May 15, 2013

San Francisco Home Sales Well Above Average In April

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

Following two months of declines, recorded home sales in San Francisco jumped 16.3% on a year-over-year basis last month (615 recorded sales in April 2013 versus 529 sales in 2012), up 23.7% as compared to the month prior and versus an average March to April drop of 0.7% over the past nine years, 15% above the average number of San Francisco homes that have traded hands in April since 2004 when sales volume hit 863.

While the inventory level of homes and condos for sale in San Francisco remains down around 20 percent on a year-over-year basis (i.e., there's a smaller pool of properties from which buyers can choose), listed inventory has increased 8 percent month-over-month (i.e., the supply of new listings has outpaced the increased sales demand).

San Francisco's median sales price was $815,000 in April, up 16.4% on a year-over-year basis, down 0.4% as compared to March in which the median was up 25.8% YOY.

For the greater Bay Area, recorded sales volume in April was down 0.6% on a year-over-year basis but up 4.9% from the month prior (7,621 recorded sales in April '13 versus 7,667 in April ’12 and 7,263 in March '13) with a recorded median sales price which was up 30.8% year-over-year, up 17.0% month-over-month.

Foreclosure resales and short sales made up about 24 percent of the Bay Area market in April, down from 30 percent in March and 43 percent a year ago.

At the extremes for the Bay Area in April, Marin recorded an 18.2% year-over-year increase in sales volume, a gain of 53 transactions with a median price that was 29.3% higher while San Mateo recorded a 14.9% drop in volume, a loss of 99 transactions with a median sales price which was up 32.0%.

As always, keep in mind that DataQuick reports recorded sales which not only includes activity in new developments, but contracts that were signed ("sold") months prior but are just now closing escrow (or being recorded) and any properties that were sold "off market."

Bay Area Median Sale Price Back Over $500,000; Sales Dip [DQNews]
San Francisco Home Sales See Seasonal Spike, Slip Year-Over-Year [SocketSite]

First Published: May 15, 2013 10:30 AM

Comments from "Plugged In" Readers

Wow. I think we will hit a new peak next month. I bet not many people saw that one coming so quickly.

Posted by: Lance at May 15, 2013 8:54 PM

Yup. Looks like late '11/ Jan. '12 was the time to buy. Not the bottom, since we all know that was early '09, but the last best time.

Posted by: sparky*b at May 16, 2013 7:49 AM

agree that late '11 was the bottom, in SF just as with the rest of the country. Plunging interest rates have been the biggest contributor to the rise since then, and the improving economy has helped. The median is distorted as there are far fewer dump-foreclosures in the sale mix, but clearly prices are up a lot on an apples-apples basis in the last 18 months. I think fence-sitters have already missed the real buying opportunity. May still be a little near-term upside, but ironically as the economy improves interest rates are likely to tick up, and put downward pressure on home prices.

Still, SF housing has been creamed by the stock market over the last couple years, so fence-sitters who kept their money in the markets certainly have nothing to cry about.

Posted by: anon at May 16, 2013 8:11 AM

The bottom is an elusive term that shows the average point in time on a curve. The "bottom" was happening at all points from late 09 and through 11 on a property by property basis. There were some really great "deals" had in that time period. And I'm sure there is someone that bought in late '11 who overpaid. The market is really out of control. I suspect there is a softening at the very highest end but will be curious to see if the buyers for those properties continue to emerge.

Posted by: eddy at May 16, 2013 9:03 AM

"SF housing has been creamed by the stock market over the last couple years, so fence-sitters who kept their money in the markets certainly have nothing to cry about."

Yeah, but leveraged investing, when it works, can be pretty appealing.

Just as a back of the envelope, it's a lot better to earn 30% on $1 million of borrowed money than 100% on $100k of personal cash. Of course the real numbers are more complicated then this but it serves as an informative expample.

Posted by: anon at May 16, 2013 9:11 AM

I'm still skeptical that the economy is going to continue to improve. If I could, I'd sell now, but I'm still underwater. I'd need my place to go another 30% before I could get all my equity back after transaction costs, don't think that is going to be happening before we see another recession (milder one this time) and housing prices drop again.

Posted by: Rillion at May 16, 2013 9:15 AM

I think our current recovery is somewhat similar to the mid-90s. Growth is still a bit tepid but our deficit is shrinking tremendously. Unemployment is still a big issue and at this point unemployment insurance and other crisis-mitigation expenditures ARE most of the deficit.

This recovery would happen stronger and faster if the idiotic Austerians hadn't focused on the infamous 90% debt ceiling that proved to be a pure Excel fabrication.

Now that Keynesians are quietly dancing their victory lap, some pretty amazing things could perfectly happen.

Only the Eurocrats today still think that shrinking an economy leads to growth. The first to really break ranks with the Auterians are the Japanese. Everyone is looking at them. I think they have a good chance of succeeding, and the developed world will follow.

The consequence for RE? Sustained growth for a few years nationally. SF has gone a bit ahead of itself though. The economy needs to play catch up to justify recent price increases.

Posted by: lol at May 16, 2013 9:42 AM

@ Rillion:

If you don't mind me asking, what district are you in and when did you buy? We bought our place in district 5 in late 2006. This was obviously near the peak, but a few neighbors (with similar purchase dates) recently sold their places for solid gains. My refinance that I did back in January, got appraised at 14% over my purchase price, and it was based on very solid comps. I'm frankly surprised that you are that underwater still.

Posted by: Lance at May 16, 2013 9:59 AM

I don't know about that last line. SF has gained a lot of jobs and much more than created housing. So while it is ahead of the national curve, it is ahead for good reason and not ahead of itself. Also, mortgage rates are a nationally set so until the rest of the nation is doing well they will stay low. That won't be for a long while yet. SF real estate will probably plateau for a while since it has gone up so fast (in some areas) but it won't go down because of supply and demand.

Posted by: sparky*b at May 16, 2013 9:59 AM

sparky*b,

I don't disagree. I think a plateau is the most likely scenario if prices don't bubble up much further.

A very important element in SF's current situation is the end of unpredictability. If your job is in demand and you are personally in a good financial situation, you can take on more risk. If you are cash-rich to boot, then paying a few 100Ks extra doesn't seem foolish like it was in 2009-2011. Good times.

Posted by: lol at May 16, 2013 10:16 AM

I'm in district 6. In the part that is still the Western Addition and not one of the areas that has been carved out of the Western Addition and given a new name. I have a 2/1 and a 3/2 just sold in Febuary for 20% less than I paid for my smaller unit.

These are not BMR or income-restricted units but they are subject to the MOH substituting in a first time buyer if they have a qualified candidate that can match whatever offer you received on the open market when selling the place. That as well as the CC&R's require that they must be owner-occupied, so it eliminates all the investors that are looking to buy a place to turn it into an income generating property.

Posted by: Rillion at May 16, 2013 2:45 PM

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