San Francisco Listed Housing Inventory: 2/28/11 (www.SocketSite.com)
Inventory of listed single-family homes, condos, and TICs in San Francisco increased 1.1% over the past two weeks to 1,415 active listings. Over the past five years listed inventory levels have increased an average of 5.9% in San Francisco during the same two weeks.
Current listed inventory is up 15% on a year-over-year basis, up 19% versus the average of the past five years, up 55% as compared to 2006. On the demand side of the equation, listed sales were up 15 percent in January with 275 properties sold.
The inventory of single-family homes for sale in San Francisco is up 30% on a year-over-year basis to 593 homes while listed condo inventory is up just 6% to 822.
The percentage of all active listings in San Francisco have undergone at least one price reduction dropped one point to 30% as the percentage of active listings that are either already bank owned (85) or seeking a short sale (202) did as well to 21%, down 1% 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).
San Francisco Listed Housing Inventory Update: February 14, 2011 [SocketSite]
Will Pent-Up Demand Outstrip Pent-Up Supply? [SocketSite]
SF Listed Sales Volume Up 15% In January Driven By Low-Cost Areas [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by unwarrantedinlaw

    Inventory shminventory.
    I am an elderly man of nearly half a century. Not long ago, and in this dreary market, I sold a property for 850k that I had originally paid 150k for.
    I am old. I have seen 45 cent gas and $35 gold.
    Up or down 10% isn’t the issue, it’s the 550% moves that are important. We don’t see the 550% apples here on socketsite because we’re narrowly focused on the last few years. And we figure everyone knows that real estate sold for what seems like nothing decades ago.
    There are lots of potential buyers looking at this site and so now and then I comment that the long term upward moves can be stunning, so you have to be wary about predicting that prices will drop enough for you to buy a nice place.

  2. Posted by tc_sf

    “…, I sold a property for 850k that I had originally paid 150k for.
    I am old. I have seen 45 cent gas and $35 gold.”
    Perhaps you should look up “Inflation” on Wikipedia?

  3. Posted by Legacy Dude

    So it appears poor math skills are still a prerequisite for being a satisfied real estate investor/realtor. $850K is not 550% of $150K, it’s 566%. The gain is actually 466% anyway (850-150 / 150). And I’m sure, as always, that this phantom investment also had zero maintenance and carrying costs.
    I may be mistaken, but I don’t think gold has been at $35 since the early 1970s – about 40 years ago. But maybe savvy real estate investors begin following gold prices in elementary school.
    There are lots of potential buyers looking at this site and so now and then I comment that the bubble deflation can be stunning, so you have to be wary about buying since prices can fall after you buy a nice place.

  4. Posted by curious-georgina

    Why is the inventory of single family homes growing faster than condo inventory?
    Thanks!

  5. Posted by SFHawkguy

    And here is a chart of real house prices:
    http://cr4re.com/charts/charts.html?Home-Prices#category=Home-Prices&chart=RealHousePricesDec2010.jpg
    Sounds like unwarrantedinlaw might be a Boomer, in which case his experience is not likely to be representative of others going forward. Boomers that bought in the 70s, 80s, and 90s were uniquely positioned to do well with real estate. In my mind, government policies helped create the conditions that helped the Boomers: We had the mortgage interest deduction in the early 80s, financial deregulation in the late 90s to the early aughts, as well as Prop 13 in the 70s here in California. Those policies created or helped create the real estate bubbles that have been the wind behind the sails for the Boomers.
    Something needed to make up for the stagnant wages since the 70s and home equity and credit cards seemed to do the trick for a while.

  6. Posted by lol

    A number of boomers did refinance during the crazy bubble years. A lot of HELOCs were done to 40-50-somethings that were ogling all this “locked” equity that looked very unproductive…
    This fueled the classic car bubble, the revival of Harley Davidson, the financing of second homes. A lot of vanity/mid-life crisis purchases, but a lot of health care too.

  7. Posted by Mole Man

    More condos are affordable to buyers in the market, so they sell faster. Single family homes have higher prices, so it may take longer to find interested buyers who can pay.

  8. Posted by halfacentury

    Legacy Dude, you are correct. I also invested in gold in the mid 1960′s at the age of one. I was precocious and saw the inevitable demise of Bretton Woods. I was a bit early to that trade and my peers made fun of me at the time for worrying about dollar devaluation- well, they would have if any of us could actually talk. Then, in pre-school, the country was in the full throes of the Vietnam War which brought about inflation. You kids today know nothing about inflation nor about the housing markets. I lived it as pre-school lunches went up to six cents. That was when I went all-in on gold. By the time of the Smithsonian agreement, my peers no longer made fun of my predictions. I started my firm that year, KAM (Kindergarten Asset Management) collecting lunch money from my peers. In 1973, we had the oil crisis, lines for gasoline, Fran Tarkenton led the Vikings to the Super Bowl every year only to lose. We thought that was the bottom of his career until he started to host That’s Incredible.
    Ok, ok, while I am poking fun, I’m also pointing out that a lot of that initial post doesn’t ring true.
    Here is a long-term chart on housing:
    http://www.ritholtz.com/blog/wp-content/uploads/2009/06/case-shiller-updated.png
    Or, if you prefer, you can follow the reliable unbiased numbers from the NAR:
    http://www.businessinsider.com/real-house-prices-fall-to-2000-levels-update-on-nar-overstating-sales-2011-2

  9. Posted by Rillion

    I think they got the idea for those etrade ads from you halfacentury.

  10. Posted by Legacy Dude

    Thanks halfacentury. If you look back far enough you can easily make real estate a great investment. The island of Manhattan was supposedly purchased for like $25 in the 1600s. What’s it worth today, a few billion? Obviously real estate must be a great investment!
    Anecdotes like that are great advice for anyone with a time machine, but of zero value to those considering jumping into today’s market.

  11. Posted by MortgageMaker

    Another boomer here, bought a home ’89 that I still own, so I did OK. However, I knew plenty that bought in the 80s that had to sell in the 90s and were bringing a check to the closing to cover the mortgage balance. I also know that my paper gain to date is solely the result of good timing (i.e. luck) and govt policies, and will have to be repaid in a cheapened currency and a lower standard of living for the younger generations. It’s almost sickening to think about.

  12. Posted by djt

    SFHawkguy is correct, the government repeatedly goosed the housing market by changing the law, thus padding every homeowner’s income. My spouse and I recently bought (our small rental was disintegrating and becoming unlivable, and we found a place much better than comparable rentals in the area that was perhaps 20% more all in then the cost of renting). But when we bought, I told my spouse that we were unlikely to see any appreciation during the next 10 years due to higher interest rates; higher taxes; probably loss of the MID; lower wages all around; higher costs for healthcare; etc. All the things we need besides housing and removal of decades of government house price stimulus would weigh on real estate for a decade. 9 years left! I actually now think the house will increase in value just because at some point we’ll need to see a bout of inflation to get from debts.

  13. Posted by eddy

    I hesitate to post this cross-post to another post from a real estate agent; and I’m posting more for the charts / graphs; but I felt it was worth a look and found it interesting.
    See name link.
    Lots of issues, I know, but I haven’t seen too many charts on pendings?

  14. Posted by tipster

    Real good eddy. She compares with last year, when nearly everybody tried to close in Nov of 2009 to get the tax credits (which were subsequently extended). So of course pendings in Q1 2010 were down, people who might have bought in Q1 2010 accelerated their purchases to take advantage of the tax credits.
    If you click on my name link, scroll down to the graph and then check the box # sold (the one on the right) you can see sales remaining elevated in the last quarter of 2009 more than other years. That was a result of the tax credits that were due to expire in November. You can see the number of sales actually go UP in November. So many people who would has closed in Q1 10 closed earlier, thereby reducing their numbers in Q1 10.
    This year, the opposite happened. Sales were very low in the last half of 2010 and finally the sellers gave in and dropped prices (and some buyers look like they gave up and increased their offers), allowing more things to go into contract. So demand got pushed out of Q3 and Q4 and into Q1 of 2011.
    It’s also tougher to get a loan, making people stay in the pending phase longer, which increases pendings.
    No realtor will ever tell you the favorable comparison was even remotely affected by the tax credits, harder to get loans, slow or busy sales in the prior quarters etc. They just point to a stat and use that as evidence that you should “buy now” or “sell now”, the mantra of salespeople everywhere.

  15. Posted by FormerAptBroker

    unwarrantedinlaw wrote:
    > I am an elderly man of nearly half a century.
    Then SFHawkguy wrote:
    > Sounds like unwarrantedinlaw might be a Boomer
    I’ve never considered myself a Boomer, but since most people put Boomers as 1945-1964 I’m technically a Boomer since I was born in 1963 and if unwarrantedinlaw is “nearly” half a century I’m putting him a year older than me.
    > Not long ago, and in this dreary market, I
    > sold a property for 850k that I had originally
    > paid 150k for.
    I would be interested in finding out where this home that went from $150K to $850K was located. I’ve posted before that the home I bought in Burlingame in 1996 went up even more than that when I sold it in 2003. There are a lot of homes in Burlingame that “not long ago” were selling for $850K, but they were selling for $150K in the mid 70’s when I (and anyone else about my age) was in High School. It was 1976 when the first Burlingame home sold for $250K (It was a new home on a big lot in Burlingame Hills up from a rental my parents own and I still remember the look on my Dad’s face when he said “can you believe someone paid a QUARTER MILLION DOLLARS for a home in Burlingame”). I bet close to 70% of the Burlingame homes in 1976 were selling for under $150K (I was reading the real estate ads in the Times and the Examiner every day in ’76 and clipping “rent comp” ads for my day and looking for homes for sale that may be cheap due to problems (that we could fix and then rent the homes out).
    > I am old. I have seen 45 cent gas and $35 gold.
    I remember 31 cent gas, not because I was driving, but because Shell was giving away a free Hot Wheel with every fill up and my Dad (who would not pay the 35 cents a gallon at Shell) explained to me as we were filling up our car at the no name station on El Camino in San Mateo how foolish it was to buy 20 gallons of gas at 35 cents a gallon paying 80 cents extra to get a “free” 25 cent Hot Wheel. I remember gold going from around $100 to around $800 when I was in High School because EVERYONE was talking about the price of gold back then ALL THE TIME…
    > There are lots of potential buyers looking at
    > this site and so now and then I comment that
    > the long term upward moves can be stunning, so
    > you have to be wary about predicting that
    > prices will drop enough for you to buy a nice
    > place.
    Thanks for letting us know that the price on a home in the Bay Area might go up quite a bit in 30 years (where according to most life insurance companies people our age have more than a 50% chance of living in a coffin six feet under in Colma). One of the main reasons that Bay Area home prices went up by so much in the past 40 years is the number of women entering the workforce. As a kid I had friends at public schools in Burlingame, Hillsborough and San Mateo and I can’t remember ever hearing about a single Mom that worked full time. Today most of the Mom’s work full time (and jobs are not exactly pouring in to California like they were when I was a kid and all the farmers in the South Bay were selling orchards to high tech firms who were hiring people who could buy a home for three times what they made in a year). ..

  16. Posted by halfacentury

    SFHawkGuy, one more to the list (tax change during the late 90′s):
    http://www.nytimes.com/2008/12/19/business/19tax.html
    Separately, here was also the big political push in the early 2000′s to lower lending standards and increase home ownership. . .

  17. Posted by A.T.

    Here are some preliminary numbers on Feb MLS sales:
    SFRs
    Feb 2011 – 99
    Feb 2010 – 122
    Condos/TICs
    Feb 2011 – 133
    Feb 2010 – 138
    The 2011 numbers will go up a bit as late recordings are made. But it looks like SFRs will be down a little YOY and Condos/TICs will be slightly up. Not a lot of competition among buyers out there. Will we have a “Spring bounce”?

  18. Posted by tc_sf

    DQ information about cash buyers
    Record 31% of CA purchases were all cash up from a decade average of 14%. But some data in the article points to this being predominated by the lower end.
    About half of cash buyers were absentee’s. About half of the bought homes were foreclosures. Median price of cash purchase home was $160k compared with $239k for all CA homes.
    SF has a lower then average 22%
    http://www.dqnews.com/Articles/2011/News/California/CashSales/CACash110228.aspx

  19. Posted by sfrenegade

    The Prestige Index is available for Q4 of 2010:
    http://www.firstrepublic.com/lend/residential/prestigeindex/sanfrancisco.html
    The index at $2.604M was up 1.5% from Q3 and 3.6% YOY from Q4 2009. The index is down about 12% from the Q3 2007 peak of $3.085M and is somewhere between Q4 of 2004 and Q1 of 2005 in nominal terms.
    In real terms, the Prestige Index for Q4 of 2010 is about 0.5% above the Q1 and Q2 2003 trough and about 1% above the Q1 of 2002 trough when adjusted for inflation by CPI.
    As mentioned before, the Prestige Index measure prime housing in eight Bay Area counties, and not just San Francisco County.

  20. Posted by EBGuy

    Pent up supply appears to be holding steady over the past couple of weeks. Currently, 1565 homes are in some state of foreclosure (NODs, NOTS, bank owned) in Ess Eff. This is compared to 1572 homes two weeks ago. Standard disclosures about noise in the data; information deemed reliable but not guaranteed.

  21. Posted by tc_sf

    Interesting visualization of housing price changes over the last few years.
    On a gross scale you can see that the price changes have a strong national component with SF changes not too far out of line of other metro areas.
    http://hosted.ap.org/dynamic/files/specials/interactives/_business/home-price-tracker/index.html

  22. Posted by lol

    Has anyone read the Chronicle article on Vallejo this AM?
    This is a very extreme outcome of the other side of the bubble years, from irrational exuberance to blight and widespread crime.
    The bubble incited the city to overspend and under-tax. Now the bubble has burst, Vallejo RE is at least 70% cheaper than in 2006. As a result the city is bankrupt with no end in sight and the city cannot properly do its job of protecting its own constituents.
    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/02/27/MNFH1HIG2B.DTL

  23. Posted by G.M.

    I know this may be a silly question but is it a given that home prices will continue to fall in the SF bay area? We are trying to decide whether or not to sell now or wait another year?

  24. Posted by diemos

    “I know this may be a silly question but is it a given that home prices will continue to fall in the SF bay area? We are trying to decide whether or not to sell now or wait another year?”
    Always in motion is the future. Do your own analysis and make your own decisions and then, at least, you will have the satisfaction of being the captain of your own ship.
    At the moment, all shall be as Ben Bernanke wills it to be. Ask him.

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