February 17, 2012

Recorded San Francisco Sales Fall 1.8% In January, Median Ticks Up

San Francisco Sales Volume And Median Price: January 2012 (www.SocketSite.com)

Recorded home sales volume in San Francisco fell 1.8% on a year-over-year basis last month (327 recorded sales in January 2012 versus 333 sales in January 2010), down 34.5% as compared to the month prior, right in line with an average December to January drop of 34.3% over the past seven years. An average of 366 San Francisco homes have sold in January since 2004 when recorded sales volume hit at 558.

San Francisco's median sales price in December was $602,500, up 2.1% on a year-over-year basis and 1.3% as compared to December in which the median sale price was down 7.8% year-over-year.

For the greater Bay Area, recorded sales volume in January was up 10.3% on a year-over-year basis, down 26.9% from the month prior (5,479 recorded sales in January '12 versus 4,966 in January ’11 and 7,494 in December '11) while the recorded median sales price was down 3.6% year-over-year, down 7.3% month-over-month.

Last month distressed property sales – the combination of foreclosure resales and “short sales” – rose to 51.9 percent of the Bay Area resale market. That’s up from 48.5 percent in December and down slightly from 54.5 percent in January 2011.
Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 28.0 percent of resales in January. That was up from a revised 27.8 percent in December, and down from 35.0 percent a year earlier. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 15 years is about 9 percent.
Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 23.9 percent of Bay Area resales last month – the highest for the current housing cycle. That was up from 20.7 percent in December and up from 19.5 percent a year earlier.

At the extremes, Sonoma recorded a 29.8% increase in sales volume (a gain of 97 transactions) on a 4.2% decline in median sales price, while Napa recorded a 21.2% decrease in sales (a loss of 25 transactions) on a 5.6% increase in median price. The median sales price in San Mateo dropped 7.8% as sales increased 17.7%. Only San Francisco and Napa counties recorded year-over-year declines in sales volume.

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 Market Logs Higher Sales, Lower Prices [DQNews]
San Francisco Sales Activity Ticks Up In December, Median Ticks Down [SocketSite]

First Published: February 17, 2012 12:00 AM

Comments from "Plugged In" Readers

from the DQNews press release:

The typical monthly mortgage payment Bay Area buyers committed themselves to paying last month was $1,233, down from $1,336 in December, and down from $1,412 a year earlier.

This is excellent news for the BA economy. Today's buyers have more disposable income thanks to muted purchase prices and lower interest rates.

That's $2000/year that can be spent or invested in things more productive than housing.

Posted by: lol at February 17, 2012 10:31 AM

My 2007 purchased condo in South Beach just appraised for more than I paid, i did a refi save 620/mo.

A coworker living in an Avalon rental building close by got a 60 day notice, at same time, for a 420/mo rental increase.

Posted by: clark at February 17, 2012 10:59 AM

@lol: yeah, that $2000 is gonna make a *huge* difference. For most people that's, what, one more day at the spa for two and dinner out? Or two months' car payments?

Posted by: Jimmy (No Longer Bitter) at February 17, 2012 12:40 PM

The other thing is that lol assumes that most mortgagors have the ability and wherewithal to invest that $2k per year marginal increase in disposable income in something more productive than housing.

Posted by: Brahma (incensed renter) at February 17, 2012 1:02 PM

^^^Yes, this is why I said "can", not "will".

For a typical BA family, 2K is actually somewhat a big deal.

Say you have a typical BA homeowner couple making 90K. After state/federal/property taxes they are left with 75K. Mortgage is 15K. They have 2 kids which means 25K/Y in school and stuff. Groceries will be 15K. Car expenses with 2 cars will be 8K.

In all, fixed minimal expenditures are roughly 63K for 75K official pay minus all taxes.

You're left with 12K when all is said and done. Probably less because your house doesn't maintain itself and stuff happens.

Yes, 2K a year does matter a lot. Maybe not in the world you guys live in though.

Posted by: lol at February 17, 2012 1:17 PM

And yes 2K can be put to a passive productive use, like saving for college. 2K/Y invested over 18 years at 5% gives you 56K. There's nothing more productive than properly educating your kids.

Posted by: lol at February 17, 2012 1:21 PM


lol wrote:

> For a typical BA family, $2K is actually
> somewhat a big deal.
> Car expenses with 2 cars will be $8K.

If gas stays near $4.00/gallon my wife and I will be close to $8K a year in just gas over the next year... The US Department of Transportation says that the typical American family in the 35-54 year age group will average 15,291 miles per car and the IRS says the average mile will cost 55.5 cents or $8,468 per car.

The "typical" Bay Area (home owning) family drives a nicer than average car and takes a much bigger depreciation hit than average and also pays more for gas and maintenance so the "typical" Bay Area family probably has an average cost per mile closer to $0.70/mile or over $20K for two cars (I keep detailed records of my cost per mile for tax purposes and I have not been under $0.70/mile for 10 years).

P.S. If you want to get a good idea of the real cost per mile of most (newer) cars check out: http://www.edmunds.com/tco.html

Posted by: FormerAptBroker at February 17, 2012 3:39 PM

FAB, yes, but would a 90K/y average BA family w/2 kids and a mortgage really burden itself with 20K/Y in cars? It sounds more like something a 200K/Y family would do.

Posted by: lol at February 17, 2012 3:51 PM

The typical Bay Area family doesn't need to drive as far to get groceries or other things as much of the rest of the country.

Posted by: [anon.ed] at February 17, 2012 4:14 PM

I do 3K tops myself per year. My old beater has cost me $17K in the past 6 years including purchase price, repairs, maintenance, insurance, gas. I have spent 4K in bicycle-related stuff during the same period. I log roughly as many miles on my bike as on my car ;)

Posted by: lol at February 17, 2012 4:48 PM

The typical 90k BA family are not homeowners with mortgages. I can't even imagine how someone with that low of an income, and two kids, could ever save up a down payment, unless that money's coming from something other than income -- in which this discussion about tight finances is misplaced. This is a bizarre conversation.

Posted by: shza at February 17, 2012 5:10 PM

I just love these "$/mile" discussions! Let's do one for the M3:

Purchase price: $68,000
Depreciated value after 4 years & 33k miles: $37,000
Extended warranty and maintenance cost (2 more years): $6,300

Tires: $1400 per set, each set lasts ~10k miles, so $0.14/mi on tires alone.
Gas: 13.7 mpg combined and only takes premium, so $0.306/mi on gas.
Maintenance: included
Insurance: $3000/year

Did I miss anything?

Let's average that out.

8,375 miles per year driven on average.

$2,562.75 for gas
$1,172.50 for tires
$3,000.00 for insurance
$7,750.00 in depreciation

Total ownership cost: $14,485.25 per year, or $1.73/mile

Can anyone top that?

Posted by: Jimmy (No Longer Bitter) at February 17, 2012 5:26 PM

Where is this imaginary average person living while paying this $1,233 mortgage? How big is this imaginary place. You could not buy a studio in SF for this place. Anyone saving 2k a year at the same time raising 2 kids is not going to have an epiphany to save this money. Are you serious to even think this?

Posted by: clark at February 17, 2012 8:39 PM

Thank you, shzya, I was going to say exactly the same thing. Unless they're living in certain parts of East Palo Alto, Richmond (the one in the East Bay) or similar city, its obvious that such a family would be priced out barring significant down payment assistance from The Bank of Mom and Dad.

Posted by: Brahma (incensed renter) at February 17, 2012 9:43 PM

How does this reconcile (or not..) with the Redfin numbers posted earlier in week?

anyway, sales doing well considering that inventory is falling off a cliff (40%+ down YOY I think...)

Posted by: REpornaddict at February 18, 2012 11:32 PM

I'd love to hear any thoughts on this anecdotal tale of a hot SF condo market from our favorite left-wing rag (click my name).

Posted by: Po Hill Jeff at February 19, 2012 3:34 PM

Hmmm...1995 BMW M3 Lightweight
$29,000 purchase
$25,000 value now after 11 years and 60,000 miles
5000 miles per year
24 mpg average @ $4 per gallon
Maintenance and repairs (half by self) $500 per year
$1000 in tires every 25,000 miles
$700 in insurance per year

$0.52 per mile, pretty close to the IRS amount. But I would give up about 3 sec per lap at Infineon.

We are way beyond the average mortgage payment but (except for the BMW date car) spend no more than $15,000 on any car, ever.

Posted by: djt at February 20, 2012 9:22 AM

That is a very rare and collectable car. Very few cars are going to hold their value of 11 years like that.

Posted by: NoeValleyJim at February 20, 2012 11:11 AM

lol: wrote:

> FAB, yes, but would a 90K/y average BA family w/2 kids and a
> mortgage really burden itself with 20K/Y in cars? It sounds more
> like something a 200K/Y family would do.

While $90K a year is probably an above average family income in the Bay Area, we are taking about families that own homes. I’m guessing that $90K a year is a below average income for Bay Area “families” that own homes (plenty of “seniors” that bought in the 1960’s make less than $90K but I’m betting that only a small number of home owning families make that little)…

Then [anon.ed] wrote:

> The typical Bay Area family doesn't need to drive as far to get
> groceries or other things as much of the rest of the country.

As a realtor that meets more homeowners (and potential homeowners) than I do I’m wondering if you will agree with me that the average home owning family in the Bay Area makes more than $90K and drives a car less than 10 years old (the “average” car in America is a little over 10 years old).

P.S. I’m guessing that lol may be looking at “out of pocket” car costs forgetting depreciation. A five year old Honda Accord that cost $25K new will only be worth about half that much today (so a family with two Honda 4 year old Accords will have a depreciation expense of $5K a year, and a family with a couple 4 year old Lexus SUVs will have a depreciation expense of about $10K a year.

P.P.S. To djt for years I thought I spent "around $500" to keep cars on the road, but it is easy to forget that a set of pads and rotors is over $500 these days and when you do your own work you save on labor, but end up buying thousands of dollars of tools (like a digital micrometer to check your rotor thickness, an 18V impact gun and impact quality allen sockets to get the rotor set screws out...)

Posted by: FormerAptBroker at February 20, 2012 1:47 PM

> $25,000 value now after 11 years and 60,000 miles

1997 m3, 80k miles, $15.5k:
http://www.bayarearidersforum.com/forums/showthread.php?t=393585

i doubt anyone is going to pay an extra $10k for a 2 year older car with 20k fewer miles.

you can get an e46 for that amount.

Posted by: * at February 20, 2012 3:37 PM

FAB, you're totally confusing BA and SF on all points.

90K/Y is higher than the BA median which is 65K.
SF is 60% renters, meaning the median SF-er is most likely a renter. But the BA is totally the opposite at 65% owners, meaning the median BA-er is a home owner and can afford the 300K+ house. This owner is saving 2K per year over last year, and it does matter.

I suggest getting out of SF once in a while.

Posted by: lol at February 20, 2012 3:46 PM

shza wrote:

The typical 90k BA family are not homeowners with mortgages. I can't even imagine how someone with that low of an income, and two kids, could ever save up a down payment, unless that money's coming from something other than income -- in which this discussion about tight finances is misplaced. This is a bizarre conversation.

Not so bizarre.

Yours is a very SF-centric answer to a BA comment.

What's really interesting is to see you and FAB confusing Marin, SF and the Peninsula for the BA. Around 1/2 of the BA is across the Bay Bridge and does not fit your narrow view of the BA.

Plenty of families live with 90K/Y and have bought homes these past 3 years with that income or even less in the EB.

Of course, if you never cross the BB you'll never see that.

Posted by: lol at February 20, 2012 3:57 PM

lol wrote (on Feb 17th):

> For a typical BA family, 2K is actually somewhat a big deal
> Say you have a typical BA homeowner couple making 90K

Then lol wrote (on Feb 20th):

> What's really interesting is to see you and FAB confusing
> Marin, SF and the Peninsula for the BA. Around 1/2 of the
> BA is across the Bay Bridge and does not fit your narrow
> view of the BA.
> Plenty of families live with 90K/Y and have bought homes
> these past 3 years with that income or even less in the EB

If lol would have come out and said: “Say you have a family making $90K that has managed to buy a home in one of the low cost areas in the East Bay in recent years $2K is actually somewhat of a big deal” I don’t think anyone would have any problem with the comment.

Posted by: FormerAptBroker at February 20, 2012 4:51 PM

What FAB said.

BTW, lol, I actually live across the Bay Bridge (in Piedmont).

Posted by: shza at February 20, 2012 5:11 PM

FAB and shza are taking the "oh, you should have said it this way" road.

Sure. Whatever.

Bay Area. Median. Clear enough?

Look it up. There's a big world out there outside of Piedmont.

Posted by: lol at February 20, 2012 11:17 PM

By the way, all the numbers quoted are from the DQ News link. Before shza and FAB go back to their out-of-context outrage.

Posted by: lol at February 20, 2012 11:25 PM

25k/y in school and stuff? Really? Is that two private school tuitions or something?

Posted by: NoeValleyJim at February 21, 2012 12:03 AM

lol, *you* introduced the concept of the "typical" 90k family. As you later admitted, that HHI is "typical" in SF but *not* in the Bay Area generally.

God forbid FAB and I assume that you were talking about SF and not the worst parts of Richmond, given your own premise.

Posted by: shza at February 21, 2012 12:30 AM

^^^ you definitely jumped the gun. The post was very clear and the link as well.

NVJ, we know you have a different experience from most of us about what it takes to raise kids in the rough ;)
1000/month/kid in extra outlays is the bare minimum. Your kids need clothes, lunch money, tuition, some activities outside.

Posted by: lol at February 21, 2012 7:38 AM

"Your kids need clothes, lunch money, tuition, some activities outside."

I've never understood this current generation of parent's desire to purchase playtime and activities. No need to shuttle kids to and from retail activity establishments if we create safe neighborhoods for kids to coordinate their own fun. Plus kids learn important life skills of creativity, resourcefulness, and collaboration when they're in charge instead of a paid facilitator.

Posted by: The Milkshake of Despair at February 21, 2012 9:40 AM

Is working as a janitor at their elementary school consider an outside activity? Cause I hear that is the only way to develop a work ethic.

Posted by: Rillion at February 21, 2012 10:31 AM

MoD, "some" will depend on your preferences.

Another expense I left out for kids is saving into a college fund. At least 250 a month per kid to cover a part of 3-5 years of housing, food and tuition when they get of age. They can get a student loan or a part time job to cover the rest.

Posted by: lol at February 21, 2012 10:53 AM

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/28/BU6J10D6J9.DTL

90k for a married couple is completely normal in the Bay Area.

You can get a pretty nice house for $400k in Concord. These numbers aren't that crazy at all, except for maybe the $1k/month per kid on clothes and school lunches. Summer's can get expensive though.

Posted by: NoeValleyJim at February 21, 2012 12:36 PM

NVJ,

I know people who spend more than 3 times that per kid for private school only. And I know others who spend less than that. What counts is what a "typical" family does, not how low you can go. By any measure 1000 is on the low side, even for Concord. But I know where you're coming from. What your kids consume has become a social statement for some and it doesn't have to be this way.

On another note, most in SF do not see what's going on outside of their almost-island. Simply follow a commuter on the BART to the EB and you'll enter a totally different economical terrain. There's a reason people are ready to commute 1 hour more every day to come to SF. The difference can be 5K, 10K or much more for many jobs. What counts is how much is left after all your fixed costs. This is the difference between a good education and the bare minimum for your kids, or between retiring at 65 or 70 because SS doesn't cut it, or taking an annual family vacation or not.

Having cheaper housing costs through cheaper homes or cheaper mortgage (of course I favor the former) is a fantastic game changer for many, if you are lucky enough to have a stable job.

Posted by: lol at February 21, 2012 2:10 PM

Just a few quick points:
--> "Livable SFH Fixers", ie places that are serviceable in nice neighborhoods have not lost any value, and are actually skyrocketing in price in the last couple months (see the place in Noe Valley on Caesar Chavez that just sold for an example).
--> Despite people trying to say that SF and the EB are comparable, they are not. It's a completely different lifestyle, you work an extra day a week (time spent commuting), spend an extra couple hundred a month on Bart, and miss out on many of the things that make San Francisco such a special city. You may get to go on an annual family vacation, but you spend 3 hours a day that you are actually awake with your family.

Posted by: Time for QE3! at February 21, 2012 6:01 PM

@Time for QE3!

Um, I guess you're assuming that everyone works in SF? Many couples I know are split between East Bay/SF or even East Bay/South Bay, so they either live at the center of the commutes, or one person gets a great commute and the other suffers.

Posted by: RenterAgain at February 21, 2012 8:04 PM

I've said it many times here: my commute from Piedmont to the FiDi is considerably faster than our commute from Bernal was. That said, we're both lawyers at big firms, so 3 hours a day awake with family is aspirational anyway.

Some parts of EB are comparable to some parts of SF. (Except when the Bridge is closed.)

Posted by: shza at February 21, 2012 10:30 PM

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