Recorded home sales volume in San Francisco fell 1.6% on a year-over-year basis last month (491 recorded sales in December ’10 versus 499 sales in December ‘09), up 19.8% as compared to the month prior which was down 17.8% on a year-over-year basis.
For context, December sales figures for San Francisco from 2004 to 2008 were 646 (2004), 612 (2005), 589 (2006), 445 (2007), and 366 (2008). And on average, from 2004 to 2009 sales volume has declined 1.6% from November to December.
San Francisco’s median sales price in December was $617,000, down 5.1% compared to December ’09 ($650,000) and down 9.3% compared to the month prior.
For the greater Bay Area, recorded sales volume in December was down 8.3% on a year-over-year basis, up 17.5% from the month prior (7,178 recorded sales in December ’10 versus 7,828 in December ’09 and 6,111 in November ’10) as the recorded median sales price dropped 1.3% both year-over-year and month-over-month.
Last month foreclosure resales – homes that had been foreclosed on in the prior 12 months – rose for the fifth consecutive month to 30.8 percent of the Bay Area’s resale market – the highest since last March. December’s figure was up from 28.6 percent in November but down from 32.0 percent in December 2009. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 15 years is about 8 percent.
At the extremes, Marin county recorded a 14.7% drop in sales volume (a loss of 39 transactions) on a 5.7% decline in median sales price while Napa recorded a 4.7% increase in sales volume (134 transactions) on a 12.9% decrease in median price.
As always, keep in mind that DataQuick reports recorded sales which not only includes activity in new developments, but contracts that were signed (“sold”) many months or even years prior and are just now closing escrow (or being recorded).
∙ Bay Area Housing Ends Year With Many Looking but Not Buying [DQNews]
∙ San Francisco Recorded Sales Activity Down 17.8% YOY In November [SocketSite]
∙ San Francisco Recorded Sales Activity In December: Up 36.3% YOY [SocketSite]
∙ San Francisco Bucks CA Foreclosure Trends, But Not In A Good Way [SocketSite]
The entire article from DQNews is worth a read.
December? Welcome to 2011. January is going to kick way up.
Eddy, that DQNews report was a good read. The investor and all cash buyer percentages were revealing (and dovetail nicely with the MS report, I think). And BTW, pinch me, because the president of DataQuick just used to term “pent-up supply”. My work here is done.
Yeah, but he also used it in conjunction with pent-up demand. 🙂 I also found some of the long term average data points very interesting when compared to current day stats. Also echo’d was my comment from the other day with regard to the market being made up mostly of foreclosure and bargain hunting.
@Paul, what exactly are you predicting? That recorded sales are going to go way up in 1/11?
maybe this isn’t all doom and gloom news. if i recall correctly, last december people were rushing to cash in on the first time home buyers credit (although later extended). considering the magnitude of the government intervention back then, a 1.6% drop drop YoY isn’t looking all that bad. of course, my recollection of when the tax credit was set to expire may be off. still, i would’ve thought it would have been worse.
One thing that’s a little surprising is that the % of non-MLS sales is pretty close to the same in 12/10 as it was in 12/06 when a lot of new developments were selling big. DQ numbers (which include all sales) are about 20% higher than the MLS numbers for 12/10 and they were about 24% higher in 12/06. Are there still new developments selling in any significant numbers or are these just private off-MLS deals?
If I judged the real estate market by the asking prices on Paul Hwang’s listings, I would have to agree with his sentiment.
The last time Paul notified us about a huge increase in sales, it was at the infinity when there were lots and lots of sales suddenly, so he was right.
Of course, that was because prices had completely plummeted when the sales office dropped prices dramatically.
Are prices falling? Look at the hot inner mission. Prices there had been holding around 2005 levels, but apparently, not any more. This one just sold fora hair over its 2003 price, but not enough to make up for the transaction costs. Surprised the heck out of me. The owner bought in 2003, and still lost money on the deal!
In advance of the it’s on a busy street type comments that will no doubt be posted soon, perhaps you could limit your comments to features it did not have in 2003.
http://www.redfin.com/CA/San-Francisco/2900-22nd-St-94110/unit-4/home/868804
Lower prices will lift sales up from the recent anemic volumes. Demand curves and all that . . .
Here is a pretty place that just completed a bubble round-trip:
http://www.redfin.com/CA/San-Francisco/235-17th-Ave-94121/home/1847053
2004: $1,215,000
2007: $1,400,000
2011: $1,165,000
2004->2011 price drop also should factor in another 16% erosion from inflation.
That’s quite the bounce in sales, which can’t be explained by seasonality, incentives etc etc..
Especially when the opposite was expected to happen by many here, given the aforementioned increase in effective buying costs of 20% or whatever it was due to interest rate hikes.
Interest rates ticked up in December. The bounce was likely. Those who locked in November and then needed to close before the lock expired. Should see more of it in January. Lower prices help too.
As always, keep in mind that DataQuick reports recorded sales which not only includes activity in new developments, but contracts that were signed (“sold”) many months or even years prior and are just now closing escrow (or being recorded).
“That’s quite the bounce in sales, which can’t be explained by seasonality, incentives etc etc..
Especially when the opposite was expected to happen by many here, given the aforementioned increase in effective buying costs of 20% or whatever it was due to interest rate hikes.”
I think this is exacly what was expected to happen by most people here. Prices have been falling and the bears that weren’t bull-ied into the market can now buy from sellers at a discount.
That 22nd St place is very interesting. Much more typical of the real estate experience people have in the hinterlands of the US. You buy a property to LIVE in, and maybe one day you’ll have paid your mortgage down and you can live on the cheap. Kind of lays bare the lunacy of buying a 1br condo with $405 per month in HOA dues.
Assume selling costs of 7%, down payment of 20%, no refi, and an alternative 1br rental at $2k per month. Did this seller really come out that bad, once tax considerations blah blah blah are taken into account?
rabbits, 22nd street was a short sale even though they sold it for $10K more than they paid, so no they didn’t come out that badly when you consider they probably cash out refinanced for an extra $100K in 2006. They were paying about $400 per month over market, but paying an extra $5K per year for 8 years when they sucked $100K out tax free wasn’t bad at all. Their credit is shot for a while, but so what.
But those games are over and now there is no reason to pay inflated prices any longer. Taking into account future transaction fees the new buyer is still paying a bit over rental value, but if the price declines, and it will, the new buyer will find that they paid too much in spite of the killer interest rate they likely got.
^ keep in mind, it’s basically a loft with an open BR on top. It has a more limited market, especially now that peeps are getting more practical in the starter price range. Real BR? Check. 2nd BR for future kid, or sofa surfing hipster friends from Willams, Mills, Pamona, etc? Check? Decent 2 BR condos in the mish, although still need to be priced right, are at least selling…tics are more challenging though.
God, this is a depressing market! But a good time for a smart investor to get cash flow, and hopefully a bldg with development potential for the future. I have definitely seen a few good investor projects, but they need a lot of cash…and a belief in the future.
The DQ data lumps condos and homes together and pulls both from MLS sales and transactions that are not brokered (foreclosures, principal to principal, etc.)
I just did a review of 2010 single family home sales for 2010 and my results are quite different. Median single family home prices ROSE 6% between 12/09 and 12/10. Sales volume was also up 10% from 2009. http://www.pegasusventures.net/wordpressblog/2011/01/19/the-2010-san-francisco-residential-wrap-up-feeling-better/
Many commentators here are vociferous in their rejection of median values as a metric. To forestall their comments, let me say that I agree with regard to valuation on a particular home (I’ve blogged about that recently too.) But it is at least some measure of what’s going on in the market as a whole. If not, why are we spending so much time reading this stuff.
Tipster – thank gawd they were able to pull their money out. I was worried for a second that someone didn’t get bailed out! I’m sure they’re much more comfortable waiting out the storm in a rental now. Phew!
47yo (gosh, I remember your mid-40s like they were yesterday) – I agree with your points about practicality. Which makes me even more interested in what will happen with the highrise type places now that appreciation is gone. 1bdr’s only work long-term for a very small segment of the populace (they were formerly known as “renters”). How much sense does a 700sqft, $700/mo HOA place make at any price over $400k? Probably not much. I know a bunch of people renting in high profile SOMA buildings that would never consider buying due to the fact that their lives will change and a 1bdr won’t work.
That’s quite the bounce in sales, which can’t be explained by seasonality, incentives etc etc.. Especially when the opposite was expected to happen by many here
I’ll be a man and admit I’m minimally surprised, and also admit that I did expect a drop in sales numbers since that is what is typically seen this time of year. I also expected things to look worse than last year due to the FTHB credit last year vs none this year.
of course, I’ve always maintained that most winter data is more noise than useful… thus I’m only minimally surprised vs anything else.
let’s see if this trend continues through the summer months, since that’s what I really focus on… especially late spring/early summer (March, April, May and June data that are released with a lag).
anything is possible. The govt is trying everything in its power to generate another bubble (witness stock/commodity prices). Perhaps they will be successful in blowing money into RE too.
(long form of argument was stated recently so no need to rehash)
@rabbits — $2000/month for 2003 seemed high to me based on my recollection. I wasn’t going to post, since second hand recollections from an anonymous poster probably don’t carry much weight. But I just found some rent data from the Price/Rent thread.
For July 2003,
“In the San Francisco metropolitan area (San Francisco, Marin and San Mateo counties), the average rent slipped 6 percent to $1,554; the occupancy rate edged up 0.6 percent to 93.6 percent. ”
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/07/17/MN33071.DTL
I believe that they average over all unit types. I would think that a loft in the mission would if anything be below average.
“Median single family home prices ROSE 6% between 12/09 and 12/10.”
Not according to redfin.
Median sold price was nearly flat and price per square foot was down. The trends were down sharply for the last month, so no wonder you went back for all of last year. Not that any of those stats mean anything, but to come on here and say otherwise seems not to fit with the independently available data.
Thanks for sharing.
http://www.redfin.com/city/17151/CA/San-Francisco
Same here:
http://www.rereport.com/sf/index.html
SFR median down 4.1% YOY
Condo median down 6.3% YOY
Medians don’t mean anything here, but they don;t seem to be heading up, but down.
That’s quite the bounce in sales, which can’t be explained by seasonality, incentives etc etc..
Especially when the opposite was expected to happen by many here, given the aforementioned increase in effective buying costs of 20% or whatever it was due to interest rate hikes.
As I mentioned earlier in my months of inventory update, December’s numbers looked especially strong compared to prior years. The question becomes whether November’s numbers were low or if December’s numbers were high since “Recorded home sales volume in San Francisco fell 1.6% on a year-over-year basis.” At the time, November’s numbers looked plausibly on the trendline at 18% down YOY, considering that the prior few months had been 12-17% down YOY.
This month’s number of about 2% down YOY doesn’t fit on the trend line, so it seems like something is afoot. However, monthly sales numbers are extremely volatile. If you look early in the year, March was up 50% YOY, April was up only 6.5% YOY, May was up 24% YOY, and June was up a mere 2% YOY. Down 18% YOY from November to down 2% YOY in December is not that weird in context.
Despite the wildness of some of tipster’s predictions, he might have a good point re: interest rates, since the vast majority of houses sold this month was likely in contract in either October or November.
I don’t think tax years are a good reason, or else we’d probably see a significant November to December bump every single year. Does anyone have any idea about whether people try to close long-pending properties by the end of the year for tax purposes? I remember posts or comments a few weeks ago about a few houses that had been pending since the spring.
We’ll see what happens next month. In the meantime, I’ll keep posting months of inventory and trailing 3 months of inventory.
December 2009 had USG stimulus muscle that December 2010 did not.
Although this data is not seasonally adjusted, it does illustrate the point I made a few threads back about the problems of seasonal adjustment during abnormal times. Either explicit seasonal adjustment or implicit (i.e. “December is usually slow”)
One time events like stimulus payments, tax incentives or non-seasonal factors like interest changes can either be improperly changed by the seasonal adjustment factor. Or if they occurred in prior years may be swept into the calculations for current and future seasonal adjustment factors.
December 2010 closings had 4.25 interest rates Federal Reserve stimulus muscle that December 2009 did not.
Rates were low all fall, Tipster. You’re really trying to say that a quarter point or so is equal to the possibility of a large credit expiring? That’s funny. And looking back in hindsight at a relatively strong December your carrying on late last year is also pretty funny. You’re shameless, dude. Would it kill you to be real for five out of every 10,000 posts?
Tipster: Redfin, like Dataquick, uses data from public records as well as the MLS. As I made clear in my post, my data reflects only MLS (ie only”brokered” sales). It’s likely that using non-brokered sales will lower the overall pricing because it will pull in both foreclosures and other “non-market” sales. It’s a matter of opinion as to which is a more accurate reflection of a normal retail transaction.
I did not “go back for all of last year” for any ulterior purpose. I have no axe to grind here. I simply wanted to see what happened in 2010.
A.T.: I subscribe to the rereport feed you cited. In fact, I brought to their attention that until a week or so ago their results were completely wrong because they’d included stats for Districts 11 and 12 (outside of San Francisco). I believe the essentially flat result you are citing is based on comparing the median for ALL sales in 2009 vs ALL sales in 2010, rather than monthly median for 12/09 vs. monthly median for 12/10. However, I am not sure of this. Note, also, that my results compare three month moving averages (of the monthly medians).
It’s annoying, but perhaps not surprising, that there can be significant inconsistencies in the data. It can even vary based on the date you pull down the data for your records (as Redfin itself acknowledges). All I can say is that I spend many hours making sure I’m as accurate as possible before I publish my charts.
a.e, interest rates dropped about a percentage point. Over an average 7 year hold, 1 point in interest on a median 600K property is about $40K. Some people might find that more valuable than a $15K tax credit.
Misha, is it possible that when the foreclosure homes get shunted off the MLS, that that fact alone is completely responsible for the rise in median? In other words, a lower end home that would have weighed down the MLS median last year, is sold this year outside of the MLS entirely, causing the median to rise just by the nature that fewer low end homes in each district are going through the MLS and are going through foreclosure instead.
That’s not how interest rates behaved last fall, Tipster. They were down all fall and mid November they began to climb for six weeks. If you don’t want to admit that this past December was a good one you don’t have to. But your argument is not valid.
http://mortgage-x.com/trends.htm
Regarding Redfin data, does anyone actually know if auction sales are included in the data?
Zillow seem to mark non-arms length and other outliers as not being included in their Zestimates (and so I assume summary data). Redfin certainly marks some transactions as being foreclosures in individual property pages. So they could very easily exclude these from summary data reports.
a.e., exactly the same chart I used. November 09 to November 10, rates dropped about 0.85 or so according to the three year chart from your link (third chart from the top). So when comparing December to December, most of which went pending in November or earlier, I’ve been using November rates.
The only mistake I made was assuming 3.5% down, which I ballparked at a loan amount of $600K. We’ll use $480K (80% of a 600K median), and just to avoid the argument, say rates are down by 0.75 percentage points. That works out to a savings of around $3600 per year. Over a 7 year hold, it’s $25K.
Federal credit was $8K, and I don’t recall if there was a Cal credit in effect at the time. If so, it wasn’t $17K (I seem to recall $10K over 3 years, but I don’t know if it was in effect at the time). So the lower interest rates are worth more than the credits.
https://socketsite.com/archives/2009/11/homebuyer_and_a_new_homeowner_tax_credit_approved_by_se.html
Public apology for my earlier posts. There was indeed some bad data in my analysis. After looking deeper, I re-ran a clean analysis and it’s looking like 2010 is largely flat or even slightly down compared to 2009 (single family homes only).
I hate making mistakes. Sorry for any confusion. I’ll try to do better henceforth.
@Misha: Data I have gotten from MLS shows SFR and Condo prices basically flat YoY, but volumes up 10% and 17% respectively. Does not include TICs and multi-units. What say you on volumes YoY?
[Editor’s Note: Of course you mean the data you have gotten from the MLS shows that the median sale price has been “basically flat” (versus “prices” or values per se). In terms of year-over-year sales volumes, recorded sales were flat from 2009 to 2010. Or more precisely, down one (sale, not percent).]
Skinman Volumes on sfd’s and condos only?
Not clear on how volumes can be “up 10 and 17 percent” but, in your last paragraph, “flat.” Do you mean for all property types?
Maybe this level of detail is better pursued off-line. You can email me via my website and I’ll get back to you.
Yes, I win the bet and you are correct Mr. Editor, I was referring to “median prices”. However, neither you nor I know if “prices” are really up or down, whatever “prices” are in this context. When discussing market pricing we only have statistical tools to approximate values. This is getting silly.
See how lucky you are for the Internet, Misha. If it weren’t for me and A.T. calling you out, you’d be misleading the readers of your web site with incorrect statistics, when the name of the real estate game is to mislead people using actual statistics.
Bad data indeed.