August 15, 2012
Recorded San Francisco Sales Up 27.7% In July (Year-Over-Year)
Recorded home sales volume in San Francisco rose 27.7% on a year-over-year basis last month (567 recorded sales in July 2012 versus 444 sales in July 2011), down 3.2% as compared to the month prior but versus an average June to July decrease of 10.6% over the past seven years. An average of 594 San Francisco homes have sold in July since 2004 when recorded sales volume hit 893.
San Francisco's median sales price in July was $714,000, up 5.8% on a year-over-year basis, up 0.1% as compared to June in which the median was up 7.3% year-over-year.
For the greater Bay Area, recorded sales volume in July was up 22.9% on a year-over-year basis, down 1.4% from the month prior (8,461 recorded sales in July '12 versus 6,887 in July ’11 and 8,577 in June '12) on a recorded median sales price which was up 12.6% year-over-year, up 1.0% month-over-month.
It appears that roughly half of the 12.6 percent year-over-year gain in July's median sale price can be attributed to a shift in market mix, where the overall regional median is tugged up by a higher share of sales occurring in the mid-to-upper price ranges. In July, price levels for the lowest-cost third of the Bay Area's housing stock rose 9.6 percent year-over-year, while they rose 7.8 percent in the middle and increased 1.2 percent in the top third of the market.
Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 38.5 percent of last month’s purchase lending, the highest since 38.6 percent in December 2007. It was up from a revised 38.4 percent in June, and up from 33.4 percent a year ago. Jumbo usage dropped to 17.1 percent in January 2009. Before the credit crunch struck in August 2007, jumbos accounted for nearly 60 percent of the Bay Area purchase loan market.
The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,522, down from $1,532 in June, and down from $1,525 a year ago. Adjusted for inflation, last month’s payment was 45.6 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 59.8 percent below the current cycle's peak in July 2007.
At the extremes, Marin recorded a 45.7% increase in sales volume (a gain of 106 transactions) with a 3.9% increase in median sales price while Solano recorded a 1.0% increase in sales volume (a gain of 6 transactions) with a 1.3% increase in median price. The median sales price was up 32.6% in Napa with 30 more sales, an increase of 28.6%.
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 Home Sales and Prices Continue Upward Trend [DQNews]
∙ Recorded San Francisco Sales Up 9.9% In June (Year-Over-Year) [SocketSite]
∙ San Francisco Recorded Sales Activity Down 1.8% In July [SocketSite]
First Published: August 15, 2012 10:25 AM
Comments from "Plugged In" Readers
Its utterly insane to me that sales are up so much when inventory is so restricted (I think just over 1 month of SFHs right now!!!). Too much money chasing too few properties right now!
and positive numbers across the board - all regions, both medians and prices.When was the last time that happened..??!!!
Congrats to those that avoided the 'bear trap' last year, and either bought or held!! Anyone who sold then was an idiot.
Posted by: REpornaddict at August 15, 2012 10:53 AM
Speaking of limited inventory, does anybody have any stats (official or otherwise) on what percent of sales go in to the MLS (and count as inventory) versus are sold as "pocket listings" (and presumably don't get counted as inventory)?
Which segments are more likely to be sold as pocket listings? Homes, condos, under $1 million, over $1 million, certain neighborhoods, what?
Last question, do agents share pocket listings with all the other firms in town, or do they only market and sell them "in house" (i.e., to keep the buyer and seller commissions in the same firm)?
Posted by: DataDude at August 15, 2012 11:07 AM
@DataDude – while I can’t speak to your question broadly, I can provide some anecdotal support from my own experience. I recently purchased a condo in SF. It was a pocket listing. My agent was not from the same agency as the sellers, but I believe I was the only potential buyer from another agency invited to see it. It sold for less than $1 million, but not by much. The listing did end up on the MLS too, but only after close of escrow as a sold property.
Posted by: SF at August 15, 2012 1:15 PM
Man, I'm so glad I ignored all the doom sayers and bought a SFH in the mission back in 2010 when I only had 2 other bidders to compete with. It would be near impossible to buy a house 1/2 this nice now without competing against 30 other buyers....
To the doom and gloom crowd I say "neener neener neener!"
Posted by: Big V at August 15, 2012 1:42 PM
I still think its a bit too early in the cycle for neener neener comments. There are certainly some factors that could stunt growth / appreciation. That said, the market here continues to do very well on an absolute and relative basis.
Posted by: eddy at August 15, 2012 1:55 PM
Still, Big V's post is a refreshing response to the grave dancing we saw these past 3 years ;)
Posted by: lol at August 15, 2012 2:23 PM
CS results should be coming out fairly soon, and I expect more strength there as well. It is definitely too early to declare victory as Eddy says...but LOL's post did make me "laugh out loud". Tipster, where are you?! ;-)
Posted by: Lance at August 15, 2012 2:34 PM
"Man, I'm so glad I ignored all the doom sayers and bought a SFH in the mission back in 2010 when I only had 2 other bidders to compete with."
I would be happier you ignored the "Scare tactics are dead. San Francisco never really took a price hit and it won't, either" crowd and bought after the market corrected! Nice job!
Posted by: nonanon at August 15, 2012 3:59 PM
On my side I had no competing bids. 2010 was definitely a buyer's market.
Posted by: lol at August 15, 2012 4:11 PM
as far as I can tell, the market in the mission has not corrected any lower than in 2010. It seems solidly up since then.
The strong process of urban renewal there seems to have counteracted downward pressure over the last two years.
Posted by: Big V at August 15, 2012 5:30 PM
"as far as I can tell, the market in the mission has not corrected any lower than in 2010. It seems solidly up since then."
I agree, good timing! Mission was much cheaper in 2010 than 2007/2008. You were smart to listen to the scare tactics and ignore the bulls!
Posted by: nonanon at August 15, 2012 6:04 PM
we bought in 11/2009 after sitting on the sidelines for quite a few years. prices seemed too high before then and there was a lot of koolaid drinking in the form of gimmicky lending and buying beyond one's budget. remember reverse equity loans or one rincon being completely sold out in weeks to speculators?
we watched an acquaintance or two lose homes in the bay area - due to refinancing for non-home expenses. we suspect friends will never get our rates as they are still underwater. the bears weren't wrong, but their continual gleeful comments on others' poor choices and personal misery is unseemly at this point and in the end it comes down to modeling and math that no longer supports their thoughts.
the rent vs. buy tables finally said buy for us so we did (and with a 30 yr loan we have no worry about ARM resets or interest rate rises). the lack of undeveloped land, the trend toward rent increases, and a continuous influx of new high skilled workers, all seemed to say now or never san francisco.
we still thought we were spending a lot and then spent more remodeling our duplex during most of 2010.
our last apartment listing was answered only by computer scientists with PhDs and a few MBAs working in "sustainability". it rented less than 72 hours after it hit craig's list.
being a landlord IS work, but a couple of re-fis and one tenant change since purchase and our current monthly costs, including taxes and insurance, are in the 3 figures. our appraisal (for whatever that's worth) says we're up $2 for every dollar spent and our realtor says it's more likely $2.50.
in june we watched a comparable pre-remodeled home sell for $335K more then we paid for ours to an all cash offer by a developer who is remodeling and turning that building into a pair of condos. our house was delivered vacant; that house had a tenant to buy out.
we nervously laughed a little knowing both that we couldn't afford to play the remodeling game we had already played (thank god construction loans were nonexistent in 2010) and that we wouldn't dream of paying the rent on the unit we own and now rent.
bears; bulls. crazy town; crazier times.
Posted by: modernedwardian at August 15, 2012 10:23 PM
congrats, modernedwardian! well played.
Posted by: curmudgeon at August 16, 2012 7:13 AM
modernedwardian... similar story here - we bought a tri-plex in 2010 after years of thinking we'd never be able to even buy a condo. The place was vacant, so we set the rents on the other 2 and live in the biggest unit. We would have had to leave SF with the increase in rents over the last 2 years, but now we are benefitting from it.
Re: bulls vs. bears... I have always found the bull perspective of 'buy now or be priced out forever' way more unseemly than a little schadenfreude on the part of bears. The bull perspective is what actually got a lot of people into trouble; the bear perspective just highlighted it after the fact.
Posted by: rabbits at August 16, 2012 9:23 AM
if you want to edit comments, you might want to be consistent and start with the neener,neener baiting comment.
Posted by: * at August 16, 2012 10:06 AM
I understand your point, but many of the comments put out by the bears on Socketsite last year were downright nasty. Several of them wrote in delight about foreclosures rising and people losing their homes and went as far as to say that they hoped it continued as "the market needed to correct" and they were "fools for buying at the peak". By contrast, I rarely heard anyone (especially the regulars) say anything about buy now or be priced out forever.
Like I said, it is too early to claim victory, but as a home owner - I personally take some satisfaction in seeing things improve. Without divulging my address or personal details, I can very safely say that my condo has risen in value since I purchased it in 2006, and the recent strength of the market (purchase and rentals)only helps. Yep, that feels pretty good.
Posted by: Lance at August 16, 2012 10:12 AM
I guess my perspective is that the market did, and perhaps still does, need to correct somewhat, even if that is not the best for my personal finances. I have no issue with those that were openly pulling for a correction, as I was among them from 2005-2010. Perhaps at times some were shrill about it, but really, I can put up with that so much more than happy talk from realtors.
Maybe it is just my outlook on life, but the 'bull' perspective has always made me feel less well-off and more like I'll spend my days on a hampster wheel if I want to live in this region. Even now, with significant equity, I take no great pleasure in rising prices, because ultimately it will limit the dynamism of our economy, and hey, I may want to buy another house someday too!
Posted by: rabbits at August 16, 2012 10:54 AM
Oh come on. There are like eight bears on here who utilize message board internet quotes from bulls, ffrom 4+ years ago. I mean LOL at bulls being more They want to troll, and that is all. Kudos to those who followed the market closely and actually did things. Multi-units offered some good opportunities in 09 and 10. But "buy now or be priced out forever" was something bears said, to flame. Not regular bullish posters.
Posted by: Anon1 at August 16, 2012 11:24 AM
The NY Times today has an op-ed from a Precita Park local. This market is indeed changing a lot of things in the City.
Posted by: lol at August 16, 2012 11:44 AM
"Without divulging my address or personal details, I can very safely say that my condo has risen in value since I purchased it in 2006, and the recent strength of the market (purchase and rentals)only helps. Yep, that feels pretty good."
this is highly doubtful. prices in SF proper are still down 20% from 2006.
we are at 2003 levels for the nicer places, and 2006 was near the peak.
I am on the market now and wouldn't dare pay more than anyone paid after 2003. I'm looking in marina/pac hts + mill valley and sausalito.
I'm finding pac hts/ marina around 2004/2005 prices, but in Mill valley, there are some places that are near their 2000 price. I was surprised to see how cheap Mill valley is compared to the city.
2002 to 2012 is the lsot decade for home priuces, and i think it will be 2015 or so, before SF gets back to 2006 prices.
Posted by: spencer at August 16, 2012 5:07 PM
@ Spencer -- You can doubt if you want to, but I have VERY, VERY good comps that show that prices where I live have indeed not dropped. This is why I am quick to say that that neither CS or Dataquick are necessarily indicative of what is happening on a micro-basis in SF. I will leave it at that.
Posted by: Lance at August 16, 2012 5:24 PM
The numbers for Pacific heights condo sales this year after the market picked up post March till now, versus 2006, are higher in both sales and dollars per square foot, actually. It looks like 93 sales at $836 per ft '12 vs 76 and $789 for '06. Let alone the other years Spenser said, 2002 - 2012 being offbase as ive shown. Then lumping all of 2004 in with 2005, 02 03 and most of 04 being years before the market took off, which displays a lack of understanding about when market shifts occurred and whatnot. Yet making BIG dismissive statements. So typical.
Posted by: Anon1 at August 16, 2012 9:24 PM
Marin is far from the job centers in Silicon Valley, which is why it is still not participating in the recovery. I personally dislike Mill Valley: I find the residents there mostly unfriendly and stuck-up, but each to their own.
Marin is comparatively cheaper than it has been since I moved here in the early 90s. If you like it there, it might be a good time to buy.
A few places like Dolores Heights are at all time highs, but most of The City is still under 2006 prices.
Posted by: NoeValleyJim at August 16, 2012 9:40 PM
"The numbers for Pacific heights condo sales this year after the market picked up post March till now, versus 2006, are higher in both sales and dollars per square foot, actually. It looks like 93 sales at $836 per ft '12 vs 76 and $789 for '06. "
I don't doubt it. There was a time on here (08-10 or so) when price per sq foot was a highly quoted index for areas, by both the editor and bears.
Not so much, or none now, so presumably the metrics are on the up.
Posted by: REpornaddict at August 16, 2012 11:58 PM
I too bought my Mission condo in 2010, and I think I've fared pretty well.
First of all, the property was a REO, and despite not being very old, was in horrible condition (superficially). The old owner pretty much let it go to crap before foreclosing, which seemed to turn many buyers off. Mine was the only offer at the time. New bedroom carpet, paint, a bathroom vanity countertop/sink, some new kitchen cabinets, a couple of new light fixtures, and some new appliances were all that was needed to freshen this place up. SF DBI was a pain in the ass to work with but it was all worth it in the end.
Secondly, the Mission is only getting better, with all the forward momentum currently taking place. And it's a great location for public transit.
Finally, I was one of the few buyers who took advantage of $18K in tax credits by timing my purchase so that I could qualify for both the federal and state first-time home buyer credit.
While I suffered from buyer's remorse for a good year+ (partially due to DBI headaches), I have been quite pleased with how my neighborhood has been doing with regards to real estate. I've been offered a possible relocation opportunity overseas sometime next year, which I tentatively accepted. As long as rental prices remain high, I'll be a very happy camper :-)
Posted by: joh at August 17, 2012 11:10 AM
2003 Pac Heights condos 4/1/ 03 - 8/16/03: 94 sales, $581 psqft. 4/1/02 - 8/16/02: 90 sales, $597 psqft. 4/1/4 - 8/16/4: 110 sales $635 psqft. 4/1/06- 816/06 : 76 sales $789 psqft. 4/1/12 - 8/16/12: 93 sales $836 psqft
Posted by: Anon1 at August 17, 2012 11:13 AM
Just as an aside-- for the people I know who are looking to buy right now or are in the process of buying, the rate of rent increases is a huge factor in their decision making.
The rate of change in rent increases is crazy and while the pace of increases seems unsustainable, I don't see anything on the horizon that would break the trend. With rent control, rapid increases in rent are a self-reinforcing trend. Fewer and fewer people "can afford to move" even if they signed a lease relatively recently (within the last couple years). Thus more and more supply is tied up. (And people start renting out rooms illegally or on airbnb.) Thus rent increases accelerate. And people are willing to spend an ever larger part of their monthly income/savings on buying a house as long as they think the market is not going to collapse on them.
Posted by: nanon at August 17, 2012 11:38 AM
Well played. As a bet, I did my purchase a few months after these tax credits expired. A few weeks after the expiry, the listing for the place I was following had been lowered by 30K. Then another 20K as the supply of potential buyers had temporarily vanished.
Posted by: lol at August 17, 2012 1:05 PM
y'all are funny. Remember the BIG bump in sales from mid 2009 to mid 2010? Driven by free money from the government if you bought a house? Bump disappeared and more as soon as the free money programs went away. Suckers who bought then faced bigger losses than the cash to buy they got.
Starting in late 2011 we had the same thing only it was absurdly cheap below 4% loans that drove it. Looks like that is now going away. Same thing. And SF saw nothing that every other part of the country didn't see both times. Live and learn (or learn . . . and forget).
Posted by: anon at August 17, 2012 2:13 PM
Yes there was an obvious bump following the early 2009 bottom. I purchased after that bump deflated. Prices have recovered higher than that bump now.
Posted by: lol at August 17, 2012 2:57 PM
nanon...we will at least have substantial new rental supply coming on the market soon. That should help marginally to mute rent increases. But the real driver of rent increases is job creation...the next time that drops rents will be quick to follow.
Posted by: curmudgeon at August 17, 2012 3:04 PM
I too noticed some price drops after the tax credits expired, which partly contributed to my buyer's remorse (added on to the DBI headaches). While I found the overall price drops to be annoying, few properties I would have actually been interested in actually dropped in value. But then again I had set very strict criteria (<$530K, low HOA dues, access to good public transit, lots of neighborood improvements planned by the city, lots of local businesses). A little over two years later, I feel that I got a good very deal on my place despite the temporary dip in prices. Also, I honestly doubt that the bank would have lowered the price on my place by $18K, since my place was already priced well below comparable properties in my area.
Posted by: joh at August 17, 2012 4:14 PM