November 10, 2010

Redfin Reports: San Francisco Sales Volume Down 27.3% In October

As we wrote in August:

With recorded sales volume falling an average of 7.9 percent from June to July over the past six years, a seasonal decline is to be expected, but a 22.4 percent drop in sales from June (563) to July (437) this year according to Redfin might raise an eyebrow or two.
And perhaps even more telling, sales volume appears to have fallen 24.9 percent on a year-over-year basis in July with sales of single-family homes falling 20.3 percent (from 281 to 224) and condos falling 29.7 percent (from 290 to 204).
It’s the first year-over-year decline in terms of sales volume in San Francisco since August 2009 and suggests tax credits have been (temporarily) stimulating the San Francisco market more than some might have thought.

Redfin subsequently reported year-over-year San Francisco sales volume declines of 22.5 percent in August and 29.9 percent in September. And according to their latest report, October sales volume in San Francisco (423) was down 27.3% on a year-over-year basis, down 20.5 percent for single-family homes.

As plugged-in people know, listed housing inventory in San Francisco hit a new half-decade high (1,985) at the end of October, up 42 percent on a year-over-year basis.

Redfin Reports: San Francisco Sales Volume Falls 24.9% YOY In July [SocketSite]
Bay Area Real Estate Enters the Twilight Zone [Redfin]
San Francisco Listed Housing Inventory Hits New Half-Decade High [SocketSite]

First Published: November 10, 2010 10:45 AM

Comments from "Plugged In" Readers

The MLS numbers reported here:

http://www.rereport.com/sf/index.html

show a continued drop in YOY sales volume but not quite that steep -- down 15% for October. I believe that Redfin also includes non-MLS sales, which may explain the difference. Regardless, lots of pent-up supply and not much pent-up (or actual) demand. Prices respond accordingly.

Posted by: A.T. at November 10, 2010 11:01 AM

yeah, I don't get the Redfin numbers.

they showed down 30% last month, but dataquick gave only 17% or something.

Don'tknow wht there would be such a difference.

Posted by: REpornaddict at November 10, 2010 11:21 AM

Should be a fun winter, after the owners of the two thousand homes that haven't sold for months, pay tens of thousands more mortgage costs on a place they no longer want and also pay property tax, due December 10 and, this seems to be the kicker, due again on April 10.

We were in a similar situation in 2008, except now there is even more unwanted inventory. The following spring, an awful lot of stuff closed by April 10 at greatly reduced prices.

Good times.

Posted by: tipster at November 10, 2010 11:43 AM

My informal review of cleanoffer is showing a bunch of high profile homes going into escrow. The market feels strong to me. But no doubt there are a lot of sellers. To be expected. We're still not seeing the freezing of buyers just a slowdown. Also to be expected.

Posted by: eddy at November 10, 2010 12:22 PM

I see 1840 listings versus 377 sales in October. That's not too bad, really, at 4 3/4 months supply or so. And Tipster, you wouldn't know good times if your name was...Flo or JJ.

Posted by: [anon.ed] at November 10, 2010 12:52 PM

We are building up pent up demand. There are TONS of buyers right now. All being rewarded for waiting with price and interest rate declines. They only jump on "deals" so we're seeing a number of properties with multiple offers along side properties that have been sitting forever.

This quarter vs. last year is also a unique comparison - early in 2009 no one was buying thus creating pent up demand that released late in 2009. The stock market began to recover and buyers felt like the world wasn't going to come to an end after all, so they jumped in and most 2009 sales happened late in the year. So you are comparing last year's highest point to this year.

Posted by: hangemhi at November 10, 2010 1:29 PM

"I see 1840 listings versus 377 sales in October"

There were only 1400 active listings at this point last year, and sales were higher, and prices were still soft. Listings are now 30% higher and sales about 15% lower, and it's pretty obvious what that will do to prices, JJ -- DY-NO-MITE!

Posted by: A.T. at November 10, 2010 1:48 PM

In my neighborhood (District 5), October median prices and sales volume are significantly up over October 2009. You said it: "DY-NO-MITE!"

Posted by: sanfrantim at November 10, 2010 2:02 PM

I noticed that too, SanFranTim...there was a huge flurry of listings in September, but a fair amount of them are getting gobbled up. It's certainly not armageddon in District 5 at the moment, although "pricing right" sure seems to help. A bunch of things have gone contingent (like that 3.whatever million dollar house on Ford) that surprised me.

Posted by: curmudgeon at November 10, 2010 2:15 PM

Well, mls shows 62 sales in D5 for October 2010 and 68 for October 2009. Better than SF generally but still low and below YOY last year (a terrible year). Maybe not armageddon, but we're just talking about degrees of weak everywhere in SF.

Posted by: A.T. at November 10, 2010 2:20 PM

Real SF = D5

:)

Posted by: alazyman at November 10, 2010 3:13 PM

the google raise may lead to some movement in the hhousing market. i hope so.

[Editor's Note: Perhaps it already has as 2207 Scott Street is withdrawn...]

Posted by: meep at November 10, 2010 3:20 PM

"the google raise"

Is this the new, "the [Chinese/French/other ethnicity] will save the SF housing market"? It's one company, people.

Posted by: sfrenegade at November 10, 2010 3:42 PM

The article I read indicates that they are doing this because they claim employees now "value salary more than stock options", so they'll probably grant this one time raise with large fanfare, and then change their stock option plan to slash the number of options going forward when no one is paying attention.

So Google will end up paying like a lot of large companies, e.g. Hitachi Data Systems, which has always paid more but been much stingier with stock options.

For Googlers who buy houses with salary alone, this will be a boost. For those who buy houses with stock options, this will be a bust.

Posted by: tipster at November 10, 2010 4:01 PM

funny, I was going to post something about the google 10% raise impacting the SF housing market as a joke, but . . .

and separately, glad to hear that there are "Tons of buyers" sounds like a hot market. . . .

Posted by: random at November 10, 2010 5:01 PM

No, October 2009 wasn't a terrible month at all for D5. It had 68 sales. October 2000 saw 55 sales, 2001 35, 2002 67, '03 102 (wow?), '04 89, '05 101, '06 80, '07 70, and '08 55.

It was right in the middle really. So was this year. Some of you posters would be more credible if you stopped using hyperbole while talking that everything compared to peak years is awful. That's a meme on here, and it's nonsense.

Posted by: [anon.ed] at November 10, 2010 6:07 PM

Here are MLS inventory, MLS sales, months of inventory, and trailing 3 months of inventory since May 2007 (that's a cut-off based on data I had available):

Oct-10 1936 372 5.2 5.0
Sep-10 1797 341 5.3 4.8
Aug-10 1594 360 4.4 4.3
Jul-10 1799 385 4.7 3.9
Jun-10 1697 446 3.8 3.9
May-10 1599 480 3.3 3.8
Apr-10 1491 317 4.7 4.2
Mar-10 1361 414 3.3 3.9
Feb-10 1116 247 4.5 3.8
Jan-10 909.5 226 4.0 3.4
Dec-09 1131 412 2.7 3.2
Nov-09 1346 395 3.4 3.5
Oct-09 1460 435 3.4 3.3
Sep-09 1448 392 3.7 3.3
Aug-09 1352 495 2.7 3.5
Jul-09 1569 452 3.5 4.3
Jun-09 1630 389 4.2 5.1
May-09 1685 328 5.1 6.0
Apr-09 1622 277 5.9 6.9
Mar-09 1648 238 6.9 7.7
Feb-09 1500 192 7.8 7.2
Jan-09 1189 141 8.4 7.1
Dec-08 1405 265 5.3 5.8
Nov-08 1788 241 7.4 5.6
Oct-08 1789 381 4.7 4.3
Sep-08 1544 332 4.7 3.8
Aug-08 1388 393 3.5 3.4
Jul-08 1470 478 3.1 3.2
Jun-08 1496 426 3.5 3.4
May-08 1491 478 3.1 3.6
Apr-08 1381 382 3.6 3.9
Mar-08 1329 318 4.2 4.3
Feb-08 1159 292 4.0 4.0
Jan-08 1053 215 4.9 3.8
Dec-07 1077 355 3.0 3.3
Nov-07 1393 408 3.4 3.6
Oct-07 1532 452 3.4 3.3
Sep-07 1408 346 4.1 3.0
Aug-07 1187 464 2.6 2.4
Jul-07 1157 470 2.5 2.3
Jun-07 1152 513 2.2
May-07 1091 529 2.1

Someone had made a graph of the trailing 3 months data earlier. There appears to be a dual-peak in the trailing 3 months data -- one lower peak in November and one higher peak in March-April. Obviously, the winter 08-09 and spring 09 data looks different from other years.

Looking at trailing 3 months, it's not hard to see a seasonal pattern where months of inventory is lower in December than in November, but then steadily rises again until March-April. Presumably this is because inventory is pulled off the market around this time of year, just before sales really tank until the spring.

Posted by: sfrenegade at November 10, 2010 6:17 PM

@fluj

I love the cheer leading. You kill me. How many of those monthly sales numbers factored in 4% mortgage rates? What do you think the sales volume would be this year without the QE 1+2 boost by the Fed?

I'm happy to see you back on socketsite pumping the bull side of things. You always provide great laughs.


Posted by: El Realtor at November 10, 2010 9:58 PM

So, everybody is getting a flat 4 percent now. And nobody was getting a great rate with all the available, now extinct, mortgage products over those nine years displayed. That's what you're saying? OK. Glad we could make each other laugh.

Posted by: [anon.ed] at November 10, 2010 10:46 PM

@fluj

"So, everybody is getting a flat 4 percent now."

Everyone's getting at least 100bps off of the rates mentioned during your statistical period. When were folks getting that rate during the bubble???? Huh? waiting for the science.


Laughing my ass off in the meantime.

Posted by: El Realtor at November 10, 2010 11:56 PM

According to the numbers for october posted above, sorted by sales (hopefully the tabbing displays properly):

Year Sales
2001 35
2000 55
2008 55
2010 62
2002 67
2009 68
2007 70
2006 80
2004 89
2005 101
2003 102
Average 71
Median 68

So 2009 was below average, and right at the median. Of course 2010 is the year of interest, which was well below both median and average.

Also of interest is the fact that you have to go quite a bit into the past to find a year that was below either 2008, 2009, or 2010.

Posted by: lyqwyd at November 11, 2010 12:23 AM

@sanfrantim

District 5 Dyn-O-Mite in the thread above. Enjoy.

Posted by: El realtor at November 11, 2010 12:38 AM

Let's not be ridiculous here, fluj. I said 2009 was a terrible year for sales in D5 (and citywide). Here are some longer term numbers:

http://www.blackstone-sanfrancisco.com/198.html

http://www.blackstone-sanfrancisco.com/199.html

284 SFR sales in 2009. Way, way below par for the last two decades, and you have to go back to 1990 to get a number that low. Condo sales in 2009 were not so extremely low, but still the second lowest of the decade.

2010 looks like it will end up a bit better than 2009 -- a terrible year -- and for the single month of October I was just pointing out the error in sanfrantim's observation as 2010 was actually slower than 2009.

As for J.J., I'll take Thelma any day.

Posted by: A.T. at November 11, 2010 6:55 AM

"Everyone's getting at least 100bps off of the rates mentioned during your statistical period. When were folks getting that rate during the bubble???? Huh? waiting for the science."

That's not all there is to it. Availability of money fatored hugely. I dont' want to play "What if" on the internet. I prefer to look at what is going on in the here and now.

AT, I made my point. You called the 2010 tally low for D5, and it wasn't particularly. You emphasized it further by calling it less than '09's and calling that terrible. Like I said before you always want to argue minutiae when you get corrected. No thanks.

Posted by: [anon.ed] at November 11, 2010 8:42 AM

What are you. Talking about, fluj, your statistics were exposed as the misleading sham they always are. Again.

Posted by: tipster at November 11, 2010 8:53 AM

fluj, here is a good example of your strawman arguments, since you always profess not to understand that term.

I noted that in D5 2009 was "a terrible year." Then you presented numbers for a single month -- i.e. a strawman -- and then attacked that rather than the statement I actually made (and you did not even do that persuasively as lyqwyd points out). That's a flawed argument, a logical fallacy, known as "attacking a strawman."

2009 was a terrible year for D5 sales. And October 2010 D5 sales were lower than October 2009 D5 sales. That's all I said. Both are facts (all right, "terrible" is a subjective assessment, but an accurate one).

Posted by: A.T. at November 11, 2010 8:57 AM

You called the month low for the area. It actually wasn't.

Posted by: [anon.ed] at November 11, 2010 9:06 AM

"Well below," eh lyqd? A grand total of 8 sales off 2007's tally?

Interesting how this lot goes to median and average when it suits them to. Isn't it?

We didn't need median and average there, guys. LOL.

Posted by: [anon.ed] at November 11, 2010 9:13 AM

"You called the month low for the area" -- Nope, that's the strawman you've constructed. But you keep on pretending you don't understand that.

However, as your own numbers demonstrate, October 2010 -- i.e. the latest month from the current year -- is low for the area. That's the salient point given the subject of this thread.

Posted by: A.T. at November 11, 2010 9:13 AM

intersting how all you can argue about is whether it's "well below" or not.

I'm not really clear why you are mentioning 2007, but I will mention that your response to my post is another example of a straw man argument. You can't really contest what I posted, so suddenly your focus is on the meaning of "well below" and the use of medians and averages, which actually has nothing to do with your original point.

The reason I posted median and average is because I actually understand them, where they are useful, and where they have flaws.

All I really did was point out that your own numbers do not support your argument.

Posted by: lyqwyd at November 11, 2010 3:02 PM

Redfin here to answer your discrepancy in the numbers question:

The Redfin numbers differ from Dataquick numbers because we use data from the MLS and public records.

The Dataquick report includes only public records data.

We also spend time to separate homes by type: SFH, condo, townhome. From what we can tell (not being inside of Dataquick), they just report "houses and condos." It's not clear whether they lump townhomes into those, or just don't report them at all.

Hopefully that helps explain why you would be seeing two different numbers reported for what seems like the exact same thing.

Posted by: Michelle Broderick at November 12, 2010 10:45 AM

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