August 30, 2010
SocketSite's San Francisco Listed Housing Inventory: 8/30/10
Inventory of Active listed single-family homes, condos, and TICs in San Francisco dropped 2.1% over the past two weeks on new sales, a slowdown in new listings and a seasonal culling of listings that haven’t moved. On average, inventory has dropped 5.3% during the same two weeks over the past four years. Expect the volume of new listings and available inventory to spike in the weeks following Labor Day.
Current inventory levels remain up 18% on a year-over-year basis and up 21% versus the average of the past four years, up 22% if you exclude 2009, up 36% as compared to an average of 2006 and 2007.
The inventory of single-family homes for sale in San Francisco is up 31% on a year-over-year basis versus an 11% increase for condos.
37% of all active listings in San Francisco have undergone at least one price reduction and the percentage of active listings that are either already bank owned (92) or seeking a short sale (178) is 17%, up one percentage point but with no substantive change on an absolute basis over the past two weeks.
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: 8/16/10 [SocketSite]
∙ A New High For Distressed Listings In San Francisco [SocketSite]
First Published: August 30, 2010 7:30 AM
Comments from "Plugged In" Readers
I think a reverse mix equation is at work here. A lot of the homes on the market seem to be asking near peak pricing but many of these homes wouldn't have commanded these peak prices even at the peak. I do believe that buyers are our there but sellers need to get realistic about prices. Either these sellers can't sell at lower prices, or they are awaiting a comeback that isn't coming back anytime soon. Agents should be imploring their clients to reduce price.
Posted by: eddy at August 30, 2010 9:42 AM
The toursheet this week is supposedly 2/3 the size it was a year ago. So there are probably lots of stale ones among the technically active listings.
Posted by: anon at August 30, 2010 9:47 AM
post labor day is going to be Veddy INN-tare-ess-ting.....
Posted by: curmudgeon at August 30, 2010 10:20 AM
a thought just occurred to me:
Would we see such a dropoff in inventory followed by a post labor day spike if the SF MLS didn't allow the DOM to reset to "1 day" after a short time off the market?
it would be interesting to know how many of the "new" listings after Labor day are really new, and how many are actually recycled stale summer listings.
Agents should be imploring their clients to reduce price.
hard to do when people read data that says "SF RE is up 18% YOY".
you can't on one hand tell buyers "SF is special, and it's up big the last 12 months, and many of you missed the bottom" while telling sellers "you have to lower your asking prices".
this is one of the problems with an inefficient market like RE.
Posted by: ex SF-er at August 30, 2010 10:30 AM
On the other hand 3059 25th street just sold for 1.185 on 25th and Alabama. So it's going to be hard to tell a certain group of would be sellers that the market is down very much.
Posted by: anon at August 30, 2010 10:37 AM
@eddy: We saw the same thing in the first half of 2008 - the bubble had clearly popped, and people just tried to see if they could get out for what they had just paid. I've repeatedly said a lot of it wasn't real inventory, just a wish that was a function of not costing the seller anything to try. Many of those listings got pulled in August of 2008.
But then in the the last quarter of 2008, many of those sellers came back with a vengance and dumped what had been listed earlier at whatever price the market would bear.
I think people figure they'll try for a very high price until the end of the summer, because they don't really want to move til the end of the summer anyway. If someone pays them an outrageous price, they'll sell earlier than they would have liked to, but otherwise, they are just signaling their intention to sell after Labor Day (or at least that's how it turned out in 2008). So although I think a lot of this is not real inventory at the present time, I think it shows that there are a lot of people who are getting mentally ready to sell.
So I agree that post labor day will be very interesting, because there is way more inventory than even early 2008.
Posted by: tipster at August 30, 2010 10:43 AM
Typo on the percentage that is short sale or bank-owned: 92 + 178 = 270 which is 17% of 1561, not 1%.
[Editor's Note: Good catch and since corrected, that should have read, "...the percentage of active listings that are either already bank owned (92) or seeking a short sale (178) is 17%, up one percentage point but with no substantive change on absolute basis over the past two weeks."]
Posted by: PaulG at August 30, 2010 11:02 AM
"@eddy: We saw the same thing in the first half of 2008 - the bubble had clearly popped, and people just tried to see if they could get out for what they had just paid."
That's not at all how that went down. Not the timing (early 2008??), price performance (there were numerous price highs in spring 2008), the overall mentality, the fact that at that point the availability of certain loans remained extant, etc. etc. Not a single aspect of your summation was valid.
Posted by: anon at August 30, 2010 11:03 AM
An increase in inventory doesn't necessarily mean anything for prices, except to the extent supply affects prices.
Since we presume everyone needs a place to live and most sales on the MLS are not investment homes, it's reasonable to assume most people trying to sell their houses are either finding a place to rent or trying to buy a new house.
However, for inventory to increase, that means either
A) a slowdown in the system, where it takes longer to buy/sell a home, but the rate at which people want to move doesn't change (in rate faster than out rate on the MLS)
B) a net increase in renters, which creates a lot of extra homes on the market (foreclosures and short sales)
C) a net flux of home owners out of the city, creating vacant homes with no new people to fill them
All three are playing some part in inventory levels, but which is the dominant factor creating the extra-high inventory we see today? With 17% as short sales or foreclosures, it's probably B, and, with banks being so backlogged in recent history, the last few years of inventory were probably artificially low.
Posted by: rr at August 30, 2010 11:18 AM
"A lot of the homes on the market seem to be asking near peak pricing but many of these homes wouldn't have commanded these peak prices even at the peak."
I think I would agree with that for SF. For Bay Area in general, I would say that some people still think they can get close-to-peak pricing on junk houses (as they could during the boom). Some of these people do not have the best house in the neighborhood (e.g. missing a feature or two, crap remodels, etc.) and are still asking ridiculous prices, whereas the best houses in the neighborhood are sometimes still asking higher than peak for junk houses. When something sits, people make inadequate cuts, even as the rest of the neighborhood has houses that sell for a 6-figure number less.
There's still some reality missing, and ex SF-er is right that the crappy data analysis and interpretation doesn't help.
Posted by: sfrengade at August 30, 2010 11:21 AM
"On the other hand 3059 25th street just sold for 1.185 on 25th and Alabama. So it's going to be hard to tell a certain group of would be sellers that the market is down very much."
As I understand from the 3730 26th St thread, bidding up above asking is no longer considered a comp. This was listed at $999K, and therefore this house should not be considered a comp. Right? Can't have it both ways, flujio.
Also, it's not even close to an apple because it had an addition made to it and was last sold in 2001.
Posted by: sfrenegade at August 30, 2010 11:35 AM
Some friends of mine who recently had kids say that 2007 was year of the new baby boom. If this is true, perhaps a lot of these parents with toddlers are looking to move out to the burbs, since many will be getting ready for kindergarten pretty soon.
Posted by: joh at August 30, 2010 11:49 AM
" bidding up over asking is no longer considered a comp"
Everyone regards it as a comp within a grouping of comps, but within groups of comps there are usually outliers at the top and at the bottom. I think the point was raised that an offmarket sale isn't a comp, but I didn't say it.
Posted by: anon at August 30, 2010 12:22 PM
Kids born in '07 are going off to Kindergarten, those must be some bright kids.
Posted by: sparky-b at August 30, 2010 1:57 PM
"2007 was year of the new baby boom"
Peak economic years often serve as peaks for mini-baby booms too. However, are you friends referring to an "echo echo boom"? I've heard the baby boomer's kids generation called the "echo boom" before, and that generation is what's resulting in college populations peaking (and acceptance rates hitting rock bottom) around this year and next.
In any case, it's possible that it's early for kindergarten planning for those kids, but maybe some people are hyper-planners. I know a few.
Posted by: sfrenegade at August 30, 2010 2:43 PM
ex SF-er wrote:
> you can't on one hand tell buyers "SF
> is special, and it's up big the last 12
> months, and many of you missed the bottom"
> while telling sellers "you have to lower
> your asking prices".
Top agents have no problem doing this and the agents that have been doing it for decades will have no problem telling anything to anyone to close a sale...
Posted by: FormerAptBroker at August 30, 2010 8:09 PM
It looks like the pent up supply is holding steady. Currently, 1411 homes are in some state of foreclosure (NODs, NOTS, bank owned) in Ess Eff. This is compared to 1396 homes two weeks ago. Standard disclosures about noise in the data; information deemed reliable but not guaranteed.
Posted by: EBGuy at August 31, 2010 11:50 AM
Thanks, EBGuy. To continue my stat from 2 weeks ago (see link):
8/2: 1437/1653 = 0.87 pent-up per listed inventory
8/16: 1397/1594 = 0.88 pent-up per listed inventory
8/30: 1411/1561 = 0.90 pent-up per listed inventory
Posted by: sfrenegade at August 31, 2010 12:30 PM
Kids born in '07 are going off to Kindergarten, those must be some bright kids.
They'll be going to Kindergarten in a couple of years, which some will say is "pretty soon."
Especially those who have to sell a home in this market.
Not saying that this is a driving force in the inventory numbers, but just suggesting that it might be a factor.
However, are you friends referring to an "echo echo boom"?
I just found the following article, which mentions the "echo boom" but attributes the high birthrate of 2007 to a "perfect storm" of factors:
"Nelson attributes the 2007 numbers to a "perfect storm" of factors: more immigrants having children, professional women who delayed childbearing until their 40s, and larger numbers of women in their 20s and 30s in the population, keeping the fertility rate high."
Posted by: joh at September 1, 2010 10:25 AM
Did you see the Jon Stewart bit about the media's use of the term "perfect storm"?
If you look at the data, birth rates often tend to peak right around the time of an economic downturn (e.g. 1990, 2000) People are more likely to put off having a child if they think there might be uncertainty as to whether they can afford having a child. Look at how birthrates crashed during the ugly 1973-1975 recession.
That said, it'd be interesting to see if we actually have the structural changes in our society that the expert in that article is talking about. Unfortunately, that article is in USAToday, so it didn't get into the nitty gritty of that.
One thing to note is that the true size of the Baby Boomer generation is actually hidden in that chart because they didn't normalize to the birthrate as a percentage of the U.S. population. The birth rate was almost 4.3M in 1958-1961, as it was in 2007, but the population of the U.S. then was only 175M-185M, vs. over 300M.
I would guess that the 1980-1982 double-dip got hidden by immigration and the echo boom, plus the fact that the birthrate was so depressed in the 70s.
The birthrate has indeed dropped during this recession:
Posted by: sfrenegade at September 1, 2010 2:58 PM