Recorded home sales volume in San Francisco fell 7.0% on a year-over-year basis last month (533 recorded sales in June 2011 versus 573 sales in June 2010), up 8.3% as compared to the month prior versus an average May to June decline of 1.6% since 2004.
An average of 683 homes have sold in June since 2004, with 938 sales in June 2004.
San Francisco’s median sales price in June was $665,000, up a nominal 0.2% compared to June 2010 ($663,500), up 0.8% compared to the month prior.
For the greater Bay Area, recorded sales volume in June was down 4.5% on a year-over-year basis, up 14.5% from the month prior (7,998 recorded sales in June ’11 versus 8,373 in June ’10 and 6,988 in May ’11) as the recorded median sales price fell 7.9% year-over-year, up 1.5% month-over-month.
Last month’s sales were the lowest for the month of June since 2008, when 7,178 homes sold. June sales have ranged from a low of 7,118 in 1993 to a high of 15,735 in 2004, while the average is 10,129. Sales last month fell 21.0 percent below the June average. June is normally a strong month and, among all months, it’s had the highest number of sales most often – seven of the past 23 years.
In June last year – the peak month for 2010 – sales were bolstered by state and federal efforts to stimulate the housing market via homebuyer tax credits. Those credits had expired or been largely depleted by July 2010, when sales plunged 19 percent from the month before and 23 percent from the previous July.
At the extremes, Napa County recorded a 17.5% drop in sales volume (a loss of 25 transactions) on a 15.6% decline in median sales price while Marin recorded a 8.3% increase in volume (up 23 transactions) on a 6.9% decline in median price. San Francisco, at 0.2%, was the only county to record a year-over-year uptick in median sales 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 June Home Sales Surge, Median Price Edges Up [DQNews]
∙ San Francisco Recorded Sales Activity In June: Up 2.1% YOY [SocketSite]
∙ San Francisco Recorded Sales Activity Down 20.1% In May [SocketSite]
Can someone give some insight as to how they think they new FHA limits will impact SF? I’m in the position to buy but figured I’d wait a year or so. I’m getting a bit of the “buy now before the limits change” from others so I wanted to get some feedback here from both sides of the fence. Or maybe we can start a new thread?
Tough to say what the limit change will do in the next 6 months.
On the one hand, if you get a bunch of sellers selling now rather than over the next 6 months, prices in the sweet spot (from the lower limit of 10% above the new loan max to an upper limit of 20% above the current loan max) will hold for a while due to lower supply.
On the other hand, if you get a bunch of buyers who would have bought over the next six months who instead buy now, prices will fall by a lot after the limits change because potential buyers will have all bought and demand will plummet.
If the above two forces balance out, then prices probably are untouched until the effects of the accelerated sales and accelerated buys disappear, probably around April of next year.
Ultimately, though, it’s going to hurt prices. First in the sweet spot and then up the chain. They didn’t increase the max in order to hurt prices: they did it to prop markets up. Without the prop, the markets fall. Maybe something else props them up a bit.
In the end, prices collapsed in Japan: they tried all this same stuff. Worked for a while there. Didn’t last. The amount of the decline surprised everyone there. I’m sure I’ll be surprised by the amount of the drops here too. Probably more than any of us can fathom. It sure worked that way over there.
Anybody who is telling you to “buy now before the limits change” should be ignored for all future real estate advice. I say this because they are ignoring the potential of what may happen after the limit change, which makes me wonder what else they are ignoring.
The limit change will either have no effect in SF, or push prices downwards, depending on how important FHA loans are in SF right now. I believe FHA is still making up a sizable portion of mortgages, so I suspect there will be a noticeable difference.
The hard part comes in if you are serious about buying in a year, prices may not come down enough to make the same property qualify for FHA without a significantly larger down-payment.
My general recommendation for anybody thinking about buying now, is plan on buying a place where you will be fine living in for at least the next 10 years, and be prepared for the value to be lower for a good portion of that time.
If you buy now with that understanding I think you will be fine, but I think from a purely financial perspective it’s better to wait.
Good luck either way.
I stole this from the comments over at CR -I would agree.
said John Walsh, DataQuick president. … “Let’s keep in mind, however, that last month was not a particularly strong June, historically speaking, and one month’s increase in sales from the prior month doesn’t constitute a trend.”
Possibly, this is signalling the end of the POST TAX CREDIT DAMAGE – only lasted 12 months before the trend line returned to pre tax credit levels … which… are ….. still…. crappy.
But the Bay Area does have some job creation going. Not as soft as the Central Valley….job wise.
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CalculatedRiskwrote on Thu, 7/14/2011 – 1:22 pm
Sippn, good point. That tax credit was a disaster. It was an example of rent seeking combined with desperate policy makers – a horrible combination. It was sponsored by Isakson, the Senator from NAR (I mean Georgia).
For those who want to put a label on the housing tax credit, “anti-Keynesian” and/or “rent seeking” are probably the best.
I rarely comment on policy, yet I must have wrote 6 or 7 posts about how dumb the tax credit was. Geesh – I hate it when policymakers go “brain dead”.
Of course we are in one of the “brain dead” periods right now, although I assume reason will prevail (if it doesn’t … well, I will be writing about that!)
best wishes
“I’m in the position to buy but figured I’d wait a year or so. ”
i’ve been waiting since 2005 (looking at peninsula or south bay, not sf) and i haven’t regretted it.
every year there have been better houses at better prices. i still see downward pressure so i’m in no hurry to buy.
I’ve been aiming to buy by the end of this year, but the more news articles I read lately about real estate probably declining further into late 2012, I’m more inclined to wait. I’ve waited several years, so another year or two won’t kill me. Yes, it’s true; bigger and better houses show up either in foreclosure or a short sale (which there are MANY).
The lower limits will put downward pressure on sales price, so housing will slider further. It is much more difficult now to qualify for a loan, and with lower loan limits, buyers will have to come up with much larger down payments . . . which many don’t have . . . which means many fewer buyers . . . which means sellers will have to face reality and slash their wish prices. In the meantime, my down payment just grows and grows and grows. *grin*
*, you must not be looking in Palo Alto, Los Altos or Menlo Park as prices are up substantially over winter/spring 2009.
^^^ I work in SF, so I’m looking to buy here or very nearby. Who’d want to commute into the city from PA, LA or MP?
IB, my comment was addressed to “*” who posted above you at July 14, 2011 2:52 PM
Life is too short to have a long commute
i work in palo alto, but i have no interest in buying a PA home.
paying $1.2M+ for a 50 year old 1500sqft home is insane; especially if you don’t have kids and don’t use the PA school system.
I am in position to buy. I am looking at the low end of pricing. I saw a unit in San Francisco , which I can get for $267K – jr 1 bedroom. Should I wait? I can’t see how much lower can low end place can go down. I can see the 700K+ places continue to drop but there isn’t much low end in SF for
Pendings are flat with last year (and about 10% below 2009). So look for continuing low-ish sales volume in the next few months.
It will be interesting to see what happens on loan limits. NAR has already gotten some legislators in high-price states to try to keep them high – I doubt there is any appetite for it, but who knows:
http://www.marketwatch.com/story/bipartisan-bill-backs-high-conforming-loan-limit-2011-07-15?link=MW_latest_news