the use of the MLS (assuming that's what the above chart is based on) may have increased this year vs. years past. so is inventory really higher? or is it simply that the use of the MLS higher?
Posted by: hangemhi at June 7, 2010 1:02 PM
sfrenegade - thanks for those #s.
Does anyone on here have the year by year sale information for the SF MLS? Or can suggest a way for me to compile it?
Posted by: Timeburn at June 7, 2010 1:04 PM
you bring up a very good point.
as for the rest:
1) inventory alone is only part of the story. need to combine inventory with sales to get months of supply. A rising inventory isn't a bad thing so long as months of supply isn't also rising. Rising inventory with rising months of supply would be more problematic for "bulls".
2) some of this may be affected by the FTHB credit. it not only pulled demand forward, but likely also pulled inventory forward. If I were a prospective seller who was going to put my home on the market later this summer, I would have put my house on early so that prospective buyers could take advantage of the FTHB credit.
3) we'll have a better idea of what's going on later this summer when govt intervention (not including Fannie/Freddie/FHA/ZIRP) is weaned.
Posted by: ex SF-er at June 7, 2010 1:06 PM
A.T., I have to disagree with you. As most bears on this site (as well as the editor) have said repeatedly, selling vs. listed price is a pretty worthless statistic. It says nothing about the real underlying value of the home(s) in question.
Most home price data continues to show prices up year over year since last year, and this includes Case Shiller's "apples to apples" index. As I said earlier, there is no consistent and/or reputable data that shows "prices are being pushed down".
Posted by: Lance at June 7, 2010 1:10 PM
A.T. - your point is almost certainly true. as is mine. a combined effort if you will.
mainly i was mainly poking fun at a comment from the last time this chart was posted that said "up is down and down is up" with nonsense logic so i figured i'd do the same with a reasonable argument.
as i recall on SS a few weeks back... some said realtors hated the watermark because they didn't offer buyer agent commissions when they were being sold by the builder - and thus they could not use the mls (no cooperating broker commission offered = no mls usage). And even those buildings that did offer buyer agent commissions only put a tiny fraction of their listings on the mls. today, they need the marketing and exposure power of the mls - so mls usage and therefore listings are up for more than one reason. So these year over year numbers are hardly perfect
Posted by: hangemhi at June 7, 2010 1:15 PM
Lance - I agree, this chart says essentially nothing that can be relied on. But I also disagree that prices are up - sure, in some segments of our market they are up, but in others they are down, and others flat.
exSFer - from what I've seen the $8k tax credit had no impact on SF prices - so it's expiration was essentially meaningless. Certainly it will have a big impact on $100k and $200k markets - but not on $800k and up markets. i had two "cheap" listings (cheap for SF) and the tax credits were sort of a "nice to have" but not even remotely a deal breaker for anyone.
as for months supply being a more important figure - i totally agree. unfortunately to my point if you are relying on MLS listing figures that may have a fatal flaw btwn hot and cold markets - you'll have to look elsewhere to figure out the real months supply now vs. years past.
Posted by: hangemhi at June 7, 2010 1:35 PM
hangemhi, but what percentage of those 1600+ are MLS listings that wouldn't have been MLS listings before? Let's see some hard numbers here.
"As most bears on this site (as well as the editor) have said repeatedly, selling vs. listed price is a pretty worthless statistic."
That's not completely true. Bulls often say that listing prices are irrelevant too, and many bears use listing price vs. selling price to show the lack of realism.
In addition, many people think listing vs. selling is a valuable statistic just because it gives information on the market. In addition, people who don't follow the real estate market very carefully read listing prices vs. selling price statistics in the media and think of them as an accurate view of the market, as I noted on another recent thread.
Posted by: sfrenegade at June 7, 2010 1:45 PM
"inventory alone is only part of the story. need to combine inventory with sales to get months of supply"
Agree with this and gave some stats on it on the June 1 post the editor linked to (quoting myself):
"Based on 428 sales in April 2010 (vs. 402 in April 2009), we have a little under 4 months of inventory. We'll see if May numbers change that."
Don't believe DataQuick has updated with May numbers yet -- probably will take another 2 weeks at least.
Posted by: sfrenegade at June 7, 2010 1:53 PM
sfrenegade - my SS quota for the day was exceeded hours ago - so I don't plan to spend hours - or more likely weeks - trying to figure the impact of new buildings not using the MLS in years past vs. every seller today having no choice but to use the mls.
i'm simply saying it skews the numbers. how much is probably something we will never know. my statement that the chart is meaningless was a bit strong. i do find it useful - but it's like any stat - it's a map of the world - but it's not the world itself.
Posted by: hangemhi at June 7, 2010 1:55 PM
exSFer - from what I've seen the $8k tax credit had no impact on SF prices - so it's expiration was essentially meaningless.
I agree that the FTHB credit was not a huge driver of SF real estate. I'm just not sure it was "meaningless". $8k is $8k.
the FTHB credit can affect a RE market without significantly affecting prices. I'm not saying that it made a person who was not interested in the RE market buy or sell.
I'm only saying that it may have encouraged prospective buyers and sellers to move their prospective sale/purchase earlier in the year. Hence, it's "pulling demand and supply forward" as opposed to "increasing demand and supply"
It is just so hard to tell how much or little it affects markets like SF. I could imagine it having little to no impact, and I could imagine it having demonstrable impact. wealthy/high income people do actually care about saving money.
Similar to "cash for clunkers". at one point the #1 car purchased using the C4C program was the Toyota Corolla, and the top car cashed in was the Ford Explorer. That was expected and logical.
however, the C4C program increased Audi sales too. (the effect was disputed with Audi execs saying that C4C lead to only a 10% increase... but a 10% increase is a 10% increase).
that's a luxury brand. What does a person buying a luxury car care about a small tax credit?
probably the same thing that a person buying a house for $800k cares about the FTHB credit (especially when they're doing it with an FHA loan and the FTHB credit can be used as part of the 3% down payment).
Posted by: ex SF-er at June 7, 2010 2:31 PM
sfrenegade, those months of inventory numbers mix and match different things. DQ reports all sales, not just MLS sales. And the ed.'s "active listed inventory" numbers omit inventory that is in any stage of contract. So the ed.'s numbers are lower than the actual listed inventory, and DQ's numbers are higher than the MLS sales numbers.
A few sources that used to regularly report MLS sales figures no longer do so. This site does -- but others have reported that its numbers are inaccurate: http://www.rereport.com/sf/index.html
Posted by: A.T. at June 7, 2010 2:38 PM
There really isn't enough data here to suggest much of anything, but I'm sure it'll be spun negatively by all of the usual suspects.What is negative to you may be positive to others. Ever think of it that way?
Posted by: dogboy at June 7, 2010 3:05 PM
How can anyone call spring of 09 the bottom when inventory is higher now than then. Everything I am watching is also sitting much longer. Does anyone have dom stats? Not that they can be trusted with the games that are played by realtors
Posted by: spencer at June 7, 2010 3:06 PM
A.T., yes I know all of that, but was just giving a rough estimate. I actually don't have a problem with removing anything in any stage of contract, because those properties are "off the market." They could close this month, next month, or in 6 months, and even if they're "looking for backup," the backup buyer will need to go through the escrow process too.
I do suppose we're missing FSBO houses on the inventory listings, but that's a lot harder to quantify. With respect to "pocket listings," I think it's perfectly fair to exclude those because those houses are only quasi-on the market, even if they're on-market to some hypothetical singular buyer.
Anyway, these statistical differences are why I wish property listings weren't run by local realtor associations, and instead were public and open. We at least wouldn't have to deal with juked stats like we do now.
Posted by: sfrenegade at June 7, 2010 5:15 PM
@ Lance A.T.,
"Most home price data continues to show prices up year over year since last year, and this includes Case Shiller's "apples to apples" index. As I said earlier, there is no consistent and/or reputable data that shows "prices are being pushed down".
Can we get SF "apples to Apples" data anyone? Not just the bay area but SF proper? I would be shocked to SFsee apples up y/y right now. I have been looking very closely for two years at SFHS in districts 1,5,7, and I have yet to see a true SF apple up y/y.
On a side note,look around and you will see true apples selling at prices from 2004 or 2005 levels or lower. I saw an egregious example this weekend - 3025 Scott Street @ Filbert. Listed now for $450K BELOW the 2006 sale price of 2.75MM. It's not going to go for 2.3, as it's a beater. Talk about being taken to the woodshed...
Posted by: beent there at June 7, 2010 9:02 PM
I see a few people out there making triple-back-flips juggling swords with one arm tied trying to spin this one up the best they can, salesman fashion.
In short: bad news for the rebound crowd.
Posted by: lol at June 7, 2010 11:04 PM
@ beent there,
Price reduced today to $2.1MM on 3025 Scott. Approx. $500/day in lost equity, but at least they got to enjoy the formica countertops.
Posted by: HappyRenter at June 8, 2010 12:42 PM
Some of the shadow inventory is coming out of the shadows and on to the MLS. Sellers listing now because sales volume and medians are up. More buyers + shadow inventory = more listings. Pretty simple really. More listings than in spring 2009 because that was a pretty terrible time to try to sell a home.
Posted by: sanfrantim at June 8, 2010 12:53 PM
"Sellers listing now because sales volume and medians are up."
I'm mostly with sanfrantim here. Again, as I've mentioned in the last week, most people who don't follow the housing market carefully, which is most people, pay attention to statistics the media publishes as an indication of the market. Often these are medians and sales volume numbers, along with a few other things like listing price to selling price ratios and the purported number of offers a single house may or may not have gotten.
Consistent with what sanfrantim said, the people I know who have put houses on the market recently are more confident in selling this year because of these statistics, whereas in 2009, they were pretty convinced that nothing was selling.
Of course, that doesn't mean that they are getting boom-time prices. Some of them did list in 2009 at boom-time prices and delisted after they realized the listing price was ridiculously outdated and very little volume was moving. This year, they are listing for a more realistic price, but they think they have a better chance of selling, even if they get less money.
Anyway, this month approximates the time when listings might seasonally peak, so it'll be interesting to see if months of inventory goes up or down going forward. Certainly large amounts of government intervention have helped considerably.
Posted by: sfrenegade at June 8, 2010 5:15 PM
All I have to say is I am still looking. Good inventory is still moving, and most of the volume comes in the way of complete crap listings that I would never live in.
Most of the data shows a sales/list at 101.4%, and most markets are still neutral markets in that more than 33% of the homes are in escrow.
I would love to see 98% sales/list, 2 to 3 reductions per home (at least at these prices), 90 day average listing times, one offer per home, and 25% or less of homes in escrow to go along with this increasing inventory. That isn't the reality though unfortunately. Hopefully it will be soon, but I have been waiting two years for it, and it hasn't happened.
Posted by: Jeremy R at June 9, 2010 10:00 AM
This site has posted May sales data:
It shows sales up quite a bit and medians down a tad YOY. Medians down quite a bit from April. We all know the significance of medians (although realtors sure tend to trumpet them when they are rising, but when they are falling -- crickets chirping). Guess we'll see in June if sales were pulled forward because of tax credits. The YOY comparisons are not so easy as we move away from the total sales freeze-up in early 2009.
Posted by: A.T. at June 9, 2010 3:56 PM
April and May data are suspect because of the overlapping tax credits. I believe the CA tax credit has no income limit, correct? The federal I believe starts phasing out at $225K.
Median data is suspect too, but it is funny to see the crickets chirping.
Posted by: sfrenegade at June 9, 2010 4:24 PM
that rereport site is always wrong
Posted by: anon at June 9, 2010 9:41 PM