CATEGORY ARCHIVE: Trends
May 12, 2008
SocketSite's San Francisco Listed Housing Inventory Update: 5/12/08
Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 3% over the past two weeks (37% higher on a year-over-year basis) while listed sales volume appears to have slightly slipped. Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor do they include multi-family listings (unless the units are individually listed).
∙ SocketSite's San Francisco Listed Housing Inventory Update: 4/28/08 [SocketSite]
Posted by socketadmin at 6:30 AM | Permalink | Comments (28) | (email story)
May 9, 2008
Wells Fargo Tightens Local Lending Standards For HELOCs
Three months ago we alerted you to a trend in lending to tighten up on Home Equity Lines of Credit (HELOCs), so please don’t let us hear that any plugged-in readers have been caught unprepared or by surprise.
The latest local news: Wells Fargo has “lowered the maximum loan-to-value to 75 percent from 80 percent on mortgages involving an equity line of credit for houses in Marin, San Francisco and San Mateo counties.”
∙ When Hell HELOCs Freeze Over... [SocketSite]
∙ Wells tightens standards for home equity lines [Business Times]
Posted by socketadmin at 8:15 AM | Permalink | Comments (20) | (email story)
May 5, 2008
Mortgage Rate/Spread Update: Are You Feeling Stimulated Yet?
According to Julian Hebron at RPM, local 30-year jumbo-conforming mortgages are currently being offered for around 6.625%. That’s a 0.25% (25 bps) discount to jumbo rates (6.875%) but a 0.625% (62.5 bps) premium over conforming (6.0%).
∙ If Lowering Rates Isn’t Working, Perhaps Increasing Limits Will [SocketSite]
Posted by socketadmin at 2:37 PM | Permalink | Comments (12) | (email story)
April 29, 2008
Perspective On California Foreclosures And The Current Housing Cycle
Get over the source of the graph (Bubble Markets Inventory Tracking) and the fact that the epicenter of foreclosure activity is centered down south (at least currently), it’s still relevant perspective regarding this housing cycle (and at some level will most likely matter to you).
And while foreclosures did only account for 5% of all resales in San Francisco County (not MSA) last quarter versus 33% Statewide, do keep in mind that’s two points higher than what was recorded Statewide in the first quarter of 2007 (3%).
∙ CA Foreclosures 2008 Q1 [Bubble Markets Inventory Tracking]
∙ California home foreclosures hit a record [Los Angeles Times]
∙ Yes, The Greater California Housing Market Does Matter To You [SocketSite]
Posted by socketadmin at 1:00 PM | Permalink | Comments (19) | (email story)
February S&P/Case-Shiller: San Francisco MSA Decline Accelerates
According to the February 2008 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 5.0% from January '08 to February ’08 and are down 17.2% year-over-year. For the broader 10-City composite (CSXR), year-over-year price growth is down 13.6% (having fallen 2.8% from January).
For the month of February, markets in the West were the biggest decliners. San Francisco [-5.0%], Las Vegas [-4.8%], and Los Angeles [-4.3%] were the worst performers. Each had a negative return in excess of 4%. Charlotte remains the only market that has a positive return over the past 12 months, but it too has seen negative returns in each of the last six months and is in the midst of growth deceleration.
Prices fell across all three price tiers for the San Francisco MSA with the rate of decline accelerating across the board.
The bottom third (under $513,218 at the time of acquisition) fell 5.9% from January to February (down 32.0% YOY); the middle third fell 5.9% from January to February (down 20.6% YOY); and the top third (over $756,420 at the time of acquisition) fell 2.5% from January to February (down 6.0% YOY).
And according to the Index, home values for the bottom third of the market in the San Francisco MSA have returned to December 2003 levels, the middle third to May 2004 levels, and the top third to March 2005 levels.
The standard SocketSite S&P/Case-Shiller footnote: The HPI only tracks single-family homes (not condominiums which represent half the transactions in San Francisco), is imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best), and includes San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA).
UPDATE: Back by popular demand, the San Francisco price tiers plotted logarithmically:
∙ Steep Declines in Home Prices Continued in February 2008 [Standard & Poor’s]
∙ January S&P/Case-Shiller: San Francisco MSA Continues Decline [SocketSite]
Posted by socketadmin at 6:16 AM | Permalink | Comments (113) | (email story)
April 28, 2008
SocketSite's San Francisco Listed Housing Inventory Update: 4/28/08
Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 5% over the past two weeks and is currently running 36% higher on a year-over-year basis. Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor do they include multi-family listings (unless the units are individually listed).
And once again, while recorded sales activity was off by a little over 20% last month (on a year-over-year basis), listed sales activity was off by over 30%.
∙ SocketSite's San Francisco Listed Housing Inventory Update: 4/14/08 [SocketSite]
∙ San Francisco Recorded Sales Activity In March: Down 20.6% YOY [SocketSite]
Posted by socketadmin at 8:00 AM | Permalink | Comments (53) | (email story)
April 24, 2008
U.S. New-Home Sales Slide Plunge To Near Seventeen Year Low
“Purchases of new homes in the U.S. plunged more than forecast in March to the lowest level in almost 17 years as stricter loan rules and falling prices caused buyers to hold off. Sales dropped 8.5 percent to an annual pace of 526,000, the fewest since October 1991, from a 575,000 rate the prior month....”
∙ New-Home Sales in the U.S. Plunge More Than Forecast [Bloomberg]
∙ U.S. Existing-Home Sales Slide (This Time Despite The Seasonality) [SocketSite]
Posted by socketadmin at 10:00 AM | Permalink | Comments (44) | (email story)
April 22, 2008
AIG United Guaranty Cuts Condominium Coverage In…San Francisco
As both tipsters and readers alike have noted, as of next month a major private mortgage insurer will no longer write coverage for condominiums in “declining” markets. And as far as AIG United Guaranty is concerned, that includes San Francisco. Yes, proper.
[S]tarting May 1, AIG United Guaranty…no longer will write coverage on condominiums in hundreds of ZIP codes across the country that it designates as having "declining" market conditions. The ban is irrespective of applicants' credit scores, assets or equity stakes. Even in the healthiest real estate markets, United Guaranty will require buyers to put at least a 10 percent down payment into the deal, and will reject applications on units in condo projects where more than 30 percent of the owners are investors.
Of course AIG is but one insurer. And over the past seven years or so an increasing number of condo buyers turned to piggyback mortgages to avoid PMI altogether. But with ever tightening lending standards, and increasing rates for second mortgages, we just might see a resurgence in use throughout San Francisco. Then again, if other insurers follow suit, perhaps not.
∙ Condo-loan restrictions tightening [Baltimore Sun]
∙ AIG United Guaranty’s Declining Markets List (pdf) [ugcorp.com]
Posted by socketadmin at 11:26 AM | Permalink | Comments (37) | (email story)
U.S. Existing-Home Sales Slide (This Time Despite The Seasonality)
The pace of U.S. existing-home sales fell in March to a seasonally adjusted rate of 4.93 million units. That’s down 2.0 percent from the month prior and down 19.3% from the pace of a year prior. Median sales price is down 7.7% (YOY).
Huh. So much for that February “recovery.” And perhaps that wacky housing market is somewhat seasonal after all. Who knew.
∙ Existing-Home Sales Slip in March [NAR]
∙ The Good And The Bad (But Not Necessarily The Ugly) [SocketSite]
Posted by socketadmin at 8:00 AM | Permalink | Comments (27) | (email story)
April 17, 2008
San Francisco Recorded Sales Activity In March: Down 20.6% YOY
According to DataQuick, home sales volume in San Francisco dropped 20.6% on a year-over-year basis last month (508 recorded sales in March ’08 versus 640 sales in March ‘07). And while sales volume increased 17.9% compared to the month prior (think seasonaility), in 2004 sales volume in San Francisco jumped 39.4% from February to March, in 2005 it jumped 38.9%, in 2006 it jumped 47.1%, and in 2007 it jumped 70.7%.
As we pointed out last month, however, it’s important to understand 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). Early reports of sales activity for listed properties in San Francisco would suggest a closer to 30% year-over-year decline for existing property sales.
The median sales price in March was $755,000, up a negligible 0.3% compared to March ’07 ($752,800) and up 2.6% compared to the month prior. That being said, we continue to see mix playing a significant role in supporting the median sales price in San Francisco.
For the greater Bay Area, sales volume in March was down 41.1% on a year-over-year basis but increased 22.8% from the month prior (4,898 recorded sales in March '08 versus 8,317 in March ’07 and 3,989 this past February). And the recorded median sales price fell 16.1% on a year-over-year basis (down 2.2% compared to the month prior).
At the extremes, Marin recorded a 48.8% year-over-year reduction in sales volume (a loss of 141 transactions) and a 4.4% drop in median sales price; Alameda recorded a 47.2% year-over-year reduction in sales volume (a loss of 869 transactions) and an 18.5% drop in median sales price; Santa Clara recorded a 46.2% reduction in sales volume (a loss of 947 transactions) and a 9.2% drop in median sales price; and Contra Costa recorded a 32.6% reduction in sales volume (a loss of 470 transactions) and a 26.9% drop in median sales price.
∙ Bay Area home sales remain at two-decade low [DataQuick]
∙ San Francisco Recorded Sales Activity In February: Up (14.9% YOY) [SocketSite]
∙ SocketSite's San Francisco Listed Housing Inventory Update: 4/14/08 [SocketSite]
Posted by socketadmin at 11:24 AM | Permalink | Comments (78) | (email story)
April 15, 2008
Foreclosure Filings Continue To Rise Across The Nation And California
According to RealtyTrac, foreclosure filings in the U.S. were up “nearly 57 percent” on a year-over-year basis in March. At the same time, bank repossessions were up “nearly 129 percent, but auction notices were up only 32 percent, indicating that more defaulting homeowners are simply walking away and deeding their properties back to the foreclosing lender.”
Foreclosure activity in California more than doubled over the past year (up 21% from February alone). And we led the nation in total number of filings (64,711 affected properties) for the 15th consecutive month. At one in every 204 households, the foreclosure filing rate in California is currently second only to Nevada (one in every 139).
∙ Foreclosure Activity Increases 5 Percent In March [RealtyTrac]
∙ JustQuotes: Fannie Raises A Red Flag With Regard To Foreclosures? [SocketSite]
Posted by socketadmin at 10:05 AM | Permalink | Comments (6) | (email story)
Islands Of Immunity Or Simply The Last To Catch The Contagion?
We don’t necessarily disagree with the overall sentiment: a growing number of recent Bay Area homebuyers are accumulating negative equity on their “investment.” But using Zillow for an accurate analysis? That’s a different matter altogether.
That being said, keep in mind that the Chronicle’s graphic represents the percentage of homes purchased in 2006 (versus the percentage of all homes) which are considered to be worth less today (once again, according to Zillow).
And the real question for San Francisco becomes, how - and how quickly - will those colors bleed? And of course, how long before they fade?
∙ Homeowners get that drowning feeling [SFGate]
Posted by socketadmin at 7:43 AM | Permalink | Comments (44) | (email story)
April 14, 2008
Another Admittedly Incomplete Update For A Few Featured Properties
While 1230 Sacramento, 73 Miguel, 545 Sanchez, and 1944-48 Buchanan all entered into (or firmed up) escrow over the past couple of days (last listed at $7,500,000, $2,875,000, $1,795,000 and $1,695,000 respectively), and 2311 Scott St #1 quickly closed escrow last week for $2,170,000 ($175,000 over asking), today the list price on 1150 Folsom #1 was reduced another $30,000.
At $795,000, 1150 Folsom #1 is now listed for $34,000 less than its sale price in October of 2005. Nope, no mix skewing that San Francisco Median Sales Price in this market.
∙ We’re Big Fans Of This Beaux-Arts Beauty (1230 Sacramento) [SocketSite]
∙ The Backside, View, And Rather Big "Right Pricing" Up On Miguel [SocketSite]
∙ Details, Details, Details On An 1880’s San Francisco Stick Victorian [SocketSite]
∙ A “Bitter” Renter Reports: Repossessed In Lower Pacific Heights [SocketSite]
∙ Through And Through And Throughout On A Sunny Saturday Morning [SocketSite]
∙ A Folsom Rausch Lofts Short Sale (Assuming 3.3% Appreciation) [SocketSite]
∙ An Admittedly Incomplete Update For A Few Featured Properties [SocketSite]
Posted by socketadmin at 5:44 PM | Permalink | Comments (21) | (email story)
SocketSite's San Francisco Listed Housing Inventory Update: 4/14/08
Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 3% over the past two weeks and is currently running 37% higher on a year-over-year basis. Our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor do they include multi-family listings (unless the units are individually listed).
With regard to any months of inventory calculations, keep in mind that while recorded sales activity in San Francisco was up almost 15% on a year-over-year basis in February according to DataQuick, this activity includes newly recorded closings in developments such as Infinity and One Rincon Hill (inventories for which are not included above and contracts for which were signed up to two years prior).
According to the San Francisco Association of Realtors, sales of listed single-family homes, condos, and TICs in San Francisco were down 16% on a year-over-year basis in February with condos/TICs off by 27% and single-family homes off by a relatively modest 6%. And according to a plugged-in reader, early results for March indicate listed sales volume in San Francisco was down over 30% on a year-over-year basis with months of inventory running at well over two-times the level of twelve months prior.
∙ SocketSite's San Francisco Listed Housing Inventory Update: 3/31/08 [SocketSite]
∙ San Francisco Recorded Sales Activity In February: Up (14.9% YOY) [SocketSite]
Posted by socketadmin at 7:45 AM | Permalink | Comments (47) | (email story)
April 11, 2008
PMI’s Market Risk Index And Real Estate Trends Report: Spring 2008
According to the latest PMI Market Risk Index, The San Francisco-San Mateo-Redwood City MSAD ended the fourth quarter of 2007 with a 30.2% likelihood of house price declines over the next two years. And while that’s up from 24.6% in the third quarter of 2007, that’s also down from 39.5% at the beginning of 2005.
The likelihood of decline for a few other nearby areas: Sacramento-Arden-Arcade-Roseville (77.7%), Oakland-Fremont-Hayward (63.8%), San Jose-Sunnyvale-Santa Clara (51.1%).
And for perspective, the Miami-Miami Beach-Kendall MSAD weighs in with a 61% likelihood of decline (roughly twice that of San Francisco, but less than Oakland), while the New York-White Plains-Wayne MSAD weighs in at 7%.
UPDATE: As a number of plugged-in readers have noted, the PMI Market Risk Index is tied to the OFHEO house price index which “excludes jumbo loans and the large portion of subprime and Alt-A loans that Fannie Mae and Freddie Mac don’t participate in.”
· Economic And Real Estate Trends: Spring 2008 (pdf) [PMI]
· Economic And Real Estate Trends: Spring 2005 [SocketSite]
Posted by socketadmin at 8:09 AM | Permalink | Comments (27) | (email story)
April 10, 2008
It's A Good Thing San Francisco's Fortunes Aren't Tied To The Valley
"Housing prices in Silicon Valley remain defiantly high. New BMWs and Saabs cruise Highway 101. But for the first time there are signs that the current economic downturn is taking its toll on the country’s cradle of technology and innovation.
Job growth has slowed, start-up companies are hiring and spending more cautiously, and early-stage investors who nurture the start-ups with money and expertise are growing more frugal."
∙ Economy Has Become a Drag on Silicon Valley [New York Times]
∙ And What Happened Seven And One Half Years Ago In San Francisco? [SocketSite]
Posted by socketadmin at 11:13 AM | Permalink | Comments (41) | (email story)
April 8, 2008
JustQuotes: U.S. Pending Home Resale Index Hits Seven Year Low
“The number of Americans signing contracts to buy previously owned homes declined more than forecast in February, indicating no sign of a bottom in the U.S. real-estate recession that is entering its third year.
The National Association of Realtors' index of signed purchase agreements decreased 1.9 percent to 84.6, the lowest reading since records began in 2001, the group said today. The drop follows a revised 0.3 percent increase in January.”
“Pending resales dropped in three of four regions, led by a 9.8 percent decline in the West. Purchases fell 5.5 percent in the South and 3.7 percent in the Midwest. Pending sales increased 3.2 percent in the Northeast.”
∙ U.S. Economy: Pending Home Resales Fell More Than Forecast [Bloomberg]
Posted by socketadmin at 8:06 AM | Permalink | Comments (48) | (email story)
April 7, 2008
Forget About Foreshadowing, We Served Up the Forewarning
Two months ago we let you know to be prepared. Others are now learning the harder way.
[Brent Meyers] owns a substantial investment portfolio and a million-dollar house in Moraga. He pays his bills on time and has no credit card debt. His credit score, he says, is around 800, a rating more or less in the stratosphere. But in mid-March, Bank of America cut off his home equity credit line of a little more than $180,000, citing a decline in the value of his property.
∙ When Hell HELOCs Freeze Over... [SocketSite]
∙ Lenders retreat as housing market plummets [SFGate]
Posted by socketadmin at 8:30 AM | Permalink | Comments (18) | (email story)
April 4, 2008
Silicon Valley Hiring Slowdown: Meaningful Or Meaningless?
"Hiring in Silicon Valley was strong during much of 2007 but lost momentum toward the end of the year, a slight slowdown that has continued into 2008, local experts on technology employment say.
"Last year was great," said Patti Wilson, principal of CareerCompany.com, a Silicon Valley job consulting firm. "Companies were hiring and they were competing with each other for top technology talent."
This year though, hiring has dropped off and some companies are laying off workers, she noted.”
∙ Tech companies still hiring, but pace slowing [SFGate]
Posted by socketadmin at 8:13 AM | Permalink | Comments (10) | (email story)
March 31, 2008
SocketSite's San Francisco Listed Housing Inventory Update: 3/31/08
The inventory of Active listed single-family homes, condos, and TICs in San Francisco increased slightly (1%) over the past two weeks and is currently running 43% higher on a year-over-year basis. And the percentage of Active listings that have been reduced at least once has increased from 21% to 29% (195 versus 384) on a year-over-year basis as well.
Keep in mind that our listed inventory counts do not include listings in any stage of contract (even those which are simply contingent) nor do they include multi-family listings (unless the units are individually listed). And once again, reports of decreasing inventories in San Francisco proper are either incorrect or possibly refer to a decrease from the levels of last October which would not reflect the market’s seasonality.
∙ SocketSite's San Francisco Listed Housing Inventory Update: 3/17/08 [SocketSite]
Posted by socketadmin at 9:15 AM | Permalink | Comments (49) | (email story)
March 27, 2008
Are We Detached From More Than Simply The Fundamentals?
An interesting chart of California MSA home price appreciation as measured by the OFHEO*, put together by the Public Policy Institute of California (pdf), and by way of a plugged-in tipster. And an important observation which shouldn’t catch any plugged-in readers by surprise:
While California’s previous housing crisis (southern California in the early and mid‐1990s) was part of a broader economic slowdown, the relationship between housing and economic conditions today is less clear‐cut. In 2007, employment in Merced and Stockton grew more than 2%, despite crashing housing prices, whereas employment grew only 0.6% in California overall and even fell in Los Angeles, Orange County, Ventura County, and Riverside-San Bernardino – where home prices are holding up better than in the Central Valley.
*Note: For those who are unfamiliar, the OFHEO Home Price Index (HPI) is based on data from repeat single-family home sales, or refinancings, that involve conforming mortgages. Data from transactions involving either condominiums or non-conforming loans (two major components of the San Francisco market) are excluded from the Index.
∙ The California Economy: Crisis In The Housing Market (pdf) [ppic.org]
∙ OFHEO: U.S. House Prices Don't Fall (But Do In CA And The SF MSA) [SocketSite]
Posted by socketadmin at 9:38 AM | Permalink | Comments (55) | (email story)
March 26, 2008
Going Once, Going Twice...“Sold” For $700,000 (41 Federal #42)
With around sixty people in the room, but only a few active bidders, the high bid at today’s auction for 41 Federal #42 was $700,000 (and apparently it wasn’t “outbid”). As a plugged-in ex SF-er correctly surmised, however, the bank now has seven days to decide whether or not to accept the bid (which we’d be surprised if they didn’t).
A recorded sale at $700,000 would represent a drop of $180,000 (20.5%) from the original purchase price in December of 2006, and would also establish a new building “comp” at $760 per square foot.
That being said, keep in mind that the unit looked like it had never been occupied, and the reported sale price of $880,000 in 2006 was $5,000 over the original list price of $875,000 which had subsequently been reduced down to $825,000 prior to going into contract (i.e., something’s not quite right with respect to the original sale).
And tip of the hat to ex SF-er ("I think this sells for $700k+ or not at all"), Lance ("$685K"), and Nicole ("$679,000") who were all on record with their pre-auction predictions and within 3% of the highest bid (as well as to FSBO for filling in a few holes with respect to #42's official MLS history).
∙ Going Once, Going Twice (For Real?*) At Shore|Line: 41 Federal #42 [SocketSite]
Posted by socketadmin at 5:53 PM | Permalink | Comments (39) | (email story)
No Real Signs Of Recovery (Much Less Of Simply Stopping Its Slide)
While U.S. existing home sales were “up” in January (but once again, down 23.8% on a year-over-year basis and with prices down 8.2% nationally and 13.4% in the West), the pace of U.S. new-home sales continued its slide in February, down 1.8% to its lowest level since February 1995 and with a median sales price that's down 2.7% (year-over-year).
In short, the national housing market has yet to show any real signs of recovery much less of simply stopping its slide (see the light blue line).
∙ The Good And The Bad (But Not Necessarily The Ugly) [SocketSite]
∙ New-Home Sales in U.S. Fall to Lowest in 13 Years [Bloomberg]
∙ January S&P/Case-Shiller: San Francisco MSA Continues Decline [SocketSite]
Posted by socketadmin at 7:39 AM | Permalink | Comments (7) | (email story)
March 25, 2008
January S&P/Case-Shiller: San Francisco MSA Continues Decline
According to the January 2008 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 2.9% from December ’07 to January '08 and are down 13.2% year-over-year. For the broader 10-City composite (CSXR), year-over-year price growth is down 11.4% (having fallen 2.3% from December).
Las Vegas and Miami share the dubious title of the weakest markets in January, reporting double-digit annual declines of 19.3%, followed by Phoenix at -18.2%. In January, Washington and Minneapolis slipped into negative double-digit territory with annual returns of -10.9% and -10.0%, respectively.
Prices fell across all three price tiers for the San Francisco MSA with the rate of decline easing slightly for both the lower and upper third of homes.
The bottom third (under $545,294 at the time of acquisition) fell 4.4% from December to January (down 28.8% YOY); the middle third fell 4.2% from December to January (down 15.9% YOY); and the top third (over $794,192 at the time of acquisition) fell 1.7% from December to January (down 3.5% YOY).
And according to the Index, home values for the bottom third of the market in the San Francisco MSA have returned to March 2004 levels, the middle third to August 2004 levels, and the top third to April 2005 levels.
The standard SocketSite S&P/Case-Shiller footnote: The HPI only tracks single-family homes (not condominiums which represent half the transactions in San Francisco), is imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best), and includes San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA).
∙ Record Declines in Home Prices Continued in 2008 [Standard&Poor's]
∙ December S&P/Case-Shiller: San Francisco MSA Hits Double-Digit Dip [SocketSite]
Posted by socketadmin at 7:00 AM | Permalink | Comments (222) | (email story)
March 24, 2008
The Good And The Bad (But Not Necessarily The Ugly)
The good news on Wall Street: JPMorgan has raised its bid for Bear Stearns to about $10 per share. The cumulative bad news on Wall Street: 34,000 jobs have been lost over the past nine months.
The good news from the National Association of Realtors: The pace of U.S. existing home sales unexpectedly rose 2.9% in February (but remains 23.8 percent off the pace of 2007). The bad news from the National Association of Realtors: The median existing-home price was 8.2% lower on a year-over-year basis (and 13.4% lower in the West).
And the mixed news (depending upon your perspective and portfolio) and reaction to both bits on The Street: Treasuries fell and yields are up (which should increase rates).
∙ JPMorgan Raises Bear Stearns Bid to Woo Shareholders [Bloomberg]
∙ Wall Street Firms Cut 34,000 Jobs, Most Since 2001 Dot-Com Bust [Bloomberg]
∙ Existing Home Sales Rise In February [NAR]
∙ Treasuries Fall as Stocks, Mortgage Purchase Ease Haven Appeal [Bloomberg]
Posted by socketadmin at 9:02 AM | Permalink | Comments (18) | (email story)
March 17, 2008
SocketSite's San Francisco Listed Housing Inventory Update: 3/17/08
The inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 9% over the past two weeks and is now running 49% higher on a year-over-year basis. Reports of decreasing inventories in San Francisco are either incorrect or possibly refer to a decrease from the levels of last October which would not reflect the market’s seasonality.
Keep in mind that our listed inventory counts do not include listings in any stage of contract (even those which are simply contingent) nor do they include multi-family listings (unless the units are individually listed).
And combined with early reports that listed sales volume in San Francisco was off by ~20% on a year-over-year basis last month, months of listed inventory has now crossed over the four month mark (which is relatively high for San Francisco and close to 2x on a year-over-year basis).
∙ SocketSite's San Francisco Listed Housing Inventory Update: 3/03/08 [SocketSite]
Posted by socketadmin at 3:15 AM | Permalink | Comments (51) | (email story)
March 14, 2008
San Francisco Recorded Sales Activity In February: Up (14.9% YOY)
According to DataQuick, home sales volume in San Francisco jumped 14.9% on a year-over-year basis last month (431 recorded sales in February ’08 versus 375 sales in February ‘07) and jumped 47.1% compared to the month prior (293 recorded sales in January ‘08). And while a general increase in reported sales activity in San Francisco shouldn’t catch any plugged-in readers by surprise (we noted the upward trend two weeks ago, and of course seasonality is in effect with respect to month-over-month gains), the magnitude of the increase is sure to raise an eyebrow or two (as it should).
Keep in mind, however, 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). The sales reports from the San Francisco Association of Realtors will likely paint a very different picture in terms of February market activity (down ~22% according to one plugged-in reader). And it does raise the question of whether or not new developments are "stealing" transactions from the existing condo market.
The median sales price in February was $736,000, down 2.8% compared to February ’07 ($757,500) and down 1.1% compared to the month prior. That being said, we continue to see mix playing a significant role in supporting the median sales price in San Francisco.
For the greater Bay Area, sales volume in February was down 36.7% on a year-over-year basis but increased 11.2% from the month prior (3,989 recorded sales in February '08 versus 6,305 in February ’07 and 3,586 this past January). The recorded median sales price fell 11.6% on a year-over-year basis and was down 0.4% compared to the month prior.
At the extreme, Alameda recorded a 44.5% year-over-year reduction in sales volume (a loss of 603 transactions) and a 16.8% drop in median sales price. And outside of San Francisco no Bay Area county reported a drop of less than 35% in sales volume, and not a single Bay Area county reported a positive change in Median Sales Price (with both Sonoma and Solano reporting drops of over 20%).
∙ Bay Area home sales remain at two-decade low [DataQuick]
∙ San Francisco Sales Activity In January: Down Again (-27.1% YOY) [SocketSite]
∙ SocketSite's San Francisco Listed Housing Inventory Update: 3/03/08 [SocketSite]
∙ Infinity And One Rincon Hill: Closings By The Numbers To Date (2/29) [SocketSite]
Posted by socketadmin at 2:30 PM | Permalink | Comments (68) | (email story)
March 13, 2008
JustQuotes: Mortgage Bankers Report On Mortgage Fraud (It’s Up)
“Rising real estate values over the past few years threatened to price new homebuyers out of the market and led some to attempt purchases before they were creditworthy. The higher valuations also led some individual real estate investors to speculate and stretch the truth on applications for multiple properties, especially in active markets, such as Florida and Nevada.
They were aided in this tactic by industry professionals who hoped that any future loan problems would be covered by a profitable sale of the collateral. Credit standards were loosened. More importantly for fraud, documentation requirements were also reduced.
There has been a long history of fraud and sour consequences associated with low/reduced/no documentation loans. As an example, loan servicing staffs are discovering a substantial percentage of prime and non-conforming delinquencies are for loans where the applicants stated their intent to occupy, but were in fact, rental properties at the outset.”
∙ Tenth Periodic Mortgage Fraud Case Report to the MBA (pdf) [mari-inc.com]
Posted by socketadmin at 3:10 PM | Permalink | Comments (4) | (email story)
Another Apple Speaks On The Edge Of Nob Hill (1635 California #33)
Four months ago we pointed it out as “another apples to apples comp in the making." And while 1635 California is on a busy street, and we’ll be the first to admit that the layouts aren’t exactly spectacular (which we actually noted two years ago), nothing about the location nor the building has recently changed.
That being said, the 36 condos at 1635 California Street first hit the market two years ago and based on tax records it appears as though unit #33 sold for right around $780,000. Twenty months later 1635 California #33 hit the resale market for $795,000 (a sale at which would have represented 1% annual market appreciation) but was subsequently reduced to $749,000. And just last week, the sale of condo #33 closed escrow with a reported contract price of $740,000.
A sale at $740,000 represents annual market depreciation of right around 3% over the past two years which might surprise some. But it's probably not going to surprise a plugged-in “PotreroResident” who four months ago commented, “Based on my analysis of this building, this unit is most likely worth about $740-750k, at best.” On the record and on the money (at least for today).
∙ Another Apples To Apples Comp In The Making (1635 California #33) [SocketSite]
∙ 1635 California Street [SocketSite]
Posted by socketadmin at 9:17 AM | Permalink | Comments (14) | (email story)
JustQuotes: It's A Good Thing We Don’t Have Any ARMs Around Here…
“U.S. home foreclosure filings jumped 60 percent and bank seizures more than doubled in February as rates on adjustable mortgages rose and property owners were unable to sell or refinance amid falling prices….About $460 billion of adjustable-rate mortgages are scheduled to reset this year and another $420 billion will rise in 2011, according to New York-based analysts at Citigroup Inc.”
∙ U.S. Home Defaults, Foreclosures Rise 60% in February [Bloomberg]
∙ An ARM (And Quite Possibly A Leg) [SocketSite 6/05]
Posted by socketadmin at 8:16 AM | Permalink | Comments (24) | (email story)
March 12, 2008
Is It Simply The New New Strategy, Or Is It Actually A(nother) Sign?
It’s a plugged-in reader that points out another apple ripening on the Noe Valley housing tree. Purchased for $965,000 on 8/4/06, 1024 Sanchez is back on the market today with a list price of $949,000.
Is listing below the last sale price simply the newest pricing strategy (“made you look!”), or is it actually another sign? And once again, it's time to go on record with your pre-closing predictions.
UPDATE: We’ll add that it had been listed for $949,000 in 2006 as well.
∙ Listing: 1024 Sanchez (2/2) - $949,000 [MLS]
∙ Another Single-Family Apple On The Noe Valley Tree: 480 Duncan [SocketSite]
Posted by socketadmin at 8:52 AM | Permalink | Comments (61) | (email story)
March 10, 2008
And What Happened Seven And One Half Years Ago In San Francisco?
As we’ve often pointed out, sales volumes and home price appreciation have been falling in San Francisco over the past couple of years despite the fact that that by most accounts our local economy remains strong, employment and wages are up, and the cost of borrowing remains near historic lows. And this has been in marked contrast to our last real estate decline (2001-2002) which directly coincided with a local economic meltdown (a.k.a. The Internet Bubble).
And now, both the national economy and Bay Area Business Confidence Index are faltering and Federal rate cuts are failing to spark sales (but are doing a great job of weakening the dollar). In fact, The Bay Area Business Confidence Index “tumbled to its lowest level in its 7 1/2-year history, based on results of a survey conducted in late January and early February.”
Let’s see, 7 1/2-years ago would be right around...
∙ Record low Bay Area business confidence [SFGate]
∙ U.S. Economy: Payrolls Unexpectedly Decline for Second Month [Bloomberg]
∙ Bay Area “Notices Of Default” Heading North? (So To Speak) [SocketSite]
∙ February S&P/Case-Shiller Index Decline Continues For SF MSA [SocketSite 4/07]
Posted by socketadmin at 9:55 AM | Permalink | Comments (14) | (email story)
March 6, 2008
JustQuotes: Might It Draw Demand From Way Over In San Francisco?
"The developer of the recently opened Eight Orchids condominium mid-rise in Oakland hopes to auction off nearly a third of the units, with some starting bids $300,000 below prior asking prices, as builders struggle to unload new properties in the current housing climate."
"The auction of 41 units is scheduled for March 30....The minimum bid for one-bedrooms is $245,000, down from as high as $520,888; two-bedrooms will start at $325,000, down from as high as $630,888; and three-bedrooms will begin at $475,000, discounted from as much as $805,888. There is no "secret reserve," meaning any unit that receives at least the minimum offer will go to the bidder."
∙ Prices cut for Oakland condo auction [SFGate]
∙ 8 Orchids (Oakland) [8-orchids.com]
Posted by socketadmin at 10:00 AM | Permalink | Comments (37) | (email story)
Where Are Kate Bush And Peter Gabriel When You Need Them?
Despite federal rate cuts, mortgage rates that remain well below historic averages and even HOPE, according to the Mortgage Bankers Association U.S. foreclosure rates are at an all-time high.
New foreclosures jumped to 0.83 percent of all home loans in the fourth quarter from 0.54 percent a year earlier. Late payments rose to a 23-year high, the organization said in a report today.
"We're seeing people give up even before they get to the reset because they couldn't afford the home in the first place," said Jay Brinkmann, vice president of research and economics for the Washington-based trade group.
And while the majority of new foreclosures (42%) are on adjustable-rate subprime mortgage products, “[a]nother 20 percent of new foreclosures were prime adjustable-rate mortgages, which accounted for 15 percent of all home loans, according to the report.”
Ah yes, those ARMS.
∙ U.S. Mortgage Foreclosures Rise as Owners 'Give Up' [Bloomberg]
∙ An ARM (And Quite Possibly A Leg) [SocketSite 6/05]
Posted by socketadmin at 8:41 AM | Permalink | Comments (5) | (email story)
March 5, 2008
JQ: While The Fed Giveth (Cuts), The Street Taketh Away (Spreads)
"The extra yield that investors demand to own so-called agency mortgage-backed securities over 10-year U.S. Treasuries rose to the highest since 1986, boosting the cost of loans for homebuyers considered the least likely to default.
The difference in yields on the Bloomberg index for Fannie Mae's current-coupon, 30-year fixed-rate mortgage bonds and 10- year government notes widened about 1 basis point, to 204 basis points, or 70 basis points higher than Jan. 15. The spread helps determine the interest rate homeowners pay on new prime mortgages of $417,000 or less. A basis point is 0.01 percentage point."
"Spreads tightened last week when the regulator for Fannie Mae and Freddie Mac, two of the largest buyers of the securities they guarantee, announced that temporary caps on their $1.5 trillion portfolio would be lifted. Investors have realized that the step was unimportant because the companies remain "capital-constrained," [a] New York-based UBS analysts wrote."
∙ Agency Mortgage-Backed Bond Spreads Reach Highest Since 1986 [Bloomberg]
∙ JustQuotes: What The OFHEO Are They Thinking? [SocketSite]
Posted by socketadmin at 9:04 AM | Permalink | Comments (8) | (email story)
March 3, 2008
SocketSite's San Francisco Listed Housing Inventory Update: 3/03/08
While we’ve seen sales volume in San Francisco trending up over the past two months, new listings continue to outpace new contracts as inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 5% over the past two weeks and is up 42% on a year-over-year basis.
Do keep in mind, however, that while sales volume is trending up, it’s still running almost 30% under the pace of 2007. And combined with increasing inventory, it has resulted in a near doubling of months of listed inventory versus the same time last year.
∙ SocketSite's San Francisco Listed Housing Inventory Update: 2/19/08 [SocketSite]
∙ San Francisco Sales Activity In January: Down Again (-27.1% YOY) [SocketSite]
Posted by socketadmin at 3:00 AM | Permalink | Comments (24) | (email story)
February 26, 2008
December S&P/Case-Shiller: San Francisco MSA Hits Double-Digit Dip
According to the December 2007 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 3.2% from November '07 to December ’07 and are down 10.8% year-over-year. For the broader 10-City composite (CSXR), year-over-year price growth is down 9.8% (having fallen 2.3% from November).
Miami remains the weakest market, reporting a double-digit annual decline of 17.5%, followed by Las Vegas and Phoenix at -15.3% each. In December, San Francisco slipped into negative double-digit territory with an annual return of -10.8%. Charlotte, Portland and Seattle are the only three MSAs still experiencing positive annual growth rates; however, Seattle came in at only +0.5%, an almost flat growth rate.
Prices fell across all three price tiers for the San Francisco MSA with the rate of decline increasing most significantly for the middle two-thirds of homes.
The bottom third (under $565,563 at the time of acquisition) fell 5.7% from November to December (down 25.3% YOY); the middle third fell 4.0% from November to December (down 12.1% YOY); and the top third (over $815,549 at the time of acquisition) fell 2.1% from November to December (down 2.1% YOY).
The standard SocketSite S&P/Case-Shiller footnote: The HPI only tracks single-family homes (not condominiums which represent half the transactions in San Francisco), is imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best), and includes San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA).
∙ Year End Numbers Mark Widespread Declines [Standard&Poor's]
∙ November S&P/Case-Shiller: San Francisco MSA Continues Decline [SocketSite]
Posted by socketadmin at 6:39 AM | Permalink | Comments (97) | (email story)
February 19, 2008
SocketSite's San Francisco Listed Housing Inventory Update: 2/19/08
Despite some reports to the contrary, new listings continue to outpace new contracts in San Francisco as the inventory of Active listed single-family homes, condos, and TICs in San Francisco increased slightly (4.6%) over the past couple of weeks and is currently up 37% on a year-over-year basis.
∙ SocketSite's San Francisco Listed Housing Inventory Update: 2/04/08 [SocketSite]
Posted by socketadmin at 3:15 AM | Permalink | Comments (32) | (email story)
February 14, 2008
San Francisco Sales Activity In January: Down Again (-27.1% YOY)
According to DataQuick, sales volume for existing homes in San Francisco fell 27.1% on a year-over-year basis last month (293 sales in January ’08 versus 402 sales in January ‘07) and fell 34.2% compared to the month prior (445 recorded sales in December ‘07). And as we've noted over the past three months, the data once again suggests that October’s uptick in reported sales activity was at least partially driven by a delay in September purchases/closings rather than a significant rebound in buyer activity.
The median sales price in January was $744,000, down 0.8% compared to January ’07 ($750,000) but up 1.8% compared to the month prior. That being said, we continue to believe that mix is playing a significant role in supporting the median in San Francisco.
For the greater Bay Area, sales volume in January was down 41.9% on a year-over-year basis and fell 29.2% from the month prior (3,586 recorded sales in January '08 versus 6,168 in January ’07 and 5,065 this past December). The recorded median sales price fell 8.5% on a year-over-year basis and was down 6.4% compared to the month prior.
Last month's sales were the lowest for any month in DataQuick's statistics, which go back to 1988. Sales have decreased on a year-over-year basis for 36 consecutive months. Prior to last month the slowest January was in 1995, when 4,326 homes sold. The strongest January, in 2005, posted 8,298 sales. The average for the month is 6,319 sales.
At the extremes, Napa recorded a 55.1% year-over-year reduction in sales volume and a 1.8% drop in median sales price, while Marin was the best performing Bay Area county with a 1.8% increase in Median Sales Price (but a 37.4% drop in sales volume). Both Contra Costa and Alameda Counties recorded significant drops in both sales volume (down 42.4% and 39.0% respectively) and median sales price (down 15.8% and 14.4% respectively).
∙ Bay Area home sales lowest for any month in two decades [DQNews]
∙ San Francisco Sales Activity In December: Down Again (-24.4% YOY) [SocketSite]
Posted by socketadmin at 11:10 AM | Permalink | Comments (108) | (email story)
February 7, 2008
Foreclosure Activity In San Francisco As Mapped By Trulia: 2/07/08
As a reader points out, over the past two months the number of San Francisco properties in some stage of foreclosure as mapped by Trulia has increased from 215 to 409.
And while the majority of mapped properties remain in District 10 (and at this point have only received notices of default), we will point out a noticeable shift of activity to the southwest (i.e., not Bayview).
∙ Current Foreclosure Activity In San Francisco As Mapped By Trulia [SocketSite]
Posted by socketadmin at 9:45 AM | Permalink | Comments (76) | (email story)
February 4, 2008
SocketSite's San Francisco Listed Housing Inventory Update: 2/04/08
Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased slightly (5.2%) over the past couple of weeks and is currently running just over 29% higher on a year-over-year basis (up 38% compared to 2006). And yes, our Q1 2008 Complete Inventory Index (Cii) will be published this afternoon tomorrow.
UPDATE: While listed inventory is up, according to a plugged-in reader preliminary sales totals for last month are currently down 35% on a year-over-year basis, down 46% as compared to January 2004, and could possibly represent a 14+ year low.
∙ SocketSite’s Complete Inventory Index (Cii) [SocketSite]
∙ SocketSite’s Complete Inventory Index (Cii): Q1 2008 (San Francisco) [SocketSite]
Posted by socketadmin at 6:45 AM | Permalink | Comments (16) | (email story)
February 1, 2008
JustQuotes: Crunch Goes The Construction Captial For Condominiums
"While a dozen amenity-packed deluxe condo projects have vied for attention over the past three years, financing for new construction has dried up in recent months. Instead of the 10 to 15 percent equity common in past few years, lenders now look for developers to put in 40 percent of construction costs, and few banks are willing to lend more than $50 million for new condo projects, according to Michael Joseph of Kearny Street Capital, a commercial mortgage broker who worked with Jackson Pacific on [One Hawthorne].
'A lot of banks are licking their wounds right now and they are not interested in more speculative development,' said Joseph."
∙ New S.F. condo project will be a rarity in 2008 [Business Times]
∙ One Hawthorne: The Design (And Some Details) Of What’s On The Way [SocketSite]
Posted by socketadmin at 3:15 AM | Permalink | Comments (4) | (email story)
January 30, 2008
Listed San Francisco Condo Sales Breakdown: December 2007
The December '07 breakdown for listed condominium sales in San Francisco has been published by the San Francisco Association of Realtors (and posted by the SFCAHomes Blog).
As reported, listed condo sales volume in San Francisco was down 32.8% on a year-over-year basis with the biggest losses in District 5 (down 14 sales or 37.8%), District 1 (down 11 sales or 64.7%) and District 10 (down 10 sales or 90.9%).
And if you’re a proponent of Median Sales Price as a measure of anything other than what people are buying (which we’re really not), it might be interesting to note that while District 5 was up 10.7% year-over-year on 23 sales, District 9 was down 16.4% on 39 sales and District 7 was down 4.7% on 16.
∙ December 2007 Condo Market Wrap (pdf) [SFCAHomes Blog]
Posted by socketadmin at 10:28 AM | Permalink | Comments (8) | (email story)
January 29, 2008
November S&P/Case-Shiller: San Francisco MSA Continues Decline
According to the November 2007 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 3.2% from October '07 to November ’07 and are down 8.6% year-over-year. For the broader 10-City composite (CSXR), year-over-year price growth is down 8.4% (having fallen 2.2% from October).
Miami remains the weakest market, reporting a double-digit annual decline of 15.1%. San Diego followed with -13.4%, Las Vegas with -13.2% and Detroit with –13.0%. Seven of the metro areas are now posting double digit declines in their annual growth rates. Charlotte, Portland and Seattle are the only three MSAs still experiencing positive annual growth rates.
Prices fell across all three price tiers for the San Francisco MSA with the rate of decline leveling off for the lower two-thirds of homes but accelerating at the top.
The bottom third (under $586,277 at the time of acquisition) fell 5.3% from September to October (down 21.3% YOY); the middle third fell 2.5% from September to October (down 8.5% YOY); and the top third (over $834,425 at the time of acquisition) fell 3.1% from September to October (down 1.6% YOY).
The standard SocketSite S&P/Case-Shiller footnote: The HPI only tracks single-family homes (not condominiums which represent half the transactions in San Francisco), is imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best), and includes San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA).
∙ Record Declines in Home Prices Continue in November (pdf) [Standard&Poor's]
∙ October S&P/Case-Shiller: San Francisco MSA And Price Tiers Fall [SocketSite]
Posted by socketadmin at 7:14 AM | Permalink | Comments (70) | (email story)
January 28, 2008
Recap: What’s The Scoop On Foreign Investment In San Francisco?
Four months ago we asked the readers, “What’s The Scoop On Foreign Investment In San Francisco?” And perhaps Malin Giddings' quote in yesterday’s Chronicle summarizes our readers’ comments best:
"I know that there are a lot of sellers who want that to be true, and I know that the Europeans are definitely buying in New York," said Malin Giddings, who specializes in upscale San Francisco real estate for TRI Coldwell Banker. "But we see very few foreigners buying [here]."
∙ What’s The Scoop On Foreign Investment In San Francisco? [SocketSite]
∙ Foreigners get a piece of the real estate pie [SFGate]
Posted by socketadmin at 8:35 AM | Permalink | Comments (18) | (email story)
January 22, 2008
Bay Area Notices Of Default Head North. And South. And East.
While a 93.1% YOY increase in San Francisco “Notice of Default” (NOD) activity last quarter sounds quite dramatic, in absolute terms it still represents relatively few properties (334). But the number is growing. And as is happening statewide, we're seeing an increase in the percentage of notices that end up being bank owned.
Of the homeowners in default [throughout California], an estimated 41 percent emerge from the foreclosure process by bringing their payments current, refinancing, or selling the home and paying off what they owe. A year ago it was about 71 percent. The increased portion of homes lost to foreclosure reflects the slow real estate market, as well as the number of homes bought during the height of the market with multiple-loan financing, which makes 'work-outs' difficult.
Within the greater Bay Area, Contra Costa hit a record level of Q4 default activity (3,805 notices, up 151.8% year-over-year) as did Sacramento (5,807 notices, up 120.4% year-over-year). And neither Alameda (2,573 notices, up 119.4%) nor Santa Clara (2,162 notices, up 147.4%) were too far behind.
Most of the loans that went into default last quarter were originated between August 2005 and October 2006. The median age was 22 months, up from 15 a year earlier, indicating that the pool of at-risk home loans is getting larger.
And as we wrote nine months ago, "keep in mind that long-term interest rates remain near historic lows, and according to most, the Bay Area economy remains strong (and incomes are up)."
∙ California Foreclosure Activity Still Rising [DQNews]
∙ Bay Area “Notices Of Default” Heading North? (So To Speak) [SocketSite]
Posted by socketadmin at 12:39 PM | Permalink | Comments (6) | (email story)
January 21, 2008
SocketSite's San Francisco Listed Housing Inventory Update: 1/21/08
Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased just over 21% over the past couple of weeks, a normal December to January bump. Less than 15% of the inventory added over the past couple of weeks was in District 10. And listed inventory continues to run ~23% higher on a year-over-year basis (up ~36% compared to 2006).
Keep in mind, however, that we still haven’t seen the return of a significant number of listings that were withdrawn from the market at the end of last year, and we expect to see a near-term increase in listings for properties that are being sold to fund purchases in either Infinity or One Rincon Hill. And at 1,053 Active listings, we’re running about three months ahead of schedule compared to either 2006 or 2007.
Combined with the downward trend in sales volume, we estimate Months of Listed Inventory has increased about 50% on a year-over-year basis (from 2.1 to an estimated 3.3). And with regard to unlisted inventory, plug in next Monday (1/28) for our Q1 2008 Complete Inventory Index (Cii).
∙ What Happens When It’s Time To Fund? We’ll Have To Wait And See [SocketSite]
∙ Walkthroughs At Infinity: A Chance To Share Your Impressions [SocketSite]
∙ One Rincon Hill: Closings, Walkthroughs, And (Almost) Anything Else [SocketSite]
∙ SocketSite's San Francisco Listed Housing Inventory Update: 1/02/08 [SocketSite]
∙ San Francisco Sales Activity In December: Down Again (-24.4% YOY) [SocketSite]
∙ SocketSite’s Complete Inventory Index (Cii) [SocketSite]
Posted by socketadmin at 4:15 AM | Permalink | Comments (30) | (email story)
January 18, 2008
Bay Area Rents Surge, But Housing P/E Ratio Remains Out Of Line
There’s no doubt Bay Area average rents are up. And while we wouldn’t be surprised to see another 10-15% increase in 2008 (at least for San Francisco proper), keep in mind that the current housing Price-to-Earnings ratio is still well above its long-term average for the San Francisco MSA.
An analysis by Credit Suisse pegged the historical housing P/E ratio for the San Francisco MSA at 24x Earnings (or annual rent) versus a top 52 market average of 16.6x. So yes, we have long paid a premium (compared to most other areas) to buy versus rent in the Bay Area (or as many often comment, “it has always been expensive to buy here”).
That being said, the same Credit Suisse analysis pegged the housing P/E ratio for the San Francisco MSA at 42x in 2006. Assuming no change in property values and a 9.4% increase in rents during 2007, the current P/E ratio would be 38.4x. And a return to the historical 24x would either require rents to rise another 60%, property values to fall 37.5%, or a combination of the two.
∙ Bay Area rents surge 9.4% in last year [SFGate]
∙ San Francisco’s Housing P/E [SocketSite 5/05]
Posted by socketadmin at 11:29 AM | Permalink | Comments (92) | (email story)
A San Francisco Landlord Wants Your Thoughts (And To Cash Out)
From a plugged-in reader and landlord in San Francisco:
As a [landlord], I'm seeing rents zoom past dotcom levels and also [Gross Rent Multipliers] are at all time highs. When do you think this cycle will peak?
I have significant capital gains and want to sell my commercial property and buy multiple SFHs via 1031 exchange, and live in each for a couple of years to cash out $500K tax-free a piece. There has to [be] a point in time to pull the trigger where commercial property peaks and SFHs bottom. Some of you sound like astute investors, what do you think?
Bottom line is, I'm getting old and would rather be holding cash in this uncertain economy.
And speaking of getting older in the Bay Area, “[w]ith almost 18 percent of its population over 60, San Francisco is already the grayest major metropolis in the country. By 2020, it is expected that more than 21 percent of the population will be over 60 as Baby Boomers age and lifespans increase." Oh, and “30 percent of the subsidized affordable housing being built or in the pipeline in San Francisco is for seniors.”
∙ Bay Area Rents Surge, But Housing P/E Ratio Remains Out Of Line [SocketSite]
∙ S.F. faces silver tsunami [San Francisco Business Times]
Posted by socketadmin at 3:15 AM | Permalink | Comments (14) | (email story)
January 17, 2008
San Francisco Sales Activity In December: Down Again (-24.4% YOY)
According to DataQuick, sales volume for existing homes in San Francisco fell 24.4% on a year-over-year basis last month (445 sales in December ’07 versus a revised 589 sales in December ’06) and fell 7.1% compared to the month prior (479 recorded sales in November ‘07). And as we've noted over the past two months, the data once again suggests that October’s uptick in reported sales activity was at least partially driven by a delay in September closings rather than a significant rebound in buyer activity.
The median sales price in December was $731,000, down 1.9% compared to a revised December ’06 ($745,000) and down 10.3% compared to the month prior. That being said, we continue to believe that mix is playing a significant role in supporting the median.
For the greater Bay Area, sales volume in November was down 39.5% on a year-over-year basis and fell 1.2% from the month prior (5,065 recorded sales in December '07 versus a revised 8,372 in December ’06 and 5,127 this past November). The recorded median sales price fell 4.9% on a revised year-over-year basis and was down 6.6% compared to the month prior.
Last month was the slowest December is DataQuick's statistics, which go back to 1988. Sales have decreased on a year-over-year basis for 35 consecutive months. Until last month, the slowest December was in 1990, when 5,458 homes sold. The strongest December, in 2003, saw 12,349 sales. The average for the month is 8,903.
At the extremes, Sonoma recorded a 48.5% year-over-year reduction in sales volume and a 21.9% drop in median sales price, while Napa was the best performing Bay Area county with no change (0.0%) in it's Median Sales Price (but a 43.3% drop in sales volume).
∙ Bay Area home sales drag along bottom, median price back to 2005 [DataQuick]
∙ San Francisco Sales Activity In November: Back Down (-15.7% YOY) [SocketSite]
Posted by socketadmin at 11:28 AM | Permalink | Comments (76) | (email story)
January 16, 2008
Listed Single-Family Home Sales Volume Down 27.9% In December
According to the San Francisco Association of Realtors (and via the SFCAHomes Blog), sales volume for listed single-family homes in San Francisco was down 27.9% on a year-over-year basis in December.
The largest declines in sales (not "prices") occurred in districts 9 (down 62.5%), 5 (down 50%), and 4 (down 27.8%). The much maligned district 10 was down 11.9%. And only district 7 recorded an increase in sales activity: up 100% (from 3 to 6 sales).
And before anybody starts touting increases in median sales price as proof of appreciation, do keep in mind that the “median selling price” in district 7 increased from $1,850,000 in December of 2006 to $4,005,000 in December of 2007 (an increase of 116%). Nope, there's definitely no "mix" in these numbers.
∙ Single Family Homes Market Wrap December 2007 San Francisco [SFCAHomes Blog]
Posted by socketadmin at 9:13 AM | Permalink | Comments (53) | (email story)
January 2, 2008
SocketSite's San Francisco Listed Housing Inventory Update: 1/02/08
The year (2007) ended with an inventory of Active listed single-family homes, condos, and TICs in San Francisco that was 23.9% higher on a year-over-year basis. And more specifically (and possibly telling), 59.9% higher for single-family homes (driven primarily by