SocketSite™

CATEGORY ARCHIVE: Trends

November 6, 2009

U.S. Unemployment At 10.2 Percent, Five Tenths Above San Francisco

"The unemployment rate in the U.S. soared to a 26-year high of 10.2 percent in October and employers cut more jobs than forecast, underscoring why Federal Reserve policy makers say interest rates will remain near zero."

∙ Unemployment in U.S. Jumps to 10.2%, Payrolls Fall [Bloomberg]
∙ San Francisco County Unemployment At 9.7 Percent In September [SocketSite]

Posted by socketadmin at 6:30 AM | Permalink | Comments (1) | (email story)

November 3, 2009

Medians Are Up, But Don’t Confuse That With Increasing "Prices"

SFGate recently ran a bit called "Is the bubble back?" highlighting a "creeping" median sales price from August to September in San Francisco as evidence of increasing prices and a real estate "comeback."

Ignoring the fact that the featured RE Report summary data for August doesn’t tie to their own District level data (288 "Home" and 207 "Condo" sales according to their summary versus 202 and 188 sales respectively when we sum their District data), perhaps a basic understanding of what’s driving the change in median sales price is in order.

Repeating the down and dirty analysis we outlined a year ago, if we rank order average District medians in August and September from low-cost to high-cost areas (considering condos and single-family homes as two distinct "Districts"), establish a median "District" or cutoff based on total transactions, and then compare the number of sales in Districts above and below said median we see a nominal 1% decrease in "low-cost" District sales versus a 10% increase in "high-cost" district sales.

Isolating single-family home and condo sales, we see a 23% decrease in "low-cost" district sales versus a 2% decrease in "high-cost" districts for single-family homes. And for condos it’s a 9% increase in "low-cost" districts versus a 22% increase in "high-cost" districts.

In other words, absent any change in underlying "prices," or even despite a decrease, the median sales price in San Francisco was bound to increase as the proportion (mix) of high-cost home sales increased.

And for the last time (we can dream), while median sales price isn’t a bad measure of what people are buying, using changes in median sales price as a proxy for market appreciation (or depreciation) is a lousy if not misleading measure when mix is changing as well.

∙ Is the bubble back? Median prices creeping up in San Francisco [SFGate]
∙ SocketSite's San Francisco Listed Housing Inventory Update: 8/05/08 [SocketSite]

Posted by socketadmin at 3:15 PM | Permalink | Comments (32) | (email story)

November 2, 2009

Employment And Earnings Matter? Who Knew...

"...the belief among many lenders is that the demand for commercial space and condominiums could be "extraordinarily weak" for several more years, in large part because businesses aren't showing signs of growing or hiring. San Francisco's unemployment rate has hovered near 10 percent since June. The state figure was 12.2 percent in September, lending support to the "jobless recovery" theory."

∙ Building in S.F. not expected to grow for years [SFGate]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]
∙ San Francisco County Unemployment At 9.7 Percent In September [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (46) | (email story)

SocketSite's San Francisco Listed Housing Inventory: 11/02/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco fell 4.2% over the past two weeks and is currently running 21.8% under 2008 levels on a year-over-year basis (down 29% for single-family homes and down 17% for condos/TICs) but remains within five percent of listed inventory levels at the same point in 2006/2007.

36% of active listings in San Francisco have undergone at least one price reduction (versus 40% a year ago) while the percentage of active listings that are either already bank owned or seeking a short sale is just over 10%.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Inventory: 10/13/09 [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (31) | (email story)

October 30, 2009

San Francisco’s Commercial Sublease Snapshot: November 2009

According to Colliers, 2,411,525 square feet of commercial sublease space is currently on the market in San Francisco, down 248,159 square feet over the past 30 days but once again driven by withdrawn listings rather than absorption (negative 89,527 square feet).

The percentage of space available for sublease that is currently vacant is 53 percent.

∙ San Francisco’s Commercial Sublease Snapshot: October 2009 [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (1) | (email story)

October 29, 2009

Will The Stimulated Economy Be As "Sticky" As Real Estate?

"The U.S. economy grew in the third quarter for the first time in more than a year, propelled by stimulus-driven gains in consumer spending and home building."

UPDATE (10/30): "Americans cut spending for the first time in five months and a gauge of confidence weakened, signaling consumers will make a limited contribution to the recovery without government incentives."

∙ Economy in U.S. Expands for First Time in a Year [Bloomberg]
∙ "Credits For Condos" (And Other New Homes) A Clunker As Well? [SocketSite]
∙ From ‘Sticky’ To ‘Slippery’: A Fundamental Change In The Housing Market? [SocketSite]
∙ U.S. Economy: Consumer Spending, Confidence Fall [Bloomberg]

Posted by socketadmin at 10:45 AM | Permalink | Comments (29) | (email story)

October 28, 2009

"Credits For Condos" (And Other New Homes) A Clunker As Well?

Car sales rocketed after the government rolled out their "Cash for Clunkers" sales incentive, but then plummeted when it expired.

New home sales rebounded after the government rolled out tax credits for new home purchases, but have already started to fall in the face of a program end.

As a plugged-in reader correctly notes:

Even builders of more upscale homes have felt the impact of the looming deadline. That's because those move-up buyers will have trouble selling their homes without the incentive of the credit.

The only surprising thing about the decline, that it seems to have been "unexpected."

∙ U.S. New-Home Sales Fall as Credit Nears Expiration [Bloomberg]
∙ Whether Or Not Credits Moved The SF Market, Phase Out Hits Home [SocketSite]
∙ Clunker hangover knocks sales down at Chrysler, Ford, GM [USA Today]

Posted by socketadmin at 10:00 AM | Permalink | Comments (9) | (email story)

October 27, 2009

August S&P/Case-Shiller: San Francisco MSA Continues MOM Uptick

According to the August 2009 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA gained 2.8% from July ’09 to August '09, down 12.5% year-over-year and down 39.3% from a peak in May 2006, but up from a 46.1% fall from peak as recorded in March 2009.

For the broader 10-City composite (CSXR), home values gained 1.3% from July to August but remain down 30.2% from a peak in June 2006 (down 10.6% year-over-year).

While many of the markets remain down versus this time last year, the relative rate of decline has shown some real improvement. California, in particular, has seen some real positive prints in recent months. We see this general trend whether you look at the as-reported data or the seasonally adjusted figures.

Once again, however, we do want to remind people of the upcoming expiration of the Federal First-Time Buyer’s Tax Credit in November and anticipated higher unemployment rates through year-end. Both may have a dampening effect on home prices.

On a month-over-month basis San Francisco MSA single-family home prices rose across all three price tiers for the third time since May 2006, albeit only nominally at the top.

The bottom third (under $299,828 at the time of acquisition) gained 3.0% from July to August (down 20.4% YOY); the middle third gained 1.8% from July to August (down 10.8% YOY); and the top third (over $558,379 at the time of acquisition) gained 0.2% from July to August (down 12.5% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA are back to May 2000 levels having fallen 60% from a peak in August 2006, the middle third is hovering around May 2002 levels having fallen 38% from a peak in May 2006, and the top third is almost back to March 2004 levels having fallen 24% from a peak in August 2007.

Condo values in the San Francisco MSA fell 0.5% from July ’09 to August '09, down 15.7% on a year-over-year basis and down 27.9% from an October 2005 high. San Francisco was the only MSA to record a month over month decline.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).

∙ Home Prices Continue to Improve According to the S&P/Case-Shiller Index [S&P]
∙ July S&P/Case-Shiller: San Francisco MSA Continues MOM Uptick [SocketSite]
∙ Whether Or Not Credits Moved The SF Market, Phase Out Hits Home [SocketSite]
∙ San Francisco County Unemployment At 9.7 Percent In September [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (41) | (email story)

October 22, 2009

Actual San Francisco Foreclosures Up 31.6% QOQ (Down 6.8% YOY)

Bay Area Notices of Default (NODs) in the third quarter of 2009 rose 25.2% on a year-over-year basis, up 72.0% in San Francisco proper (from 353 to 607). NOD activity in San Francisco increased 3.1% from the second to third quarter.

Actual Bay Area foreclosures in the third quarter fell 38.3% on a year-over-year basis (from 12,093 to 7,462) with Contra Costa (down 43.9% to 2,053), Alameda (down 30.2% to 1,760) and Santa Clara (down 42.9% to 1,237) leading the way with respect to volume.

Second quarter recorded foreclosures in San Francisco totaled 179, down 6.8% on a year-over-year basis but up 31.6% (43 homes) from the second quarter 2009. Expect San Francisco foreclosures to continue to rise over the next few quarters as moratorium delayed NODs work their way through the system.

∙ California Mortgage Defaults Trend Down Again [DataQuick]
∙ Actual San Francisco Foreclosures Up 34.7% QOQ (Down 3.5% YOY) [SocketSite]

Posted by socketadmin at 1:00 PM | Permalink | Comments (62) | (email story)

October 21, 2009

RealFacts Reports Asking Rents Down 5.6% In San Francisco

As we wrote in April:

Based on a RealFacts survey of "professionally managed apartment complexes with 50 or more units," The Chronicle reports that average rents in San Francisco are off by a nominal 0.1 percent on a year-over-year basis and 95.8 percent occupancy (down 1.9 percent).

Unfortunately, and not too ironically, the RealFacts survey reflects the not so real market of asking rather than effective rents (after incentives). And keep in mind that over 700 units of new rental inventory has recently (or will soon) come on line in San Francisco and will need to be absorbed.

That new supply includes 192 units at Strata which offered a plugged-in reader a year of free parking and one month free rent, an effective discount of over 8 percent on a one year lease which wouldn't be reflected in the RealFacts survery of asking rents.

As the Chronicle and RealFacts report today, the average asking rents that were down 0.1 percent on a year-over-year basis in April are down 5.6% on a year-over-year basis today.

∙ RealFacts Reports (Not So Real) Asking Rents Flat In San Francisco [SocketSite]
∙ Apartment market moving on up [SFGate]

Posted by socketadmin at 8:15 AM | Permalink | Comments (33) | (email story)

October 16, 2009

San Francisco County Unemployment At 9.7 Percent In September

Preliminary September labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 9.7%, 8.0% and 9.0% respectively, down 0.4 percentage points in San Francisco, down 0.3 percentage points in Marin, and down 0.2 percentage points in Marin from August.

While the number of unemployed in San Francisco decreased by 2,200 (from 45,600 to 43,400) in September, however, the number of employed fell by 2,600 (from 406,300 to 403,700) and the labor force contracted by 4,900 (from 452,000 to 447,100).

Overall California unemployment fell by 0.1 percentage points to 12.0%.

∙ Monthly Labor Force Data for Counties: September 2009 (Preliminary) [EDD]
∙ San Francisco County Unemployment Up To 10.1 Percent In August [SocketSite]

Posted by socketadmin at 3:15 PM | Permalink | Comments (14) | (email story)

October 15, 2009

San Francisco Recorded Sales Activity In September: Up 17% YOY

According to DataQuick, recorded home sales volume in San Francisco jumped 17% on a year-over-year basis last month (536 recorded sales in September ’09 versus 458 sales in September ‘08) and rose 2.4% compared to the month prior. The difference between recorded and listed sales activity continues to be driven by unlisted new construction sales.

San Francisco's median sales price in September was $650,000, down 3.7% compared to September ’08 ($675,000) but up 2.4% compared to the month prior.

For the greater Bay Area, recorded sales volume in September was up 4.8% on a year-over-year basis and up 4.8% from the month prior (7,879 recorded sales in September '09 versus 7,271 in August ’08 and 7,518 in August '09), while the recorded median sales price fell 8.8% on a year-over-year basis, up 1.4% compared to the month prior.

"This market may be closer to normal than it was a half year ago, but it's still out of kilter, fueled in large part by incentives and the processing of distressed properties. The sales mix is still lopsided, tilting toward the low end, and lending institutions are only making really safe mortgage loans. For those who can buy, there are some very attractive opportunities. But it still looks like a lot of normal supply-and-demand activity has been put on hold until the economy comes back," said John Walsh, MDA DataQuick president.

At the extremes, San Mateo recorded a 35.1% year-over-year increase in sales volume (a gain of 162 transactions) on a 5.5% drop in median sales price while Solano recorded a 5.0% year-over-year increase in sales volume (a gain of 32 transactions) on a 24.5% drop in median sales price.

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

∙ Slight uptick in Bay Area home sales and prices [DQnews]
∙ San Francisco Recorded Sales Activity In August: Down 2.8% YOY [SocketSite]
∙ Listed San Francisco Single-Family Home September Sales: Down 4% [SocketSite]

Posted by socketadmin at 12:45 PM | Permalink | Comments (33) | (email story)

U.S. Foreclosure Filings Jump With Prime And Alt-A Leading The Way

Foreclosure filings in the U.S. increased 29 percent on a year-over-year basis in September, but fell 4 percent as compared to August (a record high month).

Mounting foreclosures mean U.S. home prices probably will resume falling, analysts from Amherst Securities Group LP in New York said Sept. 23. A “shadow inventory” of 7 million properties are in the foreclosure process or likely to be seized, up from 1.27 million in 2005, they said.

The pace of prime and so-called alt-A loan defaults is accelerating as subprime defaults slow, Standard & Poor’s analysts led by Diane Westerback said yesterday in a report. Prime loans are those made to borrowers with the best credit records while alt-A loans are considered riskier because they were often granted without documenting the borrower’s income.

For the third quarter U.S. foreclosure filings jumped 23 percent year-over-year.

∙ U.S. Foreclosure Filings Jump 23% to Record in Third Quarter [Bloomberg]
∙ Subprime And Alt-A Statistics By County: The Feds Mortgage Map [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (3) | (email story)

October 14, 2009

Party Like It’s 1999: Dow Crosses 10,000 For The First Time In A Year

While unemployment in San Francisco crossed the ten mark in August (10.1%), today the Dow crossed its ten mark (10,000) for the first time in a year. And which it first did in 1999.

∙ San Francisco County Unemployment Up To 10.1 Percent In August [SocketSite]

Posted by socketadmin at 11:50 AM | Permalink | Comments (15) | (email story)

October 13, 2009

SocketSite's San Francisco Listed Housing Inventory: 10/13/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco fell 2.8% over the past two weeks and is currently running 18.4% under last year’s levels on a year-over-year basis (down 24% for single-family homes and down 15% for condos/TICs) but is within five percent of listed inventory levels at the same point in 2006/2007.

Thirty-three (33) percent of active listings in San Francisco have undergone at least one price reduction while the percentage of active listings that are either already bank owned or seeking a short sale is down to 9.5%.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Inventory Update: 9/28/09 [SocketSite]

Posted by socketadmin at 11:45 AM | Permalink | Comments (57) | (email story)

Listed San Francisco Single-Family Home September Sales: Down 4%

Sales volume for listed single-family homes in San Francisco fell 4% on a year-over-year basis in September (184 transactions in 2008 versus 176 in 2009), down 10% versus August which is in line with an 11% seasonal drop in 2008.

The most significant drop in listed single-family home sales volume occurred in District 3, down 58% on a year-over-year basis (from 19 in 2008 to 9 in 2009) but with a 13% increase in median sales price (think mix).

On the other hand, listed single-family home sales volume in District 7 remained flat on a year-over-year basis at eight (8) sales but with a 20% drop in the median sales price and an average down 6%.

∙ Single Family Homes September ‘04, ‘06, ‘08, ‘09 [sanfranciscoschtuff.com]
∙ Listed San Francisco Single-Family Home Sales In August: Down 5% [SocketSite]
∙ San Francisco Real Estate Districts: Maps And Neighborhoods [SocketSite]

Posted by socketadmin at 11:15 AM | Permalink | Comments (0) | (email story)

October 5, 2009

A 25.7% Drop In Assessed Value For A Plugged-In Reader In 2009/10

A plugged-in reader reports:

So a year late and quite a few dollars short the Assessor's office granted my informal request for review and lowered my 09/10 assessed value by 25.7% from the "Prop 13 Base Year Value". So after saying my place gained value from Feb 2007 to January 2008 they now say it dropped at least 25% from January 08 to January 09 (and 22.7% from when I purchased it).

Once again, the average granted reduction for 2008/09 was 11.5%. And the San Francisco Tax Assessor’s tally for 2009/10 adjustments should be out soon. Tipsters?

UPDATE: Additional history with respect to the subject property, a 2/1 condo in District 6.

∙ Average Granted Assessed Value Reduction In San Francisco: 11.5% [SocketSite]

Posted by socketadmin at 10:45 AM | Permalink | Comments (57) | (email story)

October 2, 2009

The Real Real Estate Killer Rises Up

As we wrote in January, the real real estate killer and story this year will be unemployment. It’s now up to (at least) 9.8 percent in the U.S. and 10.1 percent in San Francisco county.

∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]
∙ U.S. Economy: September Job Losses Exceed Forecast [Bloomberg]
∙ U.S. Unemployment Probably Higher Than Reported, Silvia Says [Bloomberg]
∙ San Francisco County Unemployment Up To 10.1 Percent In August [SocketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (37) | (email story)

October 1, 2009

San Francisco’s Commercial Sublease Snapshot: October 2009

According to Colliers International, 2,659,684 square feet of commercial sublease space is currently on the market in San Francisco, down a net 61,396 square feet over the past 30 days but driven by withdrawn listings rather than absorption (negative 37,613 square feet).

The percentage of the space available for sublease that is currently vacant has risen from 49 to 55 percent.

∙ San Francisco’s Commercial Sublease Snapshot: September 2009 [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (9) | (email story)

September 30, 2009

Lemons To Lemons For Thirty Ex-Lembi Apartment Buildings

According to JK Dinnen, at least thirty (30) of the seventy-five (75) or so ex-Lembi owned San Francisco apartment buildings that had been taken back by the banks have been resold at discounts of 25 to 40 percent under what "the Lembis were paying for the buildings at the height of the market."

∙ Building buyers swoop on Lembi apartments [Business Times]
∙ The Chronicle Reports "Dozens," A Plugged-In Source Says Over 100 [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (18) | (email story)

September 29, 2009

July S&P/Case-Shiller: San Francisco MSA Continues MOM Uptick

According to the July 2009 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA gained 3.3% from June ’09 to July '09, down 17.9% year-over-year and down 41.0% from a peak in May 2006, but up from a 46.1% fall from peak as recorded in March 2009.

For the broader 10-City composite (CSXR), home values gained 1.7% from June to July but remain down 31.1% from a peak in June 2006 (down 12.7% year-over-year).

These figures continue to support an indication of stabilization in national real estate values, but we do need to be cautious in coming months to assess whether the housing market will weather the expiration of the Federal First-Time Buyer’s Tax Credit in November, anticipated higher unemployment rates and a possible increase in foreclosures.

On a month-over-month basis San Francisco MSA single-family home prices rose across all three price tiers for the second time since May 2006.

The bottom third (under $287,849 at the time of acquisition) gained 1.9% from June to July (down 26.4% YOY); the middle third gained 1.3% from June to July (down 14.3% YOY); and the top third (over $533,113 at the time of acquisition) gained 1.8% from June to July (down 14.5% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA remain at April 2000 levels having fallen 61% from a peak in August 2006, the middle third is hovering around April 2002 levels having fallen 39% from a peak in May 2006, and the top third is back to February 2004 levels having fallen 25% from a peak in August 2007.

Condo values in the San Francisco MSA gained 2.1% from June ’09 to July '09, down 17.7% on a year-over-year basis and down 27.5% from an October 2005 high.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).

∙ Broad Improvement in Home Prices According to S&P/Case-Shiller Index [S&P]
∙ June S&P/Case-Shiller: San Francisco MSA Up MOM Across All Tiers [SocketSite]
∙ March S&P/Case-Shiller: San Francisco Slide Slows But Continues Fall [SocketSite]
∙ San Francisco County Unemployment Up To 10.1 Percent In August [SocketSite]

Posted by socketadmin at 8:15 AM | Permalink | Comments (69) | (email story)

September 28, 2009

SocketSite's San Francisco Listed Housing Inventory Update: 9/28/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 3.6% over the past two weeks but is currently running 11.3% under last year’s levels on a year-over-year basis (down 16.2% for single-family homes and down 7.8% for condos/TICs) and within two percent of listed inventory levels at the same point in 2006 and 2007.

Thirty-three (33) percent of active listings in San Francisco have undergone at least one price reduction while the percentage of active listings that are either already bank owned or seeking a short sale is down to 10%.

Keep in mind that listed sales volume in August was down ten percent on a year-over-year basis as well.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Inventory Update: 9/14/09 [SocketSite]
∙ San Francisco Listed Sales Volume In August: Down 10% YOY [SocketSite]

Posted by socketadmin at 6:15 AM | Permalink | Comments (40) | (email story)

Record High Ratio Of Unemployed To Openings

At the end of 2001 US unemployed workers outnumbered job openings by a little over two to one, a ratio that climbed to almost three to one in 2003 but then fell to under two to one in 2004.

According to the New York Times and Bureau of Labor Statistics the ratio is currently six to one and climbing.

And while we don't have the ratio for San Francisco (tipsters?), San Francisco unemployment has reached double digits (10.1%) and a twenty-five year high.

∙ U.S. Job Seekers Exceed Openings by Record Ratio [NYT]
∙ San Francisco County Unemployment Up To 10.1 Percent In August [SocketSite]

Posted by socketadmin at 6:10 AM | Permalink | Comments (5) | (email story)

September 25, 2009

U.S. New Home Sales Climb On Discounts And Foreclosures

“Sales of new U.S. homes climbed in August to the highest level in almost a year as builders cut prices at a record pace to compete with the foreclosures that are flooding the market for previously owned houses.”

∙ New-Home Sales in U.S. Climb to Almost One-Year High [Bloomberg]

Posted by socketadmin at 8:15 AM | Permalink | Comments (10) | (email story)

September 21, 2009

San Francisco County Unemployment Up To 10.1 Percent In August

Preliminary August labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 10.1%, 8.3% and 9.2% respectively, up 0.2 percentage points in San Francisco and San Mateo and up 0.1 percentage points in Marin from June.

The 10.1% unemployment rate for San Francisco represents a new 25 year high.

The number of unemployed in San Francisco increased by 800 from 44,800 to 45,600 in August while the number of employed decreased by 3,000 (from 409,300 to 406,300) as the labor force decreased by 2,100 (from 454,100 to 452,000).

Overall California unemployment held steady at 12.1% percent in July.

∙ Monthly Labor Force Data for Counties: August 2009 (Preliminary) [EDD]
∙ San Francisco County Unemployment Up To 9.9 Percent In July [SocketSite]

Posted by socketadmin at 5:00 AM | Permalink | Comments (36) | (email story)

September 18, 2009

Wells Fargo Adds 375K Feet To San Francisco’s Negative Absorption

"Wells Fargo has terminated its 375,000-square-foot lease at 155 Fifth St. in San Francisco, adding another empty building to an office leasing market with a nearly 20 percent vacancy rate."

∙ Wells Fargo calls quits at S.F. office building [Business Times]
∙ San Francisco's Office Availability Rate Up To 20 Percent In Q2 2009 [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (8) | (email story)

September 17, 2009

San Francisco Recorded Sales Activity In August: Down 2.8% YOY

According to DataQuick, recorded home sales volume in San Francisco fell 2.8% on a year-over-year basis last month (514 recorded sales in August ’09 versus 529 sales in August ‘08) and fell 1.2% compared to the month prior. The difference between recorded and listed sales activity continues to be driven by unlisted new construction sales (think discounts and expiring tax incentives).

San Francisco's median sales price in August was $635,000, down 12.4% compared to August ’08 ($725,000) and down 1.2% compared to the month prior.

For the greater Bay Area, recorded sales volume in August was up 4.0% on a year-over-year basis but down 14.3% from the month prior (7,518 recorded sales in August '09 versus 7,232 in August ’08 and 8,771 in July '09), while the recorded median sales price fell 19.5% on a year-over-year basis, down 8.9% compared to the month prior and ending a four month string of upticks.

At the extremes, Alameda recorded a 21.0% year-over-year increase in sales volume (a gain of 267 transactions) on a 22.7% drop in median sales price while Solano recorded a 13.2% year-over-year increase in sales volume (a gain of 79 transactions) on a 25.7% drop in median sales price

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

∙ Bay Area August home sales and median price fall [DQnews]
∙ San Francisco Recorded Sales Activity In July: Down 10.8% YOY [SocketSite]
∙ San Francisco Listed Sales Volume In August: Down 10% YOY [SocketSite]

Posted by socketadmin at 12:30 PM | Permalink | Comments (55) | (email story)

September 14, 2009

SocketSite's San Francisco Listed Housing Inventory Update: 9/14/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 9.9% over the past two weeks in a typical post-Labor Day bounce. Listed inventory is currently running 6.2% under last year’s levels on a year-over-year basis (down 10.8% for single-family homes and down 2.9% for condos/TICs) and 2.7% lower than at the same point in 2006.

Roughly 31% of active listings in San Francisco having undergone at least once price reduction with the percentage of active listings that are currently either already bank owned or seeking a short sale hovering around 11%. Expect listed inventory levels to continue to climb over the next couple of months.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Inventory Update: 8/30/09 [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (22) | (email story)

September 9, 2009

How A Mere Ten Percent Drop Becomes A Hundred Plus Percent Loss

From Bloomberg's story about a spike in "wealthy individuals’" bankruptcy filings related to real estate:

“Real estate is an incredible thing on the downside,” said Jason Green, a bankruptcy attorney based in Washington. “Equities can only go to zero. Property can go well below zero,” because of expenses such as property taxes, insurance and maintenance on primary residences, vacation homes and investment properties.

And then there's that oft touted leverage. Oh, and if we’re not mistaken the image that accompanies Bloomberg’s story looks rather local and familiar.

∙ Wealthy Families Face Bankruptcy on Real Estate Crash [Bloomberg]

Posted by socketadmin at 8:45 AM | Permalink | Comments (8) | (email story)

September 8, 2009

San Francisco Listed Sales Volume In August: Down 10% YOY

While sales volume for listed single-family homes in San Francisco fell 5% on a year-over-year basis in August, condo sales volume fell 16.5% (176 transactions in August 2008 versus 147 in 2009), down 16% from July versus a 10% drop from July to August in 2008.

Combined listed single-family and condo sales volume dropped 10% YOY in August.

With respect to condos, the most pronounced drop in listed sales volume occurred in District 9, dropping 25% (from 67 sales in August of 2008 to 50 sales in August of 2009) on a 14% drop in median sales price from $700,000 to $600,000. Once again, think (and either thank or curse) new development sales offices discounting and stealing share.

On a percentage basis, the biggest drop in sales volume occured in District 5, down 35% from 29 to 19 on year-over-year basis in August on a 2% increase in median sales price but a 10% drop in average.

∙ Condos and Lofts August ‘04, ‘06, ‘08, ‘09 [sanfranciscoschtuff.com]
∙ Listed San Francisco Single-Family Home Sales In August: Down 5% [SocketSite]
∙ San Francisco Listed Sales Volume In July: Down 13% YOY [SocketSite]
∙ San Francisco Real Estate Districts: Maps And Neighborhoods [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (8) | (email story)

September 4, 2009

San Francisco’s Commercial Sublease Snapshot: September 2009

According to Colliers International, 2,721,080 square feet of commercial sublease space is currently on the market in San Francisco (49% of which is currently vacant), up a net 266,000 square feet over the past 30 days.

∙ San Francisco’s Commercial Sublease Snapshot: August 2009 [SocketSite]

Posted by socketadmin at 10:45 AM | Permalink | Comments (22) | (email story)

U.S. Unemployment At 9.7 Percent, Two Tenths Below San Francisco

"The pace of U.S. job losses slowed in August as signs emerged that the recession is ending, while the unemployment rate reached a 26-year high [9.7%]....A rising jobless rate, stagnant wages and falling home values signal a lack of consumer spending may curb an economic recovery."

∙ U.S. Payroll Losses Slow, Unemployment Rises to 9.7% [Bloomberg]
∙ San Francisco County Unemployment Up To 9.9 Percent In July [SocketSite]

Posted by socketadmin at 8:15 AM | Permalink | Comments (10) | (email story)

September 3, 2009

Listed San Francisco Single-Family Home Sales In August: Down 5%

Sales volume for listed single-family homes in San Francisco fell 5% on a year-over-year basis in August (206 transactions in 2008 versus 196 in 2009), down 12% versus July and versus a 6% drop fom July to August in 2008 according to San Francisco Schtuff.

The most significant drop in listed single-family home sales volume occurred in District 5, down 56% on a year-over-year basis (from 36 in 2008 to 16 in 2009) but with a 3% increase in median sales price (think mix of what's selling).

On the other hand, listed single-family home sales volume in District 1 doubled from 8 to 16 on a year-over-year basis on a 22% drop in the median sales and sales volume in Distruct 7 was flat at ten transactions on a 32% drop in median price.

∙ Single Family Homes August ‘04, ‘06, ‘08, ‘09 [sanfranciscoschtuff.com]
∙ Listed San Francisco Single-Family Home Sales In July: Up 2% YOY [SocketSite]
∙ San Francisco Real Estate Districts: Maps And Neighborhoods [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (21) | (email story)

August 31, 2009

SocketSite's San Francisco Listed Housing Inventory Update: 8/30/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco declined 10.3% over the past four weeks which is not to be unexpected leading up to Labor Day weekend. Listed inventory is currently running 1.5% under last year’s levels on a year-over-year basis (down 17.3% for single-family homes, up 11.2% for condos/TICs) and 12.7% higher than at the same point in 2006.

Roughly 37% of active listings in San Francisco having undergone at least once price reduction with the percentage of active listings that are currently either already bank owned or seeking a short sale hovering around 12%. Expect listed inventory levels to quickly jump around 20% after Labor Day.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Inventory Update: 8/03/09 [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (17) | (email story)

August 26, 2009

Cash For Closings Has Intended New Home Sales Results

Boosted by an expiring $8,000 tax credit for new-home buyers, the pace of U.S. new home sales increased 9.6 percent from June to July.

The jump in sales was led by a 32 percent surge in the Northeast. Purchases increased 16 percent in the South and 1 percent in the West. They dropped 7.6 percent in the Midwest.

At the same time, however, both sales volume and the median sales price for new homes remain down on a year-over-year basis (down 13 and 12 percent respectively).

∙ U.S. New Home Sales Jump 9.6%, Most in Four Years [Bloomberg]

Posted by socketadmin at 8:45 AM | Permalink | Comments (8) | (email story)

August 25, 2009

June S&P/Case-Shiller: San Francisco MSA Up MOM Across All Tiers

According to the June 2009 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA gained 3.8% from May ’09 to June '09, down 22.0% year-over-year and down 42.9% from a peak in May 2006, but up from a 46.1% fall from peak as recorded in March 2009.

For the broader 10-City composite (CSXR), home values gained 1.5% from May to June but remain down 32.3% from a peak in June 2006 (down 15.1% year-over-year).

While not alone, Las Vegas and Detroit continue to be two markets that are struggling severely. These are the only two markets that fell in June and saw deterioration in their annual rates of return. Since their relative peaks they have fallen 54.3% and 45.3%, respectively.

On a month-over-month basis San Francisco MSA single-family home prices rose across all three price tiers for the first time since May 2006.

The bottom third (under $276,283 at the time of acquisition) gained 0.8% from May to June (down 30.7% YOY); the middle third gained 2.8% from May to June (down 15.5% YOY); and the top third (over $507,504 at the time of acquisition) gained 2.4% from May to June (down 16.6% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA are hovering around April 2000 levels having fallen 62% from a peak in August 2006, the middle third is hovering around April 2002 levels having fallen 40% from a peak in May 2006, and the top third is back to January 2004 levels having fallen 26% from a peak in August 2007.

Condo values in the San Francisco MSA gained 2.8% from May ’09 to June '09, down 21.6% on a year-over-year basis and down 29.0% from an October 2005 high.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).

∙ Home Prices on an Upswing in the Second Quarter of 2009 [S&P]
∙ May S&P/Case-Shiller: San Francisco MSA Top Tier Up, Bottom Down [SocketSite]
∙ March S&P/Case-Shiller: San Francisco Slide Slows But Continues Fall [SocketSite]

Posted by socketadmin at 8:15 AM | Permalink | Comments (273) | (email story)

August 21, 2009

San Francisco Recorded Sales Activity In July: Down 10.8% YOY

According to DataQuick, recorded home sales volume in San Francisco fell 10.8% on a year-over-year basis last month (543 recorded sales in July ’09 versus 609 sales in July ‘08) and fell 3.2% compared to the month prior. The difference between recorded and listed sales activity continues to be driven by unlisted new construction sales.

San Francisco was once again one of only two Bay Area counties to record a year-over-year decline in sales volume in July with Marin falling 4.3%. San Francisco's median sales price in July was $642,426, down 14.2% compared to July ’08 ($749,000) and up 1.2% compared to the month prior.

For the greater Bay Area, recorded sales volume in July was up 15.6% on a year-over-year basis and up 1.5% from the month prior (8,771 recorded sales in July '09 versus 7,586 in July ’08 and 8,644 in June '09), while the recorded median sales price fell 16.0% on a year-over-year basis, up 12.2% compared to the month prior (the fourth uptick in 19 months).

The median’s $43,000 gain between June and July was mainly the result of a shift toward a greater portion of sales occurring in higher-priced neighborhoods. The trend has been fueled this summer by several factors, including: More distress in high-end areas, leading to more motivated sellers; more buyers sensing a bottom could be near; and increased availability of larger home loans, which had become more expensive and far more difficult to obtain after the credit crunch hit two years ago.

In another sign of a gradual comeback in home financing, the percentage of Bay Area homes purchased last month with an adjustable-rate mortgage rose to 6.6 percent – up from a record low of 3.0 percent in January 2009. The median sale price for homes purchased with those adjustable-rate loans last month was $766,500, while the median loan amount was $523,500. Adjustable-rate mortgages averaged about 61 percent of all Bay Area purchase loans this decade up until the credit crunch, after which they began to dry up quickly.

At the extremes, Santa Clara recorded a 32.5% year-over-year increase in sales volume (a gain of 639 transactions) on a 16.3% drop in median sales price while Solano recorded a 20.8% year-over-year increase in sales volume (a gain of 123 transactions) on a 27.3% drop in median sales price

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

∙ Bay Area home sales hit 4-year high; median price up [DQnews]
∙ San Francisco Recorded Sales Activity In June: Down 1.8% YOY [SocketSite]
∙ San Francisco Listed Sales Volume In July: Down 13% YOY [SocketSite]
∙ Infinity Sales Update: New Contracts Up But Driven By Discounts [SocketSite]

Posted by socketadmin at 10:15 AM | Permalink | Comments (57) | (email story)

San Francisco County Unemployment Up To 9.9 Percent In July

Preliminary July labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 9.9%, 8.2% and 9.0% respectively, up 0.1 percentage points for San Francisco and San Mateo and up 0.2 percentage points in Marin from June.

The 9.9% unemployment rate for San Francisco represents a new 25 year high.

The number of unemployed in San Francisco increased by 700 from 44,100 to 44,800 in July while the number of employed increased by 3,500 (from 405,800 to 409,300) as the labor force increased by 4,200 (from 449,900 to 454,100).

According to the State of California versus the Labor Department, overall California unemployment has broken through the 12 percent mark (12.1% percent in July).

∙ Monthly Labor Force Data for Counties: July 2009 (Preliminary) [EDD]
∙ San Francisco County Unemployment Jumps To 9.8 Percent In June [SocketSite]
∙ It’s Funny What Happens When People Are Forced To Sell, They Do [SocketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (8) | (email story)

It’s Funny What Happens When People Are Forced To Sell, They Do

While the pace of existing U.S. home sales increased 7.3 percent from June to July (the biggest monthly gain "since records began in 1999") and 5 percent year-over-year, forced sales are driving the activity (31 percent of sales in July were either foreclosures or distressed) and driving the median price down (15 percent on a year-over-year basis).

At the same time, inventory also increased by 7.3 percent, months of unsold inventory remained at 9.4, and U.S. unemployment continued to rise with California hitting 11.9%.

∙ Existing Home Sales in U.S. Jump to Two-Year High [Bloomberg]
∙ Jobless Rates Rise in 26 U.S. States; California’s Hits 11.9% [Bloomberg]

Posted by socketadmin at 8:45 AM | Permalink | Comments (9) | (email story)

August 20, 2009

New Subprime Foreclosures Ease But Prime Foreclosures Exacerbate

From Bloomberg:

Americans fell behind on their mortgage payments at a record pace in the second quarter as job losses and falling real estate prices thwarted government efforts to stabilize the housing market.

The share of loans with one or more payments overdue rose to a seasonally adjusted 9.24 percent of all mortgages, an all- time high, from 9.12 percent in the first quarter, the Mortgage Bankers Association said in a report today. The inventory of homes in foreclosure increased to 4.3 percent, the most in three decades of data, and loans overdue by at least 90 days, the point at which foreclosure proceedings typically begin, rose to 7.97 percent, the highest on record.

“We’ve seen a significant drop in the problem with subprime loans and we’ve moved now to a problem with prime fixed-rate loans,” Jay Brinkmann, the Washington-based trade group’s chief economist, said in an interview. “Job losses are driving it, and we expect that to continue into next year.”

∙ Mortgage Delinquencies Rise to Record as U.S. Home Prices Fall [Bloomberg]

Posted by socketadmin at 7:45 AM | Permalink | Comments (13) | (email story)

August 17, 2009

Shacking Up In San Francisco To Save Some Shekels

"Facing layoffs, pay cuts and furloughs, more people have turned to shared housing to help make ends meet. Craigslist, the online classified ad giant, says that its roommate-wanted postings over the past 12 months are up...85 percent within San Francisco."

∙ More share space to shave costs in recession [SFGate]

Posted by socketadmin at 7:00 AM | Permalink | Comments (17) | (email story)

August 12, 2009

San Francisco Listed Sales Volume In July: Down 13% YOY

While sales volume for listed single-family homes in San Francisco gained 2% on a year-over-year basis in July, condo sales volume fell 28.5% (228 transactions in July 2008 versus 163 in 2009), up 16% from June versus a 27% increase from June to July in 2008.

Combined listed single-family and condo sales volume dropped 13% YOY in July.

With respect to condos, the most pronounced drop in listed sales volume occurred in District 9, dropping 34% (from 88 sales in July of 2008 to 54 sales in July of 2009) on a 23% drop in median sales price from $749,500 to $577,500. Once again, think (and either thank or curse) new development sales offices discounting and stealing share.

Listed condo sales volume in District 5 dropped from 36 to 30 sales year-over-year in July on a 17% drop in median sales price and an 18% drop in average.

∙ Condos and Lofts July ‘04, ‘06, ‘08, ‘09 [sanfranciscoschtuff.com]
∙ Listed San Francisco Single-Family Home Sales In July: Up 2% YOY [SocketSite]
∙ San Francisco Listed Sales Volume In June: Down 14% YOY [SocketSite]
∙ San Francisco Real Estate Districts: Maps And Neighborhoods [SocketSite]

Posted by socketadmin at 5:45 AM | Permalink | Comments (35) | (email story)

August 4, 2009

Listed San Francisco Single-Family Home Sales In July: Up 2% YOY

Sales volume for listed single-family homes in San Francisco gained a nominal 2% on a year-over-year basis in July (218 transactions in 2008 versus 223 in 2009), up 9% versus June and versus flat from June to July in 2008 according to San Francisco Schtuff.

The most significant gain in listed single-family home sales volume occurred in District 5, up 41% on a year-over-year basis (from 32 in 2008 to 45 in 2009) but on a 21% drop in median sales price (a 26% drop in average).

On the other hand, listed single-family home sales volume in District 4 fell 42% on a year-over-year basis (from 33 in 2008 to 19 in 2009) on almost no change in median sales price but a 12% drop in average.

∙ Single Family Homes July ‘04, ‘06, ‘08, ‘09 [sanfranciscoschtuff.com]
∙ Listed San Francisco Single-Family Home June Sales: Down 6% YOY [SocketSite]
∙ San Francisco Real Estate Districts: Maps And Neighborhoods [SocketSite]

Posted by socketadmin at 1:45 PM | Permalink | Comments (52) | (email story)

Add A Garage Condo Apartment (Or Two): 1810-1812 Pacific Avenue

Yesterday we saw the "rent to own" posts coming when the listings for 1810 and 1812 Pacific were withdrawn from the MLS. Little did we know they were actually already here.

∙ $7200 / 3br - GORGEOUS New Construction 3-level Townhome [Criagslist]
∙ Add A Garage Condo (Or Two): 1810-1812 Pacific Avenue [SocketSite]

Posted by socketadmin at 1:30 PM | Permalink | Comments (19) | (email story)

U.S. Pending Home Resales Up, U.S. Personal Incomes Down

Pending sales of existing U.S. homes are up while personal incomes are down. As previously outlined, locally a lot will likely come down to (un)employment.

∙ Pending Sales of Existing Homes in U.S. Surge 3.6% [Bloomberg]
∙ U.S. Incomes Fall 1.3%, Biggest Drop in Four Years [Bloomberg]
∙ San Francisco County Unemployment Jumps To 9.8 Percent In June [SocketSite]

Posted by socketadmin at 11:30 AM | Permalink | Comments (4) | (email story)

August 3, 2009

San Francisco’s Commercial Sublease Snapshot

According to Colliers International, 2,454,475 square feet of commercial sublease space is currently on the market in San Francisco (54% of which is currently vacant), down a net 148,911 square feet over the past 30 days driven by withdrawn listings rather than newly signed subleases of which there was only one in July (for a total of 4,460 square feet).

Posted by socketadmin at 10:00 AM | Permalink | Comments (3) | (email story)

SocketSite's San Francisco Listed Housing Inventory Update: 8/03/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco declined 6.4% over the past two weeks (versus an average drop of 1.3% for the same two week period over the previous three years) and is now running just 1.3% higher on a year-over-year basis (down 12.6% for single-family homes, up 11.7% for condos/TICs) and 5.3% higher than at the same point in 2006.

Roughly 37% of active listings in San Francisco having undergone at least once price reduction with the percentage of active listings that are currently either already bank owned or seeking a short sale hovering around 12%. Expect listed inventory to continue to decline through the rest of summer and then spike in late September.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Inventory Update: 7/13/09 [SocketSite]

Posted by socketadmin at 7:45 AM | Permalink | Comments (33) | (email story)

July 29, 2009

Beige Book Results: Real Estate and Construction Remain Weak

The Real Estate and Construction summary from the latest Federal Reserve regional business survey (a.k.a. The Beige Book) for the twelfth district ("San Francisco"):

Conditions in District housing markets remained very weak but showed further signs of improvement, while demand for commercial real estate continued to erode. Sales prices for new and existing homes fell further in most parts of the District, and home construction activity remained at very low levels. Combined with low mortgage rates, however, price declines have propelled a sustained pickup in the pace of home sales in many areas.

Demand for commercial real estate fell further, and with rising vacancy rates, tenants have successfully been requesting rent concessions and other new terms on existing leases. Construction activity for commercial properties also continued to fall, and contacts noted that a lack of available credit remained a constraint for construction activity and investment transactions in some areas.

To summarize the summary, residential sales volume is up on falling prices and commercial is getting squeezed. Nothing that should catch a plugged-in person by surprise.

∙ Federal Reserve: Beige Book Twelfth District Summary (7/29/09) [federalreserve.gov]

Posted by socketadmin at 12:30 PM | Permalink | Comments (26) | (email story)

July 28, 2009

May S&P/Case-Shiller: San Francisco MSA Top Tier Up, Bottom Down

According to the May 2009 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA gained 1.4% from April ’09 to May '09, down 26.1% year-over-year and down 45.0% from a peak in May 2006.

For the broader 10-City composite (CSXR), home values gained 0.4% from April to May but are down 33.3% from a peak in June 2006 (down 16.8% year-over-year).

As of May 2009, average home prices across the United States are at similar levels to where they were in the middle of 2003, indicating that the three years of appreciation that occurred from 2003-2006 were all given back in the following three years. From the peak in the second quarter of 2006, the 10-City Composite is down 33.3% and the 20-City Composite is down 32.3%.

San Francisco MSA single-family home prices continued to fall across the bottom one-third in terms of price tiers but showed gains at the top.

The bottom third (under $266,630 at the time of acquisition) fell 0.5% from April to May (down 33.3% YOY); the middle third gained 1.0% from April to May (down 18.2% YOY); and the top third (over $485,728 at the time of acquisition) gained 3.8% from April to May (down 19.6% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have retreated to March 2000 levels having fallen 62% from a peak in August 2006, the middle third is hovering around March 2002 levels having fallen 42% from a peak in May 2006, and the top third is back to November 2003 levels having fallen 28% from a peak in August 2007.

Condo values in the San Francisco MSA gained 2.3% from April ’09 to May '09, down 24.7% on a year-over-year basis and down 31.0% from an October 2005 high.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).

∙ Home Price Declines Continue to Abate In May According to S&P/Case-Shiller [S&P]
∙ April S&P/Case-Shiller: San Francisco MSA Top Tier Flatish, Others Fall [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (106) | (email story)

July 23, 2009

Actual San Francisco Foreclosures Up 34.7% QOQ (Down 3.5% YOY)

Bay Area Notices of Default (NODs) in the second quarter of 2009 rose 7.3% on a year-over-year basis, up 40.9% in San Francisco proper (from 418 to 589). NOD activity in San Francisco increased 3.5% from the first to second quarter.

Actual Bay Area foreclosures in the second quarter fell 25.4% on a year-over-year basis (from 9,293 to 6,929) with Contra Costa (down 30.9% to 2,048), Alameda (down 18.4% to 1,466) and Santa Clara (down 22.4% to 1,210) leading the way with respect to volume.

Second quarter recorded foreclosures in San Francisco totaled 136, down 3.5% on a year-over-year basis but up 34.7% (35 homes) from the first quarter 2009. Expect San Francisco foreclosures to rise dramatically over the next few of quarters as moratorium delayed NODs work their way through the system.

∙ California Second Quarter Mortgage Defaults Edge Down [DataQuick]
∙ Actual Q1 San Francisco Foreclosures Fall But Notices Of Default Spike [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (52) | (email story)

July 17, 2009

San Francisco County Unemployment Jumps To 9.8 Percent In June

Preliminary June labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 9.8%, 8.0% and 8.9% respectively, up 0.7 percentage points for San Francisco and up 0.5 percentage points Marin and San Mateo in May.

The 9.8% unemployment rate for San Francisco in June represents a new 25 year high.

The number of unemployed in San Francisco increased by 3,300 from 40,800 to 44,100 in June while the number of employed fell by 1,300 (from 407,100 to 405,800) as the labor force increased by 1,900 (from 448,000 to 449,900), a net loss of 5,100 over the past three months.

∙ Monthly Labor Force Data for Counties: June 2009 (Preliminary) [EDD]
∙ San Francisco County Unemployment Up To 9.1 Percent In May '09 [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (21) | (email story)

San Francisco Recorded Sales Activity In June: Down 1.8% YOY

According to DataQuick, recorded home sales volume in San Francisco fell just 1.8% on a year-over-year basis last month (561 recorded sales in June ’09 versus 571 sales in June ‘08) and rose 12.7% compared to the month prior. The difference between recorded and listed sales activity speaks to a spike in unlisted closings, generally new construction or bank-owned sales that we'll once again characterize as being driven by discounting.

San Francisco was only one of two Bay Area counties to record a year-over-year decline in sales volume in June with Napa recording a 4.4% decline. San Francisco's median sales price in June was $635,000, down 12.6% compared to June ’08 ($726,750) and up a nominal 0.2% compared to the month prior.

For the greater Bay Area, recorded sales volume in June was up 20.4% on a year-over-year basis and up 16.1% from the month prior (8,644 recorded sales in June '09 versus 7,178 in June ’08 and 7,447 in May '09), while the recorded median sales price fell 27.4% on a year-over-year basis, up 3.1% compared to the month prior (the third uptick in 18 months).

Last month 37.3 percent of all homes resold in the Bay Area had been foreclosed on in the prior 12 months, down from 40.5 percent in May and the lowest since 36.0 percent in August 2008. The peak was 52.0 percent in February this year. By county, foreclosure resales ranged last month from 6.3 percent of all resales in Marin to 62.7 percent in Solano.

Use of government-insured FHA loans – a common choice among first-time buyers – represented 24.1 percent of all Bay Area purchase loans in June, down from a record 26 percent in April but up from 10.7 percent a year ago.

At the extreme, Solano recorded a 66.5% year-over-year increase in sales volume (a gain of 340 transactions) on a 38.3% drop in median sales price.

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

∙ Bay Area home sales and median price rise [DQnews]
∙ San Francisco Recorded Sales Activity In May: Down 16.0% YOY [SocketSite]
∙ San Francisco Listed Sales Volume In June: Down 14% YOY [SocketSite]
∙ Infinity Sales Update: New Contracts Up But Driven By Discounts [SocketSite]

Posted by socketadmin at 12:00 AM | Permalink | Comments (16) | (email story)

July 16, 2009

San Francisco Real Estate Barometer: Three Negatives And A Neutral

According to San Francisco’s latest Economic Barometer, the average asking rent for one-bedrooms in the city fell 6.3% from April to May and is down 15.4% year-over-year while the commercial average asking lease rate has fallen 30.6% year-over-year.

The City’s five-year position for Median Home Sales Price (currently "neutral") and Commercial Average Asking Lease Rate (currently "negative"): "weak" on rising unemployment.

∙ San Francisco Monthly Economic Barometer - May 2009 [SFGov]
∙ San Francisco County Unemployment Up To 9.1 Percent In May '09 [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (13) | (email story)

July 14, 2009

Ten Below Over Freezing. Except For That One At Twenty-Nine...

If you read Bloomberg yesterday you learned that the past three Decorator Showcase homes in San Francisco are on the market, and that this year’s showcase (2830 Pacific) "was listed at $12.9 million in April and the price was reduced in May."

“Things reached a fever pitch two years ago when people thought they could do no wrong in real estate,” said Malin Giddings, co-listing agent for this year’s seven-bedroom, six- bathroom home. “Now the game is over.”

You were also told that the "last time a house in San Francisco fetched at least $10 million was in June 2008, according to the city assessor-recorder office."

Of course plugged-in people know that 2830 Pacific was actually asking $15,500,000 before being listed in April (and then reduced in May), and that it’s more like six out of the past ten showcase homes that are struggling to find buyers.

Oh, and 2799 Broadway (A.K.A. 37 Raycliff Terrace) sold for $29 million in September 2008. But hey, who are we to quibble with Bloomberg.

∙ Mansion Glut in Pelosi’s San Francisco Neighborhood Slows Sales [Bloomberg]
∙ Another Ex-Decorator Showcase Is Officially Listed: 2500 Divisadero [SocketSite]
∙ 2009 Decorator Showcase (2830 Pacific) Opens Its Doors And Kimono [SocketSite]
∙ Showcasing A Designer Price Cut: 2830 Pacific Sheds Another 29% [SocketSite]
∙ The SocketSite Scoop On 37 Raycliff Terrace (A.K.A. 2799 Broadway) [SocketSite]

Posted by socketadmin at 11:30 AM | Permalink | Comments (4) | (email story)

July 13, 2009

San Francisco's Office Availability Rate Up To 20 Percent In Q2 2009

"CBRE says that downtown San Francisco’s availability rate for office space has now cracked 20 percent. It predicts that the city “will soon pass its all-time availability rate of 20.6 percent.” The brokerage reports that the city saw a 778,000-square-foot net vacant increase in vacant space [in Q2]."

∙ Office space availability tops 20 percent mark [San Francisco Business Times]

Posted by socketadmin at 8:00 AM | Permalink | Comments (12) | (email story)

SocketSite's San Francisco Listed Housing Inventory Update: 7/13/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco declined 3.1% over the past two weeks (versus an average gain of 4.3% for the same two week period over the previous three years and a 0.3% drop in 2008) and is now running 6.7% higher on a year-over-year basis (down 4.1% for single-family homes, up 14.5% for condos/TICs) and 11.3% higher than at the same point in 2006.

The drop in inventory is being driven by both sales (down 14% YOY in June) and a seasonal withdrawing of listings, with just under 38% of active listings in San Francisco having undergone at least once price reduction (up from just over 32% at the same time last year). The percentage of active listings in San Francisco that are currently either already bank owned or seeking a short sale remains at just over 13%.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Inventory Update: 6/29/09 [SocketSite]
∙ San Francisco Listed Sales Volume In June: Down 14% YOY [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (39) | (email story)

July 9, 2009

San Francisco Listed Sales Volume In June: Down 14% YOY

While sales volume for listed single-family homes in San Francisco fell 6% on a year-over-year basis in June, condo sales volume fell 22% (180 transactions in June 2008 versus 140 in 2009), up 27% from May and versus a 14% drop over the same period in 2008.

Combined listed single-family and condo sales volume dropped 14% YOY in June.

With respect to condos, the most pronounced drop in listed sales volume occurred in District 9, dropping 36% (from 64 sales in June of 2008 to 41 sales in June of 2009) on a 23% drop in median sales price from $769,500 to $595,000. Think (and either thank or curse) new development sales offices discounting and stealing share.

∙ Condos and Lofts June ‘04, ‘06, ‘08, ‘09 [sanfranciscoschtuff.com]
∙ Listed San Francisco Single-Family Home June Sales: Down 6% YOY [SocketSite]
∙ San Francisco Listed Sales Volume In May: Down 37% YOY [SocketSite]
∙ San Francisco Real Estate Districts: Maps And Neighborhoods [SocketSite]

Posted by socketadmin at 9:30 AM | Permalink | Comments (11) | (email story)

July 8, 2009

PMI’s Market Risk Index Report: 1st Quarter 2009

According to the latest PMI Market Risk Index, the San Francisco-San Mateo-Redwood City MSAD ended the first quarter of 2009 with a 66.2% likelihood of house price declines over the next two years, up from 31.6% in the fourth quarter of 2008, up from 30.2% in the fourth quarter of 2007, and up from 39.5% at the beginning of 2005.

The likelihood of decline for a few other nearby areas: Sacramento-Arden-Arcade-Roseville (99.9%), Oakland-Fremont-Hayward (96.4%), San Jose-Sunnyvale-Santa Clara (78.4%).

Keep in mind that 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: 2nd Quarter 2009 [PMI Group]
∙ PMI’s Market Risk Index And Real Estate Trends Report: Spring 2008 [SocketSite]
∙ Economic And Real Estate Trends: Spring 2005 [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (26) | (email story)

July 7, 2009

Listed San Francisco Single-Family Home June Sales: Down 6% YOY

Sales volume for listed single-family homes in San Francisco fell 6% on a year-over-year basis in June (219 transactions in 2008 versus 205 in 2009), up 19% versus May (and versus a 6% drop from May to June in 2008) according to San Francisco Schtuff.

Listed single-family home sales in "Prime" District 7 nearly doubled on a year-over-year basis (from 10 in 2008 to 17 in 2009), but on a 43% drop in median sales price (a 48% drop in average).

∙ Single Family Homes June ‘04, ‘06, ‘08, ‘09 [sanfranciscoschtuff.com]
∙ San Francisco Listed Sales Volume In May: Down 37% YOY [SocketSite]
∙ San Francisco Real Estate Districts: Maps And Neighborhoods [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (15) | (email story)

July 6, 2009

QuickLinks: Thank Goodness That Foreclosure Crisis Is Over…

∙ New Evidence on the Foreclosure Crisis [WSJ]
∙ Another wave of foreclosures is poised to strike [LA Times]
∙ A New All-Time High (Or Rather Low) For U.S. Prime Delinquencies [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (6) | (email story)

July 1, 2009

San Francisco Retail Space Update: Vacancy Rate Up Four-ish Fold

According to Colliers International retail broker Ross Portugeis, "San Francisco’s retail vacancy rate leaped in the past year from 3 or 4 percent to 12 or 13 percent" but Portugeis feels the market started stabilizing in May. As always, time and SocketSite will tell.

And according to Edward Plant of Edward Plant Co. Inc. which specializes in leasing San Francisco retail space, the strongest markets/streets currently include Chestnut, Castro and Hayes, while the weakest include Union, Fillmore and Valencia.

No mention of the numerous still vacant retail spaces in new developments across town.

∙ Empty stores boost lease deals [San Francisco Examiner]

Posted by socketadmin at 8:15 AM | Permalink | Comments (5) | (email story)

June 30, 2009

A New All-Time High (Or Rather Low) For U.S. Prime Delinquencies

The delinquency rate for prime mortgages over 60 days behind continued to climb from 2.4% in the fourth quarter of 2008 to 2.9% through March 31, 2009 (up from 1.1% at the same point in 2008) as "first-time foreclosure filings on [prime] loans rose 22 percent from the fourth quarter."

The delinquency rate for prime mortgages in the U.S. has hit a new all-time high (or perhaps low). And overall, "mortgages 60 days or more past due rose 88 percent from last year." You know, when it was simply a subprime problem.

∙ U.S. Prime Delinquency Rate Doubles, Alt-A Approaches 10% [SocketSite]
∙ Delinquencies Double on Least-Risky Loans, U.S. Says [Bloomberg]

Posted by socketadmin at 11:00 AM | Permalink | Comments (13) | (email story)

April S&P/Case-Shiller: San Francisco MSA Top Tier Flatish, Others Fall

According to the April 2009 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA gained 0.6% from March ’09 to April '09, down 28.0% year-over-year and down 45.8% from a peak in May 2006.

For the broader 10-City composite (CSXR), home values fell 0.7% from March to April and are down 33.6% from a peak in June 2006 (down 18.0% year-over-year).

In addition to the 10-City and 20-City Composites, 13 of the 20 metro areas also saw improvement in their annual return compared to that of March. Furthermore, every metro area, except for Charlotte, recorded an improvement in monthly returns over March. While one month’s data cannot determine if a turnaround has begun; it seems that some stabilization may be appearing in some of the regions. We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here.

San Francisco MSA single-family home prices continued to fall across the bottom two-thirds in terms of price tiers, but gained nominally at the top.

The bottom third (under $265,194 at the time of acquisition) fell 1.8% from March to April (down 35.4% YOY); the middle third fell 0.7% from March to April (down 19.5% YOY); and the top third (over $479,157 at the time of acquisition) gained 0.2% from March to April (down 21.9% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have retreated below April 2000 levels having fallen 62% from a peak in August 2006, the middle third has fallen to November 2001 levels having fallen 42% from a peak in May 2006, and the top third is holding at April 2003 levels having fallen 30% from a peak in August 2007.

Condo values in the San Francisco MSA gained 0.3% from March ’09 to April '09, down 26.9% on a year-over-year basis and down 32.5% from an October 2005 high.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).

∙ The Pace of Home Price Declines Moderate in April According to S&P/Case-Shiller [S&P]
∙ March S&P/Case-Shiller: San Francisco Slide Slows But Continues Fall [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (65) | (email story)

June 29, 2009

SocketSite's San Francisco Listed Housing Inventory Update: 6/29/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco declined 0.7% over the past two weeks (versus an average drop of 2.6% for the same two week period over the previous three years) and is now running 9.8% higher on a year-over-year basis (down 0.5% for single-family homes and up 16.9% for condos/TICs) and 24.4% higher than at the same point in 2006.

Just under 39% of active listings in San Francisco have undergone at least once price reduction (up from just over 32% at the same time last year). And just over 12% of active listings in San Francisco are currently either already bank owned or seeking a short sale.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Inventory Update: 6/15/09 [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (12) | (email story)

Past Performance Recoveries Are No Guarantee Of Future Results

"The residential real estate market improved ahead of the end of the past seven contractions, with home construction starts beginning to climb an average of seven months before gross domestic product picked up and sales gaining about four months in advance, according to data compiled by David Berson, chief economist of PMI Group, a mortgage insurer in Walnut Creek, California."

∙ Housing in Peril as Obama Fails to Get Financing Breakthrough [Bloomberg]

Posted by socketadmin at 8:00 AM | Permalink | Comments (2) | (email story)

June 23, 2009

QuickLinks: A Foreclosure Triptych

∙ Home Resales in U.S. Rise 2.4% in May to 4.77M Rate Amid Foreclosures [Bloomberg]
∙ U.S. Home Prices Drop 6.8 Percent in April as Foreclosures Rise [Bloomberg]
∙ Housing Eludes Recovery as Job Losses, Foreclosures Climb [Bloomberg]

Posted by socketadmin at 7:30 AM | Permalink | Comments (3) | (email story)

June 19, 2009

San Francisco County Unemployment Up To 9.1 Percent In May '09

Preliminary May labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 9.1%, 7.5% and 8.4% respectively, up 0.3 percentage points from April across the board.

The 9.1% unemploment rate for San Francisco in May represents a new 25 year high.

Extending the observations of a plugged-in reader last month, the number of unemployed in San Francisco increased by 1,000 from 39,800 to 40,800 in May while the number of employed fell by 5,800 (from 412,900 to 407,100) as the labor force fell by 4,800 (from 452,800 to 448,000), a loss of 7,000 over the past two months.

∙ Monthly Labor Force Data for Counties: May 2009 (Preliminary) [EDD]
∙ San Francisco County Unemployment Dips To 8.8 Percent In April '09 [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (44) | (email story)

June 18, 2009

San Francisco Recorded Sales Activity In May: Down 16.0% YOY

According to DataQuick, recorded home sales volume in San Francisco fell 16.0% on a year-over-year basis last month (498 recorded sales in May ’09 versus 593 sales in May ‘08) but rose 23.9% compared to the month prior. The difference between recorded and listed sales activity speaks to a spike in unlisted closings, up 46% YOY and generally new construction or bank-owned sales that we'll once again characterize as being driven by discounting.

San Francisco continued to experience the sharpest year-over-year decline in sales volume of any Bay Area county in May with Marin the only other county recording a decline (-2.7%). San Francisco's median sales price in May was $634,000, down 19.7% compared to May ’08 ($790,000) but up a nominal 0.9% compared to the month prior.

For the greater Bay Area, recorded sales volume in May was up 19.8% on a year-over-year basis and up 4.3% from the month prior (7,447 recorded sales in May '09 versus 6,216 in May ’08 and 7,139 in April '09), while the recorded median sales price fell 33.9% on a year-over-year basis, up 12.3% compared to the month prior (the second uptick in 18 months).

Last month 42.1 percent of all homes resold in the Bay Area had been foreclosed on in the prior 12 months, down from 46.4 percent in April and the lowest since the figure was 41.6 percent last September. A year ago the percentage was 27.7 percent, while the peak was 52.0 percent this February. By county, foreclosure resales ranged last month from 7.7 percent of all resales in San Francisco to 65.1 percent in Solano.

The use of government-insured FHA loans – a common choice among first-time buyers – represented a 24.5 percent of all Bay Area purchase loans in May, down slightly from a record of 26.0 percent in April but up from 7.3 percent a year ago.

At the extremes, Solano recorded a 51.8% year-over-year increase in sales volume (a gain of 241 transactions) on a 36.8% drop in median sales price, while Contra Costa recorded a 40.5% year-over-year increase in sales volume on a 39.9% drop in median sales price.

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

∙ Uptick in Bay Area home sales and median price [DQnews]
∙ San Francisco Recorded Sales Activity In April: Down 33.6% YOY [SocketSite]
∙ San Francisco Listed Sales Volume In May: Down 37% YOY [SocketSite]
∙ Infinity Sales Update: New Contracts Up But Driven By Discounts [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (13) | (email story)

June 17, 2009

Marcus & Millichap Changes Their San Francisco 2009 Rental Outlook

As we wrote in January:

The Marcus & Millichap rental outlook for 2009 in San Francisco: rents up 3.3% on 400 new units in professionally managed apartment buildings with at least 20 units.

Our comment (at the risking of stealing a bit of our own outlook thunder): we believe Marcus & Millichap is significantly underestimating both the number and impact of "shadow” market units for rent in San Francisco (which they deem to be "barely a factor") as well as the effective number of new units for rent that will hit the market in 2009.

A new report from Marcus & Millichap, however, now calls for a 8.9% drop in residential rents in San Francisco by the end of the year, a dramatic 12.2 point swing in their forecast over the past six months. Our outlook and original rebuttal haven't changed.

UPDATE: A plugged-in reader adds:

There have been more drastic decreases in SOMA. I wanted to move there last year but asking rents were north of 3500 for 2bd/2ba in most complexes (avalon, bayside, archstone). I just rented the same 2bd/2ba for 2700 (2800 with parking) with a better layout and more sq footage.

That's a 23% drop (and some good shopping) for "somaboy," and a tough trend in terms of (E)arnings for investors who paid a high (P)rice based on wildly different expectations.

∙ Marcus & Millichap San Francisco Rental Outlook (And Quick Rebuttal) [SocketSite]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (76) | (email story)

June 15, 2009

Are The "Exceptions" (And Big Losses) Becoming A Palms Rule?

What some are wont to characterize as San Francisco "exceptions" are quickly becoming the rule for two-bedroom condo re-sales at The Palms (555 4th Street).

While #401 closed escrow with a reported contract price of $599,900 in January (purchased for $779,000 in October 2006), and #313 is still seeking a short sale at $599,900 (purchased for $800,000 in January 2007), the list price for #731 has been reduced to a "bank approved price" of $619,000 (purchased for $925,000 in August 2006).

555 4th Street #823 is currently in contract having been listed at $605,000 (purchased for $815,000 in January 2007). And the only other two-bedroom currently listed at The Palms is #309, purchased for $842,500 in September 2006 and currently seeking $670,000.

Once again, all two-bedroom condos with declines in value ranging from 23% to 33% since late 2006/early 2007. Of course that's assuming sales at list.

∙ Listing: 555 4th Street #309 (2/2) 1,113 sqft - $670,000 [MLS]
∙ Listing: 555 4th Street #313 (2/2) 1,111 sqft - $599,900 [MLS]
∙ Listing: 555 4th Street #731 (2/2) 1,052 sqft - $619,000 [MLS]
∙ Pushing Forward With Price Discovery At The Palms (555 4th Street) [SocketSite]
∙ A SoMa/Palms Wake Up Call (And Apple): 555 4th Street #401 [SocketSite]

Posted by socketadmin at 3:30 PM | Permalink | Comments (66) | (email story)

SocketSite's San Francisco Listed Housing Inventory Update: 6/15/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco declined 1.9% over the past two weeks (versus an average increase of 8.5% for the same two week period over the previous three years) and is now running 9.0% higher on a year-over-year basis (down 4.2% for single-family homes and up 18.1% for condos/TICs) and 22.7% higher than at the same point in 2006.

At the same time, listed sales activity has fallen by 37% on a year-over-year basis with the effective mid-June months of inventory based on sales velocity in May rising roughly 72% on a year-over-year basis from 3.4 months in 2008 to 5.8 months in 2009, and up 108% from 2.8 months in 2006.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Inventory Update: 6/01/09 [SocketSite]
∙ San Francisco Listed Sales Volume In May: Down 37% YOY [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (33) | (email story)

June 12, 2009

JustQuotes: It's A Good Time To Be A New Tenant In San Francisco

"Tenant-starved San Francisco office landlords are laying on the concessions. A new report from the tenant brokerage Studley shows property owners are now shelling out an average of $45 per square foot in concessions to tenants willing to ink a long-term deal. The amount of free rent owners are doling out has jumped to seven months, while tenant improvement allowances are now averaging $50 a square foot. Studley says asking rents are down 30 to 50 percent in many buildings and tenant demand is off 40 percent. Average Class A asking rent is $34.74 a square foot, down 25.3 percent from last year..."

∙ S.F. landlords entice tenants with concessions [San Francisco Business Times]

Posted by socketadmin at 9:00 AM | Permalink | Comments (10) | (email story)

June 11, 2009

Mortgage Rates Continue To Climb (And It's All The Russians' Fault)

The average 30-year U.S. mortgage rate bumped up 30 basis points over the past week to 5.59 percent, a 68 basis point jump over the past two weeks. Of course we're kidding about it being all the Russians' fault, but they do come into play.

∙ Mortgage Rates in U.S. Rise to Highest Since November [Bloomberg]
∙ A Six Month High For Mortgage Rates (But Still Historically Cheap) [SocketSite]
∙ BRICs Buy IMF Debt to Join Big Leagues, Goldman Says [Bloomberg]

Posted by socketadmin at 3:00 PM | Permalink | Comments (16) | (email story)

June 10, 2009

San Francisco Listed Sales Volume In May: Down 37% YOY

Sales volume for listed single-family homes and condos in San Francisco fell 37% on a year-over-year basis in May according to San Francisco Schtuff, with listed single-family home sales down 27% (235 transactions in 2008 versus 172 in 2009) and condo sales down 48% (210 transactions in 2008 versus 110 in 2009).

The biggest drops in sales volume occurred in Districts 8 (down 55%), 5 (down 43%) and 2 (down 43%). Not a single district (nope, not even the much maligned but now suddenly "real" 10) recorded a year-over-year sales "rebound."

Tomorrow Monday, the medians.

UPDATE (6/11): In case you don't know your Districts: San Francisco Real Estate Districts: Maps And Neighborhoods.

∙ Single Family Homes May 2004 v. 2006 v. 2008 v. 2009 [SFSchtuff]
∙ Condo and Loft Sales May 2004 v. 2006 v. 2008 v. 2009 [SFSchtuff]
∙ No Rebound For You! (In Fact A Below Average Seasonality Bump) [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (62) | (email story)

June 8, 2009

A Few More Numbers For The Most Recent Lembi Twelve

Some additional numbers on the twelve properties the Lembis put on the market in May:

Lembi hopes to generate $43 million in revenue from the disposition, which equates to approximately $185,000 per unit, approximately 50% of replacement cost and a significant discount to what it paid to acquire the properties.

The buildings may sell as a group or individually. Most were constructed in the first quarter of the 21st century and a few were built in the 1960s. The per-unit prices range from $320,000 to $100,000. Most of the projected cap rates on the buildings are in the 5% range and are based on scheduled income and a 3% vacancy factor. Much of the interest so far has been local buyers each looking to purchase one or two properties, according to local sources.

The sales will be watched closely by the market because only one other comparable property has sold in San Francisco this year, according to Real Capital Analytics. The property was Empire, a 40-unit, four-story property built in 1907 at 1040 Leavenworth Street. The property sold for $5.8 million or $145,000 per unit; the pro forma cap rate was 4.7%. All of the Lembi properties are said to be of higher quality.

According to MPF Research, San Francisco rents dropped 5.2% in the first quarter of 2009.

∙ Lembi Group Puts 12 Apartment Assets up for Sale [CityFeet]
∙ Lembis Look To Cut Another Twelve Loose As Rental Market Drops [SocketSite]

Posted by socketadmin at 8:15 AM | Permalink | Comments (65) | (email story)

June 5, 2009

If You're Looking To Renovate Or Rewire In San Francisco...

"Unemployment in San Francisco’s building trades sector is over 20 percent, with about 50 percent of unionized electricians out of work, according to San Francisco Building and Construction Trades Council President Mike Theriault.

With 16,000 members, that means that more than 3,200 building trades workers are currently without a job. Unemployment among laborers and carpenters is running at more than 20 percent, while iron workers have the lowest jobless rate -- about 10 percent."

Unemployment is over 20% for S.F. building sector [San Francisco Business Times]

Posted by socketadmin at 3:30 PM | Permalink | Comments (18) | (email story)

June 4, 2009

A Six Month High For Mortgage Rates (But Still Historically Cheap)

"Fixed U.S. mortgage rates jumped to the highest level this year, signaling the Federal Reserve’s plan to lower borrowing costs has stalled. The average 30-year rate rose to 5.29 from 4.91 percent a week earlier...The last time the rate was higher was Dec. 11, when it was 5.47 percent. The average 15-year rate rose to 4.79 percent from 4.53 percent."

∙ U.S. Mortgage Rates Jump to Highest Since December [Bloomberg]
∙ It's Like The Fed (And Taxpayers) Just Bought You A Couple Of Points [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (13) | (email story)

June 2, 2009

Pending U.S. Home Sales Up 3.2% YOY (Down 2.9% In The West)

The National Association of Realtors' Pending U.S. Home Sales Index rose rose 6.7 percent from March to April and is up 3.2 percent on a year-over-year basis. The bulk of the YOY gains have, however, occured in the Midwest with the West down 2.9 percent.

The Pending Home Sales Index in the Northeast shot up 32.6 percent to 78.9 in April and is 0.8 percent above a year ago. In the Midwest the index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008. The index in the South slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago. In the West the index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.

∙ Pending Home Sales Up for Three Months in a Row [NAR]

Posted by socketadmin at 8:30 AM | Permalink | Comments (15) | (email story)

June 1, 2009

SocketSite's San Francisco Listed Housing Inventory Update: 6/01/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco decreased a nominal 0.6% over the past three weeks (versus an average decrease of 1.2% for the same three week period over the previous three years) and is now running 10.4% higher on a year-over-year basis (down 6.3% for single-family homes and up 22.4% for condos/TICs) and 44.5% higher than at the same point in 2006.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Inventory Update: 5/11/09 [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (102) | (email story)

May 29, 2009

Lembis Look To Cut Another Twelve Loose As Rental Market Drops

"The troubled Lembi real estate empire has put 12 San Francisco apartment buildings up for sale at prices well below what it paid for the properties in 2006 and 2007."

"The buildings the family is attempting to sell include 2185 Bay St., a 24-unit complex the Lembis bought in late 2007 for $7.9 million. The asking price on the building is $5.9 million. Another building, 1305 Lombard St. sold for $2.6 million in 2007 and is priced at $1.9 million. A third property, the 14-unit 2050 Powell St., sold for $3.4 million in 2006 and is priced at $2.9 million."

"David Gruber, who owns 13 multifamily buildings in San Francisco, said rents have dropped 10 percent to 15 percent, and he is seeing an increase in requests for rent adjustments."

∙ Lembis expect to sell apartment buildings for loss [Business Times]
∙ San Francisco Rental Market Weakness: SocketSite Readers Report [SocketSite]
∙ RealFacts Reports (Not So Real) Asking Rents Flat In San Francisco [SocketSite]

Posted by socketadmin at 11:15 AM | Permalink | Comments (23) | (email story)

May 26, 2009

March S&P/Case-Shiller: San Francisco Slide Slows But Continues Fall

According to the March 2009 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 2.2% from February ’09 to March '09, down 30.1% year-over-year and down 46.1% from a peak in May 2006.

For the broader 10-City composite (CSXR), home values fell 2.1% from February to March and are down 33.1% from a peak in June 2006 (down 18.6% year-over-year).

On a positive note, nine of MSAs are reporting a relative improvement in year-over-year returns and nine of the 20 metro areas saw an improvement in their monthly returns compared to February. Furthermore, this is the second month since October 2007 where the 10- and 20-City Composites did not post a record annual decline. Based on the March data, however, we see no evidence that that a recovery in home prices has begun.

San Francisco MSA single-family home prices continued to fall across all three price tiers.

The bottom third (under $268,429 at the time of acquisition) fell 4.6% from February to March (down 37.3% YOY); the middle third fell 2.5% from February to March (down 20.8% YOY); and the top third (over $481,916 at the time of acquisition) fell 3.5% from February to March (down 22.2% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have retreated to April 2000 levels having fallen 61% from a peak in August 2006, the middle third has fallen below March 2002 levels having fallen 42% from a peak in May 2006, and the top third has fallen to April 2003 levels having fallen 30% from a peak in August 2007.

Condo values in the San Francisco MSA fell 6.0% from February ’09 to March '09 (over three times the average of New York, Boston, Chicago and Los Angeles), down 27.3% on a year-over-year basis and down 32.7% from an October 2005 high.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).

∙ The Pace of the Decline in Residential Real Estate Prices Slowed in February [S&P]
∙ February S&P/Case-Shiller: San Francisco MSA Continues Slide [SocketSite]

Posted by socketadmin at 6:15 AM | Permalink | Comments (81) | (email story)

May 22, 2009

San Francisco County Unemployment Dips To 8.8 Percent In April '09

Preliminary April labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 8.8%, 7.2% and 8.1% respectively, down 0.2 percentage points from March across the board.

The 9.0% unemploment rate for San Francisco in March represented a 25 year high.

UPDATE: A plugged-in reader adds:

There is an interesting detail on the SF numbers. The number of unemployed in SF fell by 1000 from 40,800 to 39,800. But the number of employed fell by 1300 from 414,200 to 412,900. And the number in the "labor force" fell by 2800, from 455,000 to 452,800.

Looks like a few thousand workers packed up and left SF last month. Re the housing market, easing unemployment would certainly be good, but a smaller workforce would not.

∙ Monthly Labor Force Data for Counties: April 2009 (Preliminary) [EDD]
∙ San Francisco County Unemployment Hits 9.0 Percent In March [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (15) | (email story)

May 21, 2009

San Francisco Recorded Sales Activity In April: Down 33.6% YOY

According to DataQuick, recorded home sales volume in San Francisco fell 33.6% on a year-over-year basis last month (402 recorded sales in April ’09 versus 605 sales in April ‘08) but rose 21.1% compared to the prior month (which seasonality would foretell).

San Francisco continued to experience the sharpest year-over-year decline in sales volume of any Bay Area county in April with San Mateo (-22.5%) and Marin (-19.4%) the only other counties recording declines. San Francisco's median sales price in April was $628,500, down 16.2% compared to April ’08 ($750,000) but up 3.4% compared to the month prior.

For the greater Bay Area, recorded sales volume in April was up 13.1% on a year-over-year basis (a sharp decline from the 32.6% average YOY gain of the past seven months) and up 12.9% from the month prior (7,139 recorded sales in April '09 versus 6,310 in April ’08 and 6,325 in March '09), while the recorded median sales price fell 41.3% on a year-over-year basis, up 4.8% compared to the month prior (the first uptick in 17 months).

Last month’s sales were the second-lowest for an April since 1995 and were 23.2 percent below the average April sales total back to 1988, when DataQuick’s statistics begin.

Foreclosure resales – homes sold in April that had been foreclosed on in the prior 12 months – accounted for 47.4 percent of Bay Area resales. That was down from 50.2 percent in March and 52.0 percent in February. Last month’s figure was the lowest since foreclosure resales were 46.8 percent of existing home sales last November.

A lower concentration of discounted foreclosure resales in the statistics is one reason the median sale price has recently begun to more or less flatten, or at least erode more slowly, in many markets.

At the extreme, Solano recorded a 67.1% year-over-year increase in sales volume (a gain of 288 transactions) on a 43.7% drop in median sales price.

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

∙ Bay Area home sales rise again; median price up slightly over March [DQnews]
∙ San Francisco Recorded Sales Activity In March: Down 34.6% YOY [SocketSite]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]

Posted by socketadmin at 11:20 AM | Permalink | Comments (45) | (email story)

May 19, 2009

Call It Yet Another "Anecdote" (Or Data Point), It’s Down From 2004

As we wrote in February:

Purchased for $2,000,000 in June of 2004, 2203 Broderick in the heart of Pacific Heights returned to the market with a remodeled bath in October of 2008 asking $2,395,000. Reduced to $2,195,000 in November, and now asking $1,975,000 as of nine days ago.

A sale at asking would represent zero appreciation over the past four and one-half years. But do avoid the temptation to see that as "prices in Pacific Heights have been holding steady since 2004" versus having risen and are now falling since.

Temptation avoided as the single-family 2203 Broderick (with expansion potential) closed escrow on 5/12/2009 with a reported contract price of $1,750,000. That's 12.5% under its sale price in 2004 (which was well below "peak" and didn’t include the remodeled bath).

∙ Apples To Apples (If You Ignore The New Bath): 2203 Broderick [SocketSite]

Posted by socketadmin at 6:00 AM | Permalink | Comments (107) | (email story)

May 18, 2009

While Others Sit The Mayor’s Mini-Manse In The Sky Moves

While the Bay Area high-end market is struggling, at least one high-end and rather high-profile sale is not: the Mayor’s $2,995,000 one-bedroom Bellaire Tower penthouse is now "firmly" in escrow (as in any contingencies have been removed).

∙ Fit For A King San Francisco Mayor (Or Getty): 1101 Green #2001 [SocketSite]
∙ More high-end properties sitting on the market [SFGate]

Posted by socketadmin at 8:00 AM | Permalink | Comments (27) | (email story)

May 15, 2009

QuickLinks: Signs Of Bay Area Economic Life (And Discounts)

∙ Bay Area economy shows signs of life [Business Times]
∙ Spike in San Francisco condo sales may signal comeback [Business Times]

Posted by socketadmin at 5:00 AM | Permalink | Comments (35) | (email story)

The World Market Is Flat!

Earlier this week a sale pair for a Noe Valley condo was submitted by a reader for consideration as an "apple." And while the pair passed our basic test (no major changes to the property between sales), its latest sale on 12/17/08 fell down on another (recency).

Then again, perhaps we’re wrong to believe the market has changed much since the fourth quarter of 2008. (Keep in mind that a mid-December close would suggest a contract that was written in either October or November.)

We have to admit it’s tempting to look at the sales history for 1169 Sanchez, see a sale on 4/11/06 for $775,000 and then again on 12/17/08 for $775,000 and declare the market flat. But that wouldn't be a very accurate depiction of what's actually going on.

And while not perfect, adding a median price per square foot trend line for condo sales in 94114 to the chart of contract prices for 1169 Sanchez should help make the point(s).

Perhaps that market isn’t so "flat" after all (and has actually been trending down since 2007). And looking to a December 2008 apple to understand the May 2009 market might not make too much sense.

Posted by socketadmin at 5:00 AM | Permalink | Comments (31) | (email story)

As Go Condo Values So Goes The Land Upon Which They're Built

"BayRock Residential has slashed the price of its approved condo site on Sutter Street from $18 million six months ago to $8 million, an indication that central San Francisco land prices are catching up with the decline in housing prices the city has seen."

∙ Value of entitled land plunges dramatically in S.F. [San Francisco Business Times]
∙ 1285 Sutter Street: The Proposed Design To Replace The Galaxy [SocketSite]
∙ 1285 Sutter: Fully Entitled, Retail Pre-Leased, And...On The Market [SocketSite]

Posted by socketadmin at 5:00 AM | Permalink | Comments (14) | (email story)

May 11, 2009

SocketSite's San Francisco Listed Housing Inventory Update: 5/11/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased 2.5% over the past two weeks (versus an average gain of 4.7% for the same two week period over the previous three years) and is now running 12.1% higher on a year-over-year basis (down 2.9% for single-family homes and up 22.9% for condos/TICs) and 45.5% higher than at the same point in 2006.

The typical spring-time bounce in sales activity known as basic seasonality, but which some seemed to have confused with a market rebound, appears to be moderating. And on a year-over-year basis sales activity in San Francisco remains down.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 4/27/09 [SocketSite]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (51) | (email story)

May 6, 2009

A Plugged-In Reader's "Feel Good" Rental Story (And Shout Out)

A plugged-in reader reports:

A feel good story (for me, not my new landlord).

From reading a large majority of the posts and comments [on SocketSite] and just from walking around Cow Hollow/Marina it was pretty obvious there was a lot of rental supply. My wife and I had outgrown our place and needed either a 2BR or a 1BR w a dining room - we needed 3 rooms plus a kitchen. We figured there would be a lot out there and we would have our choice of solid places. We saw some good places but the one we liked the most was a bit more than we wanted to spend.

Then LMRiM posted something about how asking rents were just that - "asking."

The place we liked had been empty for 2 months. They were asking X. I called up and offered X minus 12%. They told me I wasn't in the ballpark but they would keep me in mind. The place languished, then I saw it on a broker site, so I figured there was room. Then they lowered the rent to X minus 6%. I called em up, put in an app and [we move in soon].

The only thing we'll add, "asking" isn't just for rents.

UPDATE: Another plugged-in reader adds:

Also got a great deal on a house - Noe, single family home w/ great yard for ~3600. The ad that we responded to asked $4000 - funny thing is broker also listed the same place for $5000!!...Apparently bought at 950k, tried to sell at [$1.25M] no takers for some reason.

We'll let you do the math.

Posted by socketadmin at 2:30 PM | Permalink | Comments (29) | (email story)

JustQuotes: Except In San Francisco Of Course...

"There was this unrealistic view that the crazy financing was limited to subprime when of course it was across the board," said Andrew Laperriere, Washington-based managing director at research firm International Strategy & Investment Group. "A lot of jumbo mortgages were nothing down with high debt-to-income ratios."

∙ Rich Americans Default on Luxury Homes Like Subprime Victims [Bloomberg]

Posted by socketadmin at 8:00 AM | Permalink | Comments (34) | (email story)

May 4, 2009

Pending U.S. Home Sales Inch Up, Closed San Francisco Sales Fall

Pending U.S. home sales increased 3.2 percent from February to March (which shouldn’t have caught anybody by surprise) but also increased 1.1 percent higher on a year-over-year basis (3.9 percent and 1.7 percent respectively in the West). Think foreclosures.

At the same time, a plugged-in reader's early count of closed April sales suggests a year-over-year drop in activity of around 40 percent for listed properties in San Francisco.

∙ Pending Home Sales Rise, Housing Affordability Near Record [Realtor.org]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]
∙ 465 Hoffman: Architects Unveiling This Evening (And On The Market) [SocketSite]

Posted by socketadmin at 9:30 AM | Permalink | Comments (24) | (email story)

April 28, 2009

SocketSite’s S&P/Case-Shiller Bonus: San Francisco’s Thin Red Line

It’s a SocketSite bonus chart based on February’s S&P/Case-Shiller data for the San Francisco MSA and a chance to focus the discussion on analysis and numbers.

Plotted above, the percentage difference in index value compared to February 2009 for the top third of San Francisco MSA single-family home sales (by price) and all condominiums. Below the thin red line and the index on that date is "underwater" compared to February 2009, over and it’s above.

Once again, according to the Index single-family home values for the top third of the market in the San Francisco MSA have retreated to November 2003 levels having fallen 28% from a peak in August 2007. And Condo values in the San Francisco MSA have retreated to January 2004 levels having fallen 28.4% from an October 2005 high.

A closing thought to consider: according to a 2008 California Association of Realtors survey of 500 first-time home buyers in California, the average buyer planed on holding onto their purchase for just 43.6 months prior to selling.

∙ February S&P/Case-Shiller: San Francisco MSA Continues Slide [SocketSite]

Posted by socketadmin at 12:30 PM | Permalink | Comments (86) | (email story)

February S&P/Case-Shiller: San Francisco MSA Continues Slide

According to the February 2009 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 3.3% from January ’09 to February '09, down 31.0% year-over-year and down 44.9% from a peak in May 2006.

For the broader 10-City composite (CSXR), home values fell 2.1% from January to February and are down 31.6% from a peak in June 2006 (down 18.8% year-over-year).

Looking at the data from peak-thru-February 2009, Dallas has suffered the least, down 11.1% from its peak in June 2007; while Phoenix is down 50.8% from its peak in June of 2006. The rates of decline from the respective peak of each market are evidence of how much each market has given back from the gains earned in the past 10-15 years. All of the 20 metro areas are in double digit declines from their peaks, with ten of the MSA’s posting declines of greater than 30% and seven of those -- Detroit, Las Vegas, Los Angeles, Miami, Phoenix, San Francisco and San Diego -- in excess of 40%.

San Francisco MSA single-family home prices continued to fall across all three price tiers.

The bottom third (under $281,438 at the time of acquisition) fell 3.7% from January to February (down 37.7% YOY); the middle third fell 2.9% from January to February (down 22.4% YOY); and the top third (over $501,978 at the time of acquisition) fell 4.1% from January to February (down 19.4% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have retreated to below June 2000 levels having fallen 59% from a peak in August 2006, the middle third has fallen below April 2002 levels having fallen 40% from a peak in May 2006, and the top third has fallen to November 2003 levels having fallen 28% from a peak in August 2007.

Condo values in the San Francisco MSA fell 1.1% from January ’09 to February '09, down 23.3% on a year-over-year basis and down 28.4% from an October 2005 high.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).

∙ The Pace of the Decline in Residential Real Estate Prices Slowed in February [S&P]
∙ January S&P/Case-Shiller: San Francisco MSA Decline Accelerates [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (88) | (email story)

April 27, 2009

Catching Up On A Few Closings And Early April Apples About Town

We hadn’t originally featured it as an apple but rather an interesting Noe Valley space and photography. But as a plugged-in reader points out, the sale of the contemporary 921 Elizabeth closed escrow on 4/7/09 with a recorded contract price of $1,155,000 or 14.4% under its previous sale price of $1,350,000 in June of 2006.

Other activity over the first few weeks of the month for previously featured apples: 835 Foerster up in Miraloma Park closed escrow with a recorded contract price of $750,000 (21.1% under its previous purchase price of $950,000 in July of 2006), and the bank owned 279 Flournoy closed escrow with a recorded contract price of $340,000 (22.7% under its last previous purchase price of $440,000 in October of 2003).

As we wrote last November when 835 Foerster was listed for $855,000 and the listing noted "Lender-approved short sale...After many months of negotiations, sale price has been set! Must be sold immediately! Property was marketed for $1,049,000 last year!":

[W]hile it’s good to know the seller and lender have come to terms (but perhaps not grips), we’re more interested in whether or not the market (i.e., a buyer) will agree.

Apparently the seller and lender were still off by 12.3%. That’s not too bad, however, when compared to the person who set the list price last year and missed by twice that (28.5%).

∙ A Contemporary Condo That Caught Our Eyes (You Supply The Story) [SocketSite]
∙ While Those Two Agree, It’s A Third That Really Matters [SocketSite]
∙ Bank Owned For The Past Year But Now On The Market: 279 Flournoy [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (30) | (email story)

SocketSite's San Francisco Listed Housing Update: 4/27/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco increased a nominal 0.6% over the past two weeks (versus an average gain of 7.5% for the same two week period over the previous three years) and is now running 12.8% higher on a year-over-year basis (flat for single-family homes and up 21.7% for condos/TICs) and 54.2% higher than at the same point in 2006.

Twenty-three percent fewer listings on a year-over-year basis over the past two weeks is partially to blame for the dip, but we continue to see a slight uptick in potential sales activity albeit much less so than over the first two weeks of the month and without any signs of values stabilizing versus continuing to drop.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 4/13/09 [SocketSite]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (48) | (email story)

April 24, 2009

U.S. New Home Sales Down 31% YOY (West Shows Seasonality)

Purchases of new homes in the U.S. last month fell 0.6 percent to an annual pace of 356,000, down 31 percent from March 2008 and down almost 75 percent from a record pace of 1,389,000 in July 2005. In a show of relative strength (and seasonality), sales in the west increased 15 percent on a month over month basis.

With respect to existing home sales:

A report from the National Association of Realtors yesterday showed purchases of existing homes in March fell 3 percent to an annual rate of 4.57 million. The median price slumped 12 percent from a year earlier, and distressed properties accounted for about 50 percent of all sales.

Mounting foreclosures have drawn more buyers to the existing-home market. New-home sales now make up about 7 percent of the total market, down from about 16 percent at the peak of the housing bubble in mid-2005.

UPDATE: In response to a reader’s comment with respect to new home activity in San Francisco, we offer the following proxy (and perspective). The delta between listed and recorded sales in March 2008: 190. The delta between listed and recorded sales in March 2009: 94. And the year over year change: a 50 percent drop.

∙ Sales of U.S. New Homes in March Exceeded Forecast [Bloomberg]
∙ San Francisco Recorded Sales Activity In March: Down 34.6% YOY [SocketSite]

Posted by socketadmin at 8:15 AM | Permalink | Comments (7) | (email story)

April 23, 2009

RealFacts Reports (Not So Real) Asking Rents Flat In San Francisco

Based on a RealFacts survey of "professionally managed apartment complexes with 50 or more units," The Chronicle reports that average rents in San Francisco are off by a nominal 0.1 percent on a year-over-year basis and 95.8 percent occupancy (down 1.9 percent).

Unfortunately, and not too ironically, the RealFacts survey reflects the not so real market of asking rather than effective rents (after incentives). And keep in mind that over 700 units of new rental inventory has recently (or will soon) come on line in San Francisco and will need to be absorbed.

That new supply includes 192 units at Strata which offered a plugged-in reader a year of free parking and one month free rent, an effective discount of over 8 percent on a one year lease which wouldn't be reflected in the RealFacts survery of asking rents.

UPDATE: Speaking of incentives and why asking rent trends for large buildings aren’t a great measure of how the rental market is actually moving: "I just got an email from Argenta offering 2 mo free, up from 1 mo. Very nice people, BTW."

∙ Bay Area rents down for second straight quarter [SFGate]
∙ T-Minus Four Weeks For 260 New Mission Bay Apartments (355 King) [SocketSite]
∙ The Scoop On Strata At Mission Bay, Its Environs And Rents [SocketSite]
∙ The Rather Ironic "Argenta Silver Lining": Now Leasing At One Polk [ScoketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (27) | (email story)

April 22, 2009

Actual Q1 San Francisco Foreclosures Fall But Notices Of Default Spike

Bay Area Notices of Default (NODs) in the first quarter of 2009 rose 17.6% on a year-over-year basis, up 35.5% in San Francisco proper (from 420 to 569). NOD activity in San Francisco jumped 88.5% from the fourth quarter (302) as a Fannie Mae and Freddie Mac foreclosure moratorium in the fourth quarter expired on January 31, 2009.

Actual Bay Area foreclosures in the first quarter fell 9.0% on a year-over-year basis (from 6,646 to 6,050) with Contra Costa (down 22.0% to 1,738), Alameda (down 8.0% to 1,681) and Santa Clara (up 24.9% to 1,157) leading the way with respect to volume.

First quarter recorded foreclosures in San Francisco totaled 101, down 18.5% on a year-over-year basis and down 9.8% (11 homes) from the fourth quarter 2008. Once again, however, keep in mind that foreclosure moratorium by Fannie Mae and Freddie Mac.

∙ Golden State Mortgage Defaults Jump to Record High [DataQuick]
∙ Actual San Francisco Foreclosures Down 42% QOQ (Up 70% YOY) [SocketSite]

Posted by socketadmin at 2:45 PM | Permalink | Comments (163) | (email story)

April 17, 2009

No Rebound For You! (In Fact A Below Average Seasonality Bump)

In early March CBS5 reported signs of a "serious real estate rebound" in San Francisco. While we debunked it as basic seasonality, the report was quickly packaged and passed along as gospel by industry folks. And now we have the actual March results.

In 2009 recorded sales volume in San Francisco increased 22% from February to March (45% from January). On average over the past four years, however, recorded real estate sales volume has jumped 44% from February to March (65% from January).

In other words, not only do we see a 34.6% decline in year-over-year sales volume and no rebound, but we also see a below average seasonality bump.

∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]
∙ CBS Calls It A "Real Estate Rebound In San Francisco" [SocketSite]
∙ San Francisco Recorded Sales Activity In March: Down 34.6% YOY [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (37) | (email story)

April 16, 2009

San Francisco Recorded Sales Activity In March: Down 34.6% YOY

According to DataQuick, recorded home sales volume in San Francisco fell 34.6% on a year-over-year basis last month (332 recorded sales in March ’09 versus 508 sales in March ‘08) but rose 22.1% compared to the prior month (think seasonality rather than "rebound").

San Francisco experienced the sharpest year-over-year decline in sales volume of any Bay Area county last month with San Mateo the only other county recording a decline (down 13.2% YOY). And San Francisco's median sales price in March was $608,000, down 19.5% compared to March ’08 ($755,000) and down 5.0% compared to the month prior.

For the greater Bay Area, recorded sales volume in March was up 29.1% on a year-over-year basis and up 25.7% from the month prior (6,325 recorded sales in March '09 versus 4,898 in March ’08 and 5,032 in February '09), while the recorded median sales price fell 45.9% on a year-over-year basis, down 1.7% compared to the month prior.

Once again, think foreclosures and mix.

Last month 51.2 percent of all Bay Area resale homes had been foreclosed on at some point in the prior 12 months, down from 52.0 percent in February and up from 23.2 percent a year ago. By county it ranged from 11.5 percent in San Francisco to 70.0 in Solano.

And financing.

Mortgages for more than $417,000 were used to finance 19.0 percent of the Bay Area's home sales last month, compared with more than 60 percent before the credit crunch hit in late summer 2007.

The use of government-insured FHA loans - a common choice among first-time buyers - represented a record 25.4 percent of all Bay Area purchase loans in March, up from 1.5 percent a year ago.

At the extremes, Solano recorded a 102.8% year-over-year increase in sales volume (a gain of 366 transactions) on a 45.5% decrease in median sales price, while Contra Costa recorded a 68.4% increase in sales volume (a gain of 666 transactions) on a 47.7% drop in median sales price.

As always, keep in mind that DataQuick reports recorded sales (versus listed 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 continue climb, median still below $300K [DQnews]
∙ San Francisco Recorded Sales Activity In February: Down 36.9% YOY [SocketSite]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]
∙ CBS Calls It A "Real Estate Rebound In San Francisco" [SocketSite]

Posted by socketadmin at 4:30 PM | Permalink | Comments (56) | (email story)

Global Layoffs Leveling Off But Is It The Eye Of The Economic Storm?

A plugged-in reader’s comment with respect to the global economy that’s worth elevating:

Just heard a snippet of interesting data from law firm that helps companies with layoffs:

Q408: 1.0M layoffs helped with globally
Q109: 1.5M layoffs
Q209: on pace for 100k so far...

Maybe companies are beginning to figure out what normal looks like moving forward.

Either that or we're in the eye of the global economic storm. And in layoff news closer to home, it appears as though Yahoo will cut up to another 600.

∙ SocketSite's San Francisco Listed Housing Update: 4/13/09 [SocketSite]
∙ Yahoo plans to eliminate up to 600 jobs [SFGate]

Posted by socketadmin at 10:00 AM | Permalink | Comments (8) | (email story)

Growing Commercial Concern (And Residential Parallels)

"Of particular concern for San Francisco is the fact that nearly 75 percent of the Class A - premier - office buildings downtown traded hands in the past four years, according to Tove Nilsen, director of market research at Colliers International. The flurry of activity propelled sales prices to record highs and drove the ratio of rental income to cost to all-time lows.

That might have been acceptable when rents were climbing. But the tumbling economy has emptied 1.1 million square feet of space since the beginning of last year and has pushed rents down by 24 percent, according to Colliers. Meanwhile, leases for about 6 million square feet will come up for renewal this year, as will those for more than 10 million square feet in 2010."

∙ Commercial real estate market softens [SFGate]
∙ Pro Forma Problems: Find Commercial, Replace With Residential? [SocketSite]
∙ Co-opting A Reader’s Comment: Our Commercial Market Decline [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (15) | (email story)

April 13, 2009

SocketSite's San Francisco Listed Housing Update: 4/13/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco fell 4.7% over the past two weeks (versus an average gain of 1.9% for the same two week period over the previous three years) and is now running 17.5% higher on a year-over-year basis (up 8.7% for single-family homes and 23.5% for condos/TICs) and 71.3% higher than at the same point in 2006.

Sixteen percent fewer listings on a year-over-year basis for the first two weeks of April are partially to blame for the dip, but an increase in sales activity in the sub-million dollar market over the past two weeks has reduced Active inventory as well. And this time it’s not simply seasonality as our counts suggest as much as a twenty percent year-over-year bump in potential contracts written in early April.

It is, however, way too soon to call it a turn or even simply a trend.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 3/30/09 [SocketSite]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (66) | (email story)

April 8, 2009

Co-opting A Reader’s Comment: Our Commercial Market Decline

As a plugged-in reader commented and we’ve now co-opted, San Francisco’s commercial real estate market continues its decline. A few stats from Bloomberg:

San Francisco office rents dropped 24 percent in the first quarter from a year earlier, the biggest decline since the dot-com crash in 2001.

The office vacancy rate rose to 13.2 percent from 12.6 percent in the previous quarter and up from 10.2 percent a year earlier.

Almost half of the largest companies in the San Francisco Bay Area plan to cut staff in the next six months.

Not good. Unless, of course, you’re a renter looking to expand or renegotiate a lease.

∙ San Francisco Office Rents Fall Most Since 2001 [Bloomberg]
∙ Doesn't Everybody Want To Work Here? (Class A Rents Plunge) [SocketSite]

Posted by socketadmin at 1:30 PM | Permalink | Comments (6) | (email story)

Effective San Francisco MSA Residential Rents Lead U.S. Decline

Effective residential rents in large apartment buildings in the San Francisco MSA declined 2.8% in the first quarter of 2009, the sharpest recorded decline amongst the top 79 U.S. markets. New York recorded a 2.6% decline to take second place and San Jose a 2.5% drop to take third.

According to San Francisco Apartments Association Executive Director Janan New by way of the Examiner, "rents have dropped most in the Marina, Russian Hill and Telegraph Hill neighborhoods, and least in Mission and Inner Sunset."

As outlined in our 2009 residential real estate outlook in January, we expect to see rents in San Francisco continue to drop throughout 2009.

∙ Landlords See a Jump in Vacancy Rates Even as Rents Drop [WSJ]
∙ Bay Area rents fall more than any U.S. region [Examiner]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (60) | (email story)

April 7, 2009

1470 Noe Closes For 100% Of Asking (But $25,000 Less Than In 2005)

It’s true, we missed it when the apples to apples sale of 1470 Noe recently closed escrow (hey, it happens). But luckily a reader calls us out (and we’d expect nothing less). Purchased for $1,865,000 in January of 2007 (asking $1,949,000 at the time), closed escrow on 3/27/09 with a reported contract price of $1,850,000 (asking at the time).

Considering the current market a two year "push" might not seem so bad for this single-family Noe Valley home. But do keep in mind it’s also an effective four year push in terms of appreciation as Mr. Alou paid $1,875,000 for the house in March of 2005.

∙ 1470 Noe Steps Back Up To The Plate (And A Plugged-In Peek Inside) [SocketSite]
∙ Another On Noe (1470 Noe Street) [SocketSite]
∙ Two Well Designed Data Points We Wouldn't Dismiss Out Of Hand [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (52) | (email story)

April 6, 2009

Mortgage Rates Are Down But Are The "Bad Ways" Picking Back Up?

From a plugged-in reader refinancing a home up in Portland:

We just signed on our refinance (4.625% for 1 point) and we were talking to a woman who worked at the title company and she said things are going right back to the old (bad) ways. People taking mortgages that over extend them financially, brokers pushing through anything they can. She said it is going straight back to how things were before and she wasn't happy about it.

Is it an "only in Oregon" or anomalous report?

Posted by socketadmin at 10:45 AM | Permalink | Comments (18) | (email story)

From Flippy To Floppy For Watermark (501 Beale) Penthouse #2B

Two months after its initial sale for $1,250,000 in October of 2006 Watermark (501 Beale) Penthouse #2B was flipped for $1,375,000. (Ah, the good old days.) It's now a little over two years later and the top floor condo is back on the market and asking $1,094,500.

The listing notes both short sale and bank owned (we believe it’s the former) and the condo failed to sell earlier this year when seeking $1,195,000. Keep in mind that the identical "penthouse" unit a floor below (#PH1B) sold for $1,300,000 in October of 2006 and was likley a supporting comp for the flip of #PH2B. And so on. And so forth.

∙ Listing: 501 Beale Street #PH2B (2/2) - $1,094,500 [MLS]

Posted by socketadmin at 7:30 AM | Permalink | Comments (81) | (email story)

April 3, 2009

U.S. Prime Delinquency Rate Doubles, Alt-A Approaches 10%

The delinquency rate for prime mortgages over 60 days behind more than doubled from the first quarter of 2008 (1.1%) to the fourth (2.4%) while serious delinquencies for Alt-A mortgages jumped from 5.18% to 9.1%. For context, the serious delinquency rate for subprime mortgages was 10.75% in the first quarter of 2008 (16.4% in the fourth).

The delinquency rate for prime mortgages in the U.S. has hit an all-time high, yet mortgage rates remain near all-time lows.

∙ Failure Rate Rises on Mortgages Revised in Late 2008, U.S. Says [Bloomberg]

Posted by socketadmin at 6:00 AM | Permalink | Comments (94) | (email story)

April 2, 2009

Apples To Apples With Views, Views, Views! (714 Duncan)

Purchased for $1,413,000 in January of 2008, the four-bedroom 714 Duncan is back on the market in Noe Valley and asking $1,295,000. A transfer forces the sale.

There’s little doubt the quick turn will result in a loss as even with "typical San Francisco appreciation" transaction costs wouldn’t be covered. But that doesn’t mean this data point will be flawed. In fact, this sale will provide some rather clean commentary on changing neighborhood values over just the past year. And that’s why we like, and offer, our apples.

∙ Listing: 714 Duncan (4/2) 2,050 sqft - $1,295,000 [MLS]
∙ Expectation Setting: San Francisco Appreciation [SocketSite]

Posted by socketadmin at 3:00 PM | Permalink | Comments (53) | (email story)

April 1, 2009

A Plugged-In Perspective On The Local Economics Of Medicine

A plugged-in reader’s perspective on the local economics of medicine:

I wanted to comment on the economic decline and which groups are affected. Some sources talk about the medical field being unaffected, but this just isn't true. I'm finishing my specialty training in 2 months, and I can tell you that all of the specialty fellows, GI, Cardiology, Nephrology, Pulmonary, etc. are having trouble finding jobs.

The graduating residents are running into the same thing. The larger employers, like the University of California system and Kaiser, have implemented hiring freezes in a lot of their departments. This applies to support staff as well (nurses, resp therapists, etc), not just MD's. The smaller private groups seem to be doing the same, just not announced "official" freezes. A lot of the older docs are also not retiring to make up for all the money they've lost recently in their 401k's. This increased physician "supply" is also dampening the overall salaries as well.

The relevancy to local real estate? Earnings, wealth and perception. Okay, and a chance to get our Case-Shiller discussion back on track.

∙ January S&P/Case-Shiller: San Francisco MSA Decline Accelerates [SocketSite]
∙ JustQuotes: FIFO Not LIFO For The San Francisco Economy? [SocketSite]

Posted by socketadmin at 10:45 AM | Permalink | Comments (124) | (email story)

Talking About TIC Activity Or The Lack Thereof: 3175 California Closes

A plugged-in reader reports on the sale of 3175 California, a two (plus) bedroom, two bath and 1,140 square foot TIC on the border between upper and Lower Pacific Heights:

3175 California Street (Pac Heights, near the JCC) closed today. It has been on the market since the first week of September [when listed for $739,000]. It opened at 699,000 in December with a new agent, and then was reduced to 649,000 in February. Closed [yesterday] for 610,000.

Top floor with leased parking in the building, closed for $535 per square foot.

∙ RandomRumors Via Trulia Voices: Fractional TIC Financing Drying Up? [SocketSite]
∙ 3175 California [Zillow]

Posted by socketadmin at 7:30 AM | Permalink | Comments (7) | (email story)

March 31, 2009

January S&P/Case-Shiller: San Francisco MSA Decline Accelerates

According to the January 2009 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 4.4% from December ’08 to January '09 and fell 32.4% year-over-year. For the broader 10-City composite (CSXR), year-over-year price growth is down 19.4% (having fallen 2.5% from December).

The three worst performing cities, in terms of annual declines, continue to be from the Sunbelt, each reporting negative returns in excess of 30%. Phoenix was down 35.0%, Las Vegas declined 32.5% and San Francisco fell 32.4%. Dallas, Denver and Cleveland faired the best in terms of annual declines down 4.9%, 5.1% and 5.2%, respectively.

Condo values in the San Francisco MSA accelerated their decline falling 5.4% from December ’08 to January '09, down 19.8% on a year-over-year basis and down 27.2% from an October 2005 high.

San Francisco MSA single-family home prices fell across all three price tiers.

The bottom third (under $297,909 at the time of acquisition) fell 4.7% from December to January (down 39.2% YOY); the middle third fell 2.9% from December to January (down 24.8% YOY); and the top third (over $527,385 at the time of acquisition) fell 4.2% from December to January (down 17.9% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have retreated to August 2000 levels having fallen 58% from a peak in August 2006, the middle third has returned to May 2002 levels having fallen 39% from a peak in May 2006, and the top third has fallen to February 2004 levels having fallen 25% from a peak in August 2007.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best).

∙ The New Year Didn’t Change the Downward Spiral of Residential Real Estate [S&P]
∙ December S&P/Case-Shiller: San Francisco MSA Ends '08 Down 31% [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (169) | (email story)

March 30, 2009

SocketSite's San Francisco Listed Housing Update: 3/30/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco rose 3.3% over the past two weeks (versus an average of 4.7% for the same two week period over the previous three years) and is now running 26.8% higher on a year-over-year basis (up 18.2% for single-family homes and 32.7% for condos/TICs) and 72.6% higher than at the same point in 2006.

Twelve percent (12.1%) of listed inventory in San Francisco is known to either be bank owned (REO) or seeking a short sale including One Rincon Hill (425 1st Street) #2307, 1870 Jackson #701 in Pacific Heights, and 2510 Jackson (which we profiled last year when asking $14,900,000).

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 3/16/09 [SocketSite]
∙ Listing: 425 1st Street #2307 (1/1) - $649,000 [MLS]
∙ Listing: 1870 Jackson #701 (2/2) - $975,000 [MLS]
∙ Listing: 2510 Jackson (7/6.5) - $13,495,000 [MLS]
∙ Fortunes Can Be Fleeting (And Mansions Can Be Foreclosed Upon) [SocketSite]

Posted by socketadmin at 5:30 AM | Permalink | Comments (29) | (email story)

What Happens When The Bay Area Median Drops 59%?

"Underlying all the market changes is the prevalence of bank-owned foreclosures being unloaded at a discount. Two years ago, only 2.6 percent of all existing [Bay Area] homes that changed hands had been foreclosed on in the prior months. This year, more than half of the existing homes that sold in January and February were foreclosures."

∙ Bargain home prices attract investors, novices [SFGate]

Posted by socketadmin at 5:15 AM | Permalink | Comments (5) | (email story)

QuickLinks: January Outlook(s) Versus April Rental Reality

∙ Marcus & Millichap San Francisco Rental Outlook (And Quick Rebuttal) [SocketSite]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]
∙ Renters rejoice: Prices falling citywide [San Francisco Examiner]

Posted by socketadmin at 5:10 AM | Permalink | Comments (16) | (email story)

March 27, 2009

RandomRumors Via Trulia Voices: Fractional TIC Financing Drying Up?

We try not to reward bad behavior and the hijacking of a post, but it’s an off-topic comment worth repeating and a question worth clearing up (if you can):

From Real Estate pro Sally Rosenman on the Trulia forums : Sterling Bank is providing fractional loans and they are about it at the moment. Can anyone confirm or refute that fractional TIC loans are drying up? Is Bank of Marin or Circle Bank lending?

UPDATE: A few TIC numbers and trends to ponder as well.

Posted by socketadmin at 3:30 PM | Permalink | Comments (21) | (email story)

March 25, 2009

Coming Soon And An Überprime Data Point To Be: 2306 Broadway

Coming soon and asking $6,495,000 according to Nina Hatvany, it’s a plugged-in tipster that suggests we keep an eye on 2306 Broadway which is currently being prepped for sale.

And while we don’t see a recorded sales price for its purchse in August of 2000, we do see a tax assessed value of $7,648,507 which would suggest a purchase price of roughly $7,000,000 for this big view prime Pacific Heights home eight years ago.

Do keep in mind, however, that the sale of 2306 Broadway won't yield a perfectly clean "apple" as the kitchen has been updated and the master bathroom remodeled since. But it might offer some interesting insight into what’s happening with property values high atop San Francisco as opposed to a throw-away observation like it's still expensive.

Posted by socketadmin at 11:15 AM | Permalink | Comments (67) | (email story)

When Up Is Down: Bay Area Building Permits And U.S. Sales

Bay Area building permit activity rose 111 percent from January to February with 80 percent of the gain attributable to a single 143-unit mixed-use Berkeley project. At the same time, Bay Area permit area activity is down 47 percent on a year-over-year basis.

The pace of U.S. new-home sales also “unexpectedly” increased 4.7 percent from January to February (up 6.6 percent in the West), but fell 41 percent on a year-over-year basis.

In related news, we continue to see seasonality.

∙ Home building permits rise - concerns linger [SFGate]
∙ New-Home Sales in U.S. Rose 4.7% to a 337,000 Pace [Bloomberg]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (3) | (email story)

March 23, 2009

Three Cheers Quotes For Bank Of America’s New Jumbo Loan Program

"Bank of America, the country's largest mortgage lender, is rolling out a large program to finance loans between about $730,000 and $1.5 million, with fixed 30-year rates starting in the upper 5% range. The loans will be available through the bank's retail network and through its Countrywide Home Loans subsidiary."

"Bank of America quotes a minimum [down payment] of 20%....[and the new program] requires hefty liquid resources -- six months of principal, interest, property tax and insurance payments in reserve -- plus fully documented income, solid credit scores and a full appraisal."

UPDATE: A "tipster" beats us to the editorial punch (at least with respect to impact):

Countrywide/B of A has had that product since October of last year. Rates were in the 6% range.

I suspect that the debt to income hurdles are pretty high to get that rate (you'll note they don't mention it...), because it hasn't seemed to change the market that much in the 5 months they've had it.

As we’ve seen with other programs, we expect the Bank of America program to benefit qualified buyers though lower rates but not to have a significant impact on activity or demand.

∙ New supply of 'jumbo' financing in pipeline [LA Times]
∙ Conforming Loan Limits: A Placeholder For Discussion And Analysis [SocketSite]

Posted by socketadmin at 1:30 PM | Permalink | Comments (39) | (email story)

March 20, 2009

685 Units Looking Beyond The Current San Francisco Downturn

"On Rincon Hill, the Emerald Fund is proposing to build 308 units at 333 Harrison St., a project that would include two neighborhood parks. At 430 Main St. and 429 Beale St., a narrow lot sandwiched between the Baycrest condos and a Caltrans yard, Portland-Pacific is proposing to build 113 apartments. The Martin Building Co., meanwhile, is scrambling to put together financing to go forward on two apartment complexes: 179 units at 2235 Third St. and 85 units at 178 Townsend St."

∙ Developers emerge for new San Francisco housing [San Francisco Business Times]
∙ A Plugged-In Reader's 13 Notes On The "PC" Approved 333 Harrison [SocketSite]
∙ 430 Main and 429 Beale Streets - Tell Them To Forget It! [Rincon Hill San Francisco]
∙ 2225-2255 Third Street: What Was (And Hopefully Is) In The Works [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (4) | (email story)

March 19, 2009

San Francisco Recorded Sales Activity In February: Down 36.9% YOY

According to DataQuick, recorded home sales volume in San Francisco fell 36.9% on a year-over-year basis last month (272 recorded sales in February ’09 versus 431 sales in February ‘08) but rose 18.8% compared to the month prior (think seasonality).

San Francisco once again experienced the sharpest year-over-year decline in sales volume of any Bay Area county last month with Marin the only other county recording a decline (down 18.4% YOY). San Francisco's median sales price in February was $640,000, down 13.0% compared to February ’08 ($736,000) but up 13.9% compared to the month prior.

For the greater Bay Area, recorded sales volume in February was up 26.1% on a year-over-year basis but fell a nominal 0.4% from the month prior (5,032 recorded sales in February '09 versus 3,989 in February ’08 and 5,050 in January '09), while the recorded median sales price fell 46.2% on a year-over-year basis, down 1.7% compared to the month prior.

Once again, think foreclosures and mix.

Last month 52 percent of all homes that resold in the Bay Area had been foreclosed on at some point in the prior 12 months, up from a revised 51.9 percent in January and 22.3 percent a year ago.

At the county level, foreclosure resales last month ranged from 12.1 percent of resales in San Francisco to 69.5 percent in Solano County. In the other seven counties, foreclosure resales were as follows: Alameda, 46.2 percent; Contra Costa, 65.1 percent; Marin, 18.9 percent; Napa, 63.1 percent; Santa Clara, 42.9 percent; San Mateo, 31.3 percent; and Sonoma, 57.1 percent.

And financing:

The use of government-insured, FHA loans – a common choice among first-time buyers – represented a record 24.9 percent of all Bay Area purchase loans last month.

Conversely, use of so-called jumbo loans to finance high-end property remained at abnormally low levels. Before the credit crunch hit in August 2007, jumbo loans, then defined as over $417,000, represented 62 percent of Bay Area purchase loans, compared with just 17.5 percent last month.

At the extremes, Solano recorded a 100.4% year-over-year increase in sales volume (a gain of 279 transactions) on a 44.3% decrease in median sales price, while Contra Costa recorded a 70.4% increase in sales volume (a gain of 530 transactions) on a 51.9% drop in median sales price.

As always, keep in mind that DataQuick reports recorded sales (versus listed 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).

Editor’s Note: We’ve adjusted the y-axis for Median Sales Price on the graph above which now crosses the x-axis at zero (as sales volume always has in months past).

∙ Bay Area home sales climb above last year as median falls below $300K [DQnews]
∙ San Francisco Recorded Sales Activity In January: Down 21.8% YOY [SocketSite]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]

Posted by socketadmin at 10:05 AM | Permalink | Comments (46) | (email story)

QuickLinks: The Fed Covers The B-52’s (Legal Tender)

∙ ‘Rambo Fed’ Will Buy Treasuries to Combat Crisis [Bloomberg]
∙ Mortgage Rates May Fall to Lowest Since WWII on Fed Purchases [Bloomberg]
∙ Dollar Rally Crumbles as Fed Ramps Up Printing Press [Bloomberg]

Posted by socketadmin at 8:00 AM | Permalink | Comments (31) | (email story)

March 16, 2009

The SocketSite Reality Check For CBS’s Infamous "42 Offer" Home

While we’ve already debunked the CBS report that a recent uptick in home sales activity is a sign of a "serious real estate rebound" in San Francisco (we’ll call it seasonality and note that San Francisco sales activity continues to fall on a year-over-year basis), we now turn our attention to their infamous "42 offer" home.

Presented by CBS and their cast of "real estate experts" as another "hard fact" to back their report of a rebounding San Francisco real estate market (also touted as a "mini-boom"), we dug up some of our own facts on the Excelsior home. The address is 555 Edinburgh and it was listed for sale at $459,000.

At a reported 1,250 square feet (plus a full basement “with room to expand”) that’s a list price of $367 per square foot. At the same time, according to PropertyShark the median price per square foot for 2009 home sales in 555 Edinburgh’s zip code (94112) currently weighs in at $426. In 2008 the median sales price per square foot was $490, in 2007 it was $542, and in 2006 it was $580.

In other words, 555 Edinburgh was listed at 14% under the 2009 median, 25% below the 2008 median, 32% below the 2007 median, and 37% below the 2006 median. In fact, it was priced right around the 2002 median ($372 per square foot). Even a sale at $100,000 over asking suggests a closing price around the 2004 median ($450 per square foot).

Were the 42 offers on 555 Edinburgh a sign of a "serious real estate rebound" in San Francisco? Once again we’ll say no, it was commentary on pricing. And it's frightening that any industry expert would suggest otherwise.

∙ Listing: 555 Edinburgh (2/1) 1,250 sqft - $459,000 (pending) [MLS]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]
∙ SocketSite's San Francisco Listed Housing Update: 3/16/09 [SocketSite]

Posted by socketadmin at 4:30 PM | Permalink | Comments (80) | (email story)

A Plugged-In Reader’s Phantom Inventory Analysis For San Francisco

A plugged-in reader provides some great "phantom inventory" analysis for San Francisco:

I took a look over the weekend at MLS records that went to Expired or Withdrawn status since 2007. To get a unique count by address, I didn't count multiple instances for the same address and then eliminated listings that sold or went Active (or Contingent or Pending) subsequent to the expired or withdrawal date. So the following counts show the number of expired or withdrawn listings since 2007 that have not subsequently been sold and are not currently active (or contingent or pending):

SFH: 1,327
Condo: 2,657
Total: 3,984

Compare these (or add them) to the Active count [shown below]:

SFH: 602 active
Condo: 1,046 active
Total: 1,648 active

This analysis indicates that for every current active listing there are more than two other properties that have been withdrawn from the market (and have not returned) in the past 2 years by discouraged sellers.

Of course listings have always been withdrawn for many reasons - but the total number since 2007 has been about 50% higher than the 2000 - 2006 period.

I agree…that there is a huge "phantom inventory" from discouraged [or] discretionary sellers in addition to those who haven't yet put their properties on the market. Pent-up supply must surely exceed pent-up demand - at least from qualified potential buyers. The 3,984 properties from my analysis would take 20 months to be absorbed at the current sales pace.

Keep in mind that neither our listed count nor our reader's "phantom" count includes unlisted developer inventory.

And at the risk of bringing up our Complete Inventory Index (we know, we know), add another 1500 to 2000 housing units of already constructed but as of yet unsold San Francisco inventory that also needs to be absorbed.

∙ SocketSite's San Francisco Listed Housing Update: 3/16/09 [SocketSite]
∙ SocketSite’s Complete Inventory Index (Cii): Q1 2008 (San Francisco) [SocketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (86) | (email story)

SocketSite's San Francisco Listed Housing Update: 3/16/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco rose 8.7% over the past two weeks (versus an average of 4.3% for the same two week period over the previous three years) and is now running 24% higher on a year-over-year basis (up 8.8% for single-family homes and 34.8% for condos/TICs) and 80% higher than at the same point in 2006.

On the demand side, sales volume over the past two weeks in San Francisco appears to have been off by at least 20% on year-over-year basis despite a much ballyhooed and incorrectly interpreted seasonal uptick in activity.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 3/02/09 [SocketSite]
∙ SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]

Posted by socketadmin at 6:30 AM | Permalink | Comments (22) | (email story)

March 12, 2009

SocketSite Sees Seasonality (Versus Signs Of A Rebound)

We’ve put some DataQuick sales data behind the recent CBS5 "rebound" report to make a simple point. Despite significant discounting in the new development market, the recent "spike" in San Francisco sales activity is being driven by seasonality.

Any industry expert that claims a March spike in sales volume as evidence of a real estate rebound either doesn’t understand the basics of the market or isn’t being entirely forthcoming. We’ll let you decide which is worse.

Well, either that or the San Francisco real estate market "rebounded" in March of 2005. Then again in March of 2006. And again in March of 2007. And again…

∙ CBS Calls It A "Real Estate Rebound In San Francisco" [SocketSite]

Posted by socketadmin at 3:00 PM | Permalink | Comments (65) | (email story)

CBS Calls It A "Real Estate Rebound In San Francisco"

Remember when we promised to point out the bullish signs for the San Francisco real estate market based on good buy side analysis? Well, this isn’t it.

Multiple offers on properties listed below current market? Amazing! Sales up on significant price cuts and seasonality? Shocking! A rebound from the bottom? We'll say no.

UPDATE: And in related news: SocketSite Sees Seasonality (Versus Signs Of A Rebound).

∙ Signs Of Real Estate Rebound In San Francisco [cbs5]
∙ Infinity Sales Update: New Contracts Up But Driven By Discounts [SocketSite]
∙ San Francisco Recorded Sales Activity In January: Down 21.8% YOY [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (108) | (email story)

March 9, 2009

The Good News: Contractors Are Actually Calling Their Clients Back...

"About 25 percent of the San Francisco region's approximately 16,000 building trades workers are out of work, compared with nearly full employment last year, said Michael Theriault, secretary and treasurer of the San Francisco Building and Construction Trades Council." (S.F. construction slows to a crawl)

Posted by socketadmin at 7:30 AM | Permalink | Comments (21) | (email story)

March 6, 2009

U.S. Unemployment Joins San Francisco County In The 8% Club

While the preliminary unemployment rate in San Francisco County hit the 8.0% mark in January, in February it hit 8.1% nationally. From Bloomberg:

The U.S. unemployment rate jumped in February to 8.1 percent, the highest level in more than a quarter century, a surge likely to send more Americans into bankruptcy and force further cutbacks in consumer spending.

Employers eliminated 651,000 jobs last month, the Labor Department said today in Washington. Losses have now exceeded 600,000 for three straight months, the first time that’s happened since the data began in 1939.

Do not underestimate the impact of unemployment on real estate, the brunt of which we believe has yet to be seen.

∙ U.S. Economy: Unemployment in U.S. Surged to 8.1% in February [Bloomberg]
∙ Unemployment In The San Francisco MSA Ticks Up To 7.5% [Socketsite]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (5) | (email story)

March 5, 2009

Local Housing Developer AF Evans Files For Bankruptcy Protection

In what's likely not to be good news for the development of 55 Laguna (at the very least with regard to timing), Oakland based developer AF Evans has filed for Chapter 11 bankruptcy protection citing "plummeting house prices and the credit crunch."

∙ AF Evans Co. files Chapter 11 [San Francisco Business Times]
∙ 55 Laguna: The Plugged-In (And AF Evans) Development Update [SocketSite]

Posted by socketadmin at 4:20 PM | Permalink | Comments (11) | (email story)

Unemployment In The San Francisco MSA Ticks Up To 7.5%

From the Chronicle:

California officials say unemployment rates in the Bay Area jumped in January, reaching 9.4 percent in the San Jose area, 9.2 percent in the East Bay and 7.5 percent in San Francisco and vicinity.

The San Francisco metropolitan area, which includes Marin and San Mateo counties, experienced the mildest rise from December's 6.2 percent, and still has one of the lowest rates in the state.

And in related national news: Mortgage Delinquencies Rise to Record on Job Losses.

UPDATE: County level detail from a plugged-in reader:

Note that SF's unemployment rate is 8.0% (up from 6.5% in December) according to today's release. Marin and San Mateo counties' rates are lower, bring the MSA rate down. So we're "less bad" than the rest of the state, but that is a huge one-month leap.

∙ Bay Area unemployment jumps higher [SFGate]
∙ Mortgage Delinquencies Rise to Record on Job Losses [Bloomberg]

Posted by socketadmin at 12:45 PM | Permalink | Comments (22) | (email story)

Cognitive Listing Dissonance At The Watermark (501 Beale #14D)

Originally listed as a Watermark resale for $1,585,000 last July, from a listing later last year: “Views Galore 501 Beale #14D Offered at $1,499,000 Extraordinary price reduction!”

From a listing after that: “Buyers and Agents, now is the time to take advantage of this price!” Asking $1,399,000 at the time.

From the listing today: “Great Opportunity!! Take advantage of HUGE PRICE REDUCTIONs and 1 yr. HOA concession. Motivated sellers!!” Now asking $1,365,000.

And from public records: purchased for $1,303,500 in September of 2006 (not including any incentives). Cognitive listing dissonance (TM) is the first thing that comes to mind.

∙ Listing: 501 Beale #14D (2/2) - $1,365,000 [MLS]

Posted by socketadmin at 9:00 AM | Permalink | Comments (42) | (email story)

March 4, 2009

Beige Book Results: Economic Conditions Continue To Deteriorate

From the latest Federal Reserve regional business survey (a.k.a. The Beige Book):

Reports from the twelve Federal Reserve Districts suggest that national economic conditions deteriorated further during the reporting period of January through late February. Ten of the twelve reports indicated weaker conditions or declines in economic activity; the exceptions were Philadelphia and Chicago, which reported that their regional economies "remained weak." The deterioration was broad based, with only a few sectors such as basic food production and pharmaceuticals appearing to be exceptions. Looking ahead, contacts from various Districts rate the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010.

As we wrote in April of 2008 when the Twelfth District ("San Francisco") was showing weakness: what does economic activity have to do with real estate? We'll just pretend you didn't ask that question (if for some strange reason you did).

∙ Federal Reserve Bank: Beige Book Summary (March 4, 2009) [federalreserve.gov]
∙ Beige Book Results For The Twelfth District (San Francisco): Flat [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (8) | (email story)

March 3, 2009

U.S. Pending Home Resales Drop 7.7% In January, December Revised

The National Association of Realtors reports a 7.7% January drop in U.S. pending home resales and has revised their originally reported 6.3% gain in December down to 4.8%.

"There are just too many headwinds for homebuyers -- tight credit, mounting job losses and fears of further price declines," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. "The housing market is showing no sign of a bottom. This could be the story for the first half of this year."

Sounds familiar. That being said, pending sales increased 2.4% in January for the West but driven by the sale of bank owned homes.

∙ Pending U.S. Home Resales Slump More Than Forecast [Bloomberg]

Posted by socketadmin at 8:00 AM | Permalink | Comments (20) | (email story)

March 2, 2009

Early February Listed Sales Count For San Francisco: Down 35-40%

A plugged-in reader provides the early 2009 count and year-over-year six year history for February sales of single-family homes, condos and TICs in San Francisco.

Expect the final count for 2009 to increase by 15-25 units as records are updated (yielding total listed sales of between 189-199 units), but accounting for even an additional 25 closings it appears that sales volume in San Francisco has dropped at least 36% on a year-over-year basis (versus an 18% drop from 2007 to 2008), and that we'll close out this past February with sales volume down almost 50% from five years before.

At the same time, inventory of listed and available single-family homes, condos and TICs is up 24% on a year-over-year basis (versus a 42% increase from 2007 to 2008) and up 66% over the past three.

As we noted last month, January typically marks the seasonal low point for sales activity and sales counts should climb over the next five months at a faster pace than inventory.

∙ SocketSite's San Francisco Listed Housing Update: 3/02/09 [SocketSite]
∙ Early January Listed Sales Results For San Francisco: Down 34% [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (24) | (email story)

Buffet Calls Shenanigans Shambles (And The Dow Dips Below 7,000)

The Dow Jones Industrial Average has fallen below 7,000 for the first time since 1997 and Warren Buffet has eloquently predicted our economy will remain in "shambles" throughout 2009 (and "probably well beyond"). Now about our outlook...

∙ Buffett Says Economy ‘In Shambles,’ Promises Best Days Ahead [Bloomberg]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (37) | (email story)

SocketSite's San Francisco Listed Housing Update: 3/02/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco rose a nominal 1.1% over the past two weeks (versus an average of 6.6% for the same two weeks over the previous three years) and is now running 24.4% higher on a year-over-year basis (up 11.8% for single-family homes and 33.2% for condos/TICs) and 66% higher at the end of February 2006.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 2/17/09 [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (42) | (email story)

February 27, 2009

Downward Revisions: They're Not Just For NAR These Days

"[U.S. GDP] contracted at a 6.2 percent annual pace from October through December, more than economists anticipated and the most since 1982, according to revised figures from the Commerce Department today in Washington. Consumer spending, which comprises about 70 percent of the economy, declined at the fastest pace in almost three decades."

∙ U.S. Economy Shrank 6.2% Last Quarter, Most Since ’82 [Bloomberg]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 5:45 AM | Permalink | Comments (13) | (email story)

February 24, 2009

December S&P/Case-Shiller: San Francisco MSA Ends '08 Down 31%

According to the December 2008 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 3.8% from November ’08 to December '08 and fell 31.2% year-over-year. For the broader 10-City composite (CSXR), year-over-year price growth is down 19.2% (having fallen 2.3% from November).

The seven worst performing cities in terms of year-over-year declines continue to be from the Sunbelt, reporting negative returns in excess of 20%. Phoenix was down 34.0%, Las Vegas reported -33.0% and San Francisco fell 31.2%. Denver, Dallas, Cleveland and Boston faired the best in terms of annual declines down 4.0%, 4.3%, 6.1% and 7.0%, respectively.

Condo values in the San Francisco MSA also continued their decline falling 1.3% from November ’08 to December '08, down 19.8% on a year-over-year basis and down 23.0% from an October 2005 high.

San Francisco MSA single-family home prices fell across all three price tiers.

The bottom third (under $321,066 at the time of acquisition) fell 3.8% from November to December (down 39.0% YOY); the middle third fell 2.5% from November to December (down 25.8% YOY); and the top third (over $561,810 at the time of acquisition) fell 3.4% from November to December (down 15.8% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have retreated to October 2000 levels, the middle third has returned to June 2002 levels, and the top third has fallen to April 2004 levels.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA) and are imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best).

∙ Home Price Declines Closed Out 2008 with Record Lows [S&P]
∙ November S&P/Case-Shiller: San Francisco MSA Down, Rate Levels [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (81) | (email story)

February 23, 2009

Checking In On Two Pacific Heights Apples: 2155 Buchanan Update

Apples-to-apples sales tell us the most about how the market is moving, but non-sales can provide some hints as well.

And while 2155 Buchanan Street #9 is in contract up in Pacific Heights (purchased for $1,000,000 in June 2006, listed for $950,000 in November 2008, last asking $885,000), the listing for the "reduced to sell!" and vacant 2155 Buchanan Street #7 has expired without a sale (purchased for $899,000 in July 2005, listed for $960,000 in August 2008, asking $850,000 at expiration).

Perhaps we’ll soon see a sign in the window for number seven and another unit of rental inventory to be absorbed. We’ll keep you posted on the contract price for number nine.

UPDATE: After 24 hours off the MLS as "expired," the listing for 2155 Buchanan #7 has been turned back on. No adjustment to the price (still asking $850,000) and now an official 186 days on the market (but we'll call it 185).

∙ A Pacific Heights Apple Up In The Tree: 2155 Buchanan #9 [SocketSite]
∙ Another Shot At A Ripening Pacific Heights Apple: 2155 Buchanan #9 [SocketSite]
∙ San Francisco Rental Market Weakness: SocketSite Readers Report [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (18) | (email story)

Grand Opening Liquidation Sale: Signs Of The Times And SF Freeze?

A plugged-in tipster captures the seemingly oxymoronic "Grand Opening Liquidation Sale" sign adorning Bamboo Colony at the base of Potrero Hill. The tipster’s succinct subject line: “It's gonna be a deeeep freeze” [in San Francisco].

UPDATE: A plugged-in reader sets the record straight:

This is just a marketing gimmick. I live close by and I have gone to that store a few times (they carry some decent stuff) and asked about the sign and if they are closing shops. They aren't. They have been opened for a couple of months and they keep getting more furniture every time I go in. The sign has always been there.

As such we're scratching our "signs of the times" designation, but standing behind our tipster's first thought.

Posted by socketadmin at 8:45 AM | Permalink | Comments (30) | (email story)

San Francisco Rental Market Weakness: SocketSite Readers Report

From a plugged-in reader with respect to San Francisco’s rental market:

I do consulting and building inspections for major lenders for commercial properties (apartment buildings over 6 units are considered commercial in SF), and last week I did on site inspections of 8 properties owned by a major SF rental player.

All of the building managers told me that they are not getting any responses at all to new units listed, versus the outlandish amount of emails and phone calls they would receive just a few months back for these same buildings.

These include studios for around $1500 and 1 bedrooms for $1800+, in areas as diverse as Mission, Hayes Valley, and Nob Hill.

The anecdotes are quickly starting to add up. And once again, we expect to see San Francisco rents fall throughout 2009 putting further downward pressure on local housing values as "(E)arnings" fall.

∙ A Rental Market Anecdote From A Plugged-In San Francisco Hipster [SocketSite]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]
∙ Bay Area Rents Surge, But Housing P/E Ratio Remains Out Of Line [SocketSite 1/08]

Posted by socketadmin at 8:00 AM | Permalink | Comments (69) | (email story)

February 20, 2009

A Rental Market Anecdote From A Plugged-In San Francisco Hipster

From a plugged-in hipster’s comment:

I have rentals in SF and though it's still pretty easy to fill a vacancy here, the prices are softening. I just re-rented a condo in the [Mission] for $2450 (was getting 2600 before).

Cue our rebuttal to the Marcus & Millichap rental outlook (and our overall outlook as well).

∙ San Francisco Recorded Sales Activity In January: Down 21.8% YOY [SocketSite]
∙ Marcus & Millichap San Francisco Rental Outlook (And Quick Rebuttal) [SocketSite]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (116) | (email story)

February 19, 2009

San Francisco Recorded Sales Activity In January: Down 21.8% YOY

According to DataQuick, recorded home sales volume in San Francisco fell 21.8% on a year-over-year basis last month (229 recorded sales in January ’09 versus 293 sales in January ‘08) and fell 37.4% compared to the month prior. San Francisco once again experienced the sharpest year-over-year decline in sales volume of any Bay Area county last month with Marin the only other county recording a decline (down 7.5% YOY).

San Francisco's median sales price in January was $562,000, down 24.5% compared to January ’08 ($744,000) and down 8.8% compared to the month prior.

For the greater Bay Area, recorded sales volume in January was up 40.8% on a year-over-year basis but fell 26.7% from the month prior (5,050 recorded sales in January '09 versus 3,586 in January ’08 and 6,889 in December '08), while the recorded median sales price fell 45.5% on a year-over-year basis, down 9.1% compared to the month prior.

Once again, think foreclosures and mix.

At the county level, foreclosure resales last month ranged from 16.4 percent of resales in San Francisco to 75.2 percent in Solano County. In the other seven counties, January foreclosure resales were as follows: Alameda, 51.9 percent; Contra Costa, 64.4 percent; Marin, 26.2 percent; Napa, 48.1 percent; Santa Clara, 45.6 percent; San Mateo, 34.1 percent; Sonoma, 55.6 percent.

At the extremes, Solano recorded a 126.7% year-over-year increase in sales volume (a gain of 313 transactions) on a 44.6% decrease in median sales price, while Contra Costa recorded a 99.9% increase in sales volume (a gain of 666 transactions) on a 52.5% drop in median sales price.

As always, keep in mind that DataQuick reports recorded sales (versus listed 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 top last year again; median drops to $300K [DQnews]
∙ San Francisco Recorded Sales Activity In December: Down 17.8% YOY [SocketSite]
∙ Early January Listed Sales Results For San Francisco: Down 34% [SocketSite]

Posted by socketadmin at 10:50 AM | Permalink | Comments (75) | (email story)

February 18, 2009

The Great Rate Update: What’s The Point Of A Point?

A rate update from Julian Hebron at RPM Mortgage:

Zero-points rates on conforming loans up to $417k and super-conforming loans up to $625,500 have improved to start this week as stocks have sold off and mortgage bonds have rallied—when bond prices rise in a rally, yields (or rates) drop. With the government participating in mortgage bond markets, lenders are pricing more conservatively than market levels might suggest because it’s harder than ever to predict which way markets will move. So we continue to see favorable terms on points: one point gets .625% to .875% lower in rate, so borrowers break even on a one-point buydown in 12-18 months.

And rough 30-year rates with said single point:

Conforming - 4.875% (5.09% APR)
Super-Conforming - 5.375% (5.52% APR)
Jumbo - 6.625 % (6.83% APR)

Posted by socketadmin at 12:00 PM | Permalink | Comments (11) | (email story)

The Slightly Altered Sign Of 161-165 Collingwood (And The Times)

A plugged-in tipster with camera in tow captures the slightly altered sign for 161-165 Collingwood (and of the times). Let's keep the candids coming (tips at socketsite.com).

∙ Perhaps It’s Time For The Hard Stuff: 161-165 Collingwood Cuts Again [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (21) | (email story)

February 17, 2009

SocketSite's San Francisco Listed Housing Update: 2/17/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco rose 13% over the past two weeks (versus an average of 1.7% for the same two weeks over the previous three years) and is now running 29.5% higher on a year-over-year basis (up 14.3% for single-family homes and 40.5% for condos/TICs).

Overall listed inventory is up 83% versus February of 2006 while listed sales have continued to trend down (a 49% drop in January versus 2006). Keep in mind that "listed" (or MLS based) inventory counts do not include the vast majority of units in new developments about town and neither do "listed" sales.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 2/02/09 [SocketSite]
∙ Early January Listed Sales Results For San Francisco: Down 34% [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (81) | (email story)

February 13, 2009

An "Exciting New Price" (And Club Initiation) For 3577 Pacific Avenue

Touting an “Exciting new price!” of $5,995,000, the newly renovated 3577 Pacific Ave has just joined our quickly growing high-end million dollar cut club.

That’s assuming you count the three days at which it was originally listed for $7,700,000 (now 22% lower). If not, it’s now only $955,000 (14%) under its last price of $6,950,000.

UPDATE: And from a plugged-in reader, the full floor plan monty (pdf).

∙ Listing: 3577 Pacific Avenue (6/4) - $5,995,000 [MLS]
∙ 4552 19th Street Joins The High-End Half Million Dollar Cut Club [SocketSite]
∙ 3577 Pacific: Inside Its Newly Contemporary Soul (And Market's Mind) [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (23) | (email story)

February 12, 2009

Early January Listed Sales Results For San Francisco: Down 34%

Based on an early count of 142 sales of listed single-family homes, condos and TICs in January, sales volume in San Francisco has dropped 34% on a year-over-year basis (versus a 13% drop from 2007 to 2008), and is down around 60% from four years before.

At the same time, inventory of listed and available single-family homes, condos and TICs is up 20% on a year-over-year basis (versus a 32% increase from 2007 to 2008) and is up 58% over the past two.

In terms of months of listed supply on the market at the end of January, in 2007 the count was 3.4 while in 2009 it was 9.4. Keep in mind, however, that January typically marks the seasonal low point for sales activity and sales counts should climb over the next five months (and at a faster pace than inventory).

CORRECTION: As a plugged-in reader correctly notes, we originally miskeyed the current January 2009 sales count as 162 (corrected above and throughout as 142). We’re triple checking everything else.

∙ SocketSite's San Francisco Listed Housing Update: 2/02/09 [SocketSite]
∙ San Francisco Recorded Sales Activity In December: Down 17.8% YOY [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (83) | (email story)

4552 19th Street Joins The High-End Half Million Dollar Cut Club

With a $300,000 cut late yesterday, the recently renovated 4552 19th Street in District 5 joins the high-end million dollar (and over 30%) price cut club. Now asking $2,999,000 or $1,300,000 less than what was expected in October.

Also reduced late yesterday, 3271 Baker Street is now listed for $2,275,000. Hitting the market last July asking $3,395,000, expectations for the recently renovated (hmm...) Marina home have been lowered by $1,120,000 or 33% over the past seven months.

Keep in mind that MLS based industry reports on the state of the San Francisco real estate market now reflect 33 days on the market and a 12% drop from its "original" list price of $2,595,000 in January for 3271 Baker Street.

But hey, what’s six months, $800,000 and 20% between friends?

∙ Listing: 4552 19th Street (6/4.5) - $2,999,000 [MLS] [4552-19thst.com]
∙ Listing: 3271 Baker Street (4/2.5) - $2,275,000 [3271bakerstreet.com]
∙ 4552 19th Street Joins The High-End Half-Million Dollar Cut Club [SocketSite]
∙ Spanish/Mediterranean Flair From Traditional To Modern: 3271 Baker [SocketSite]
∙ Less Great Expectations: 3271 Baker Drops Its New Year Asking 24% [SocketSite]

Posted by socketadmin at 6:30 AM | Permalink | Comments (43) | (email story)

February 11, 2009

Homeowners In The West "Now Nine Percent Less Delusional!"

While we don’t buy into Zillow’s analytics as accurate measures of any reality (or realty), we can’t argue with the results of their surveys on perception. A recap of their second-quarter 2008 survey of homeowners in the West:

My Home's Value Has Increased Over Past Year: 28%
My Home's Value Has Decreased Over Past Year: 56%
My Home's Value Has Stayed the Same Over Past Year: 16%

And from the fourth-quarter:

My Home's Value Has Increased Over Past Year: 19% (-9% from Q2)
My Home's Value Has Decreased Over Past Year: 70% (+14% from Q2)
My Home's Value Has Stayed the Same Over Past Year: 11% (-5% from Q2)

∙ Perhaps An Apple A Day Would Keep Their Delusions Away... [SocketSite]
∙ Zillow Homeowner Confidence Survey: Q4 2008 [Zillow]
∙ Luckily The Sellers Weren't Looking At Their "Zestimate" [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (22) | (email story)

February 9, 2009

JPMorgan Chase’s Jumbo Mortgage Performance And Default Forecast

Highlights of JPMorgan’s latest forecast for Jumbo mortgage performance and defaults:

Losses on so-called hybrid adjustable-rate mortgages backing 2006 and 2007 prime-jumbo securities will reach 8 percent to 10 percent…Losses on prime-jumbo mortgages with completely fixed rates in “recent vintage” bonds will be lower than losses on hybrid ARMs [as] faster prepayments could prevent many future defaults, keeping losses in the 2 percent range, a decrease from last month’s 2.3 percent to 2.8 percent...The share of Alt-A mortgages underlying bonds at least 60 days late, in foreclosure or already turned into seized properties climbed 1.53 percentage points last month to 22.88 percent [while] Defaults on so-called option ARMs rose 2.47 percentage points to 30.96 percent.

∙ JPMorgan Doubles Prime-Jumbo Mortgage Loss Projection [Bloomberg]

Posted by socketadmin at 10:30 AM | Permalink | Comments (10) | (email story)

February 6, 2009

Office Space For Sublease And Unemployment Up In San Francisco

From J.K. Dineen at the San Francisco Business Times with respect to office space:

San Francisco tenants unloaded another 250,000 square feet of unwanted office space onto the market in January, as employers slashed workers and pushed to generate sorely needed cash by subleasing floors in Class A downtown towers.

Companies adding to the avalanche of available sublease space include Charles Schwab, which said Jan. 30 that it would cut 500 to 600 jobs in the first quarter. Schwab is seeking a subtenant for 80,000 square feet at the 1 Montgomery Tower. Also in that building, Thomas Weisel Partners Group is looking to sublease 20,000 square feet on the 35th floor, billed as a “high-end build out with panoramic views.” Other chunks of sublease space coming available include 15,639 square feet of brand-new space at the just completed 555 Mission St. being subleased for $48 a square foot by law firm DLA Piper, and the entire 22nd floor of 345 California St., former UBS space that Cushman & Wakefield is looking to lease for five years at a rock-bottom $27 a square foot.

And with respect to San Francisco unemployment:

The number of unemployed San Francisco residents grew by 10,300 in the fourth quarter of 2008 to 29,500, according to Ted Egan, chief economist for the City of San Francisco. In spite of the fourth-quarter increase, Egan pointed out that the 10,000 jobs eliminated during the final three months of 2008 came in dribs and drabs rather than the sort of en masse layoffs announced in recent days by Charles Schwab and Macy’s, which announced 1,400 San Francisco layoffs on Feb. 1. A loss of 2 million square feet of occupied space equals about 10,000 workers.

“Now we are starting to see major layoffs from major employers,” said Egan. “This is the sign of the recession coming to San Francisco.”

∙ Quarter-million square feet added to S.F. sublease glut [Business Times]
∙ Jones Lang LaSalle Office Outlook For San Francisco And The Valley [SocketSite]
∙ A Virtual Tour Of 555 Mission Street (And Downtown San Francisco) [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (1) | (email story)

The Good News: Stock Futures Rise. The Bad News: The Reason Why.

The good news, U.S. stock futures rose last night. The bad news, the reason why:

U.S. stock-index futures advanced on speculation a government report showing the highest unemployment rate since 1992 will force Congress to pass an economic stimulus package.

∙ U.S. Stock Futures Rise on Optimism Jobs Data to Spur Stimulus [Bloomberg]
∙ U.S. Jobless Rate Soars as Payrolls Plunge by 598,000 [Bloomberg]

Posted by socketadmin at 6:45 AM | Permalink | Comments (7) | (email story)

February 5, 2009

JustQuotes: A Safe Place To Discuss And Debate Mortgage Rates

"The average U.S. rate on a 30-year fixed mortgage rose this week, thwarting Federal Reserve efforts to cut borrowing costs, on investor concern the government will increase spending. The fixed rate increased to 5.25 percent from 5.10 percent last week...The 15-year fixed rate jumped to 4.92 percent from 4.8 percent."

∙ Fixed Mortgage Rate Rises to 5.25%, Freddie Mac Says [Bloomberg]

Posted by socketadmin at 12:00 PM | Permalink | Comments (28) | (email story)

Jones Lang LaSalle Office Outlook For San Francisco And The Valley

The Jones Lang LaSalle outlook for office space in San Francisco:

Downsizing companies paired with sluggish tenant demand will cause downward pressure on rental rates to gain momentum in 2009. Rising vacancy rates, barring an unexpectedly rapid recovery, market fundamentals in 2009 will be downward trending as negative net absorption is expected.

Maturing debt, constrained lending and depreciated asset values will place a number of San Francisco building owners in jeopardy of default, forcing recapitalization or distressed sale transactions. This should present attractive opportunities for buyers with significant pools of equity financing.

And for Silicon Valley:

Although the outlook for the Silicon Valley is grim, the general consensus is that the market is well positioned to weather this downturn. During the tech wreck, the Silicon Valley lost over 231,000 jobs or nearly 21 percent of its workforce. Preliminary estimates have the valley shedding up to 26,000 positions in 2009.

∙ North America Office Report – Q4 2008 (pdf) [joneslanglasalle.com]
∙ Pro Forma Problems: Find Commercial, Replace With Residential? [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (8) | (email story)

February 3, 2009

QuickLinks Headline Triptych: And So It Goes In San Francisco

∙ U.S. Consumer Spending Falls for Sixth Straight Month [Bloomberg]
∙ Macy’s to lay off 1,400 at S.F. headquarters [Business Times]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 11:45 AM | Permalink | Comments (37) | (email story)

The Unfinished Façade Of 77 Van Ness (And Its 56 Residential Units)

While the façade isn’t quite finished the scaffolding is down from around 77 Van Ness. Once again, it’s 56 potential condos and 21,000 square feet of commercial/retail for lease, but considering the fate of Argenta and Artani perhaps 56 new rental units instead.

∙ 77 Van Ness Rising (And Our Request For A Rendering) [SocketSite]
∙ Argenta's Confirmed And Artani's Rumored, Will 77 Van Ness Be Next? [SocketSite]
∙ The Scoop: Argenta (1 Polk) On The Market As An Apartment Building [SocketSite]
∙ The SocketSite Scoop And Rumor Confirmed: Artani Suspending Sales [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (7) | (email story)

February 2, 2009

SocketSite's San Francisco Listed Housing Update: 2/02/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco rose 11.6% over the past two weeks and is running 19.8% higher on a year-over-year basis (up 8.3% for single-family homes and 28.5% for condos/TICs).

Overall inventory is up 65% versus 2006 while sales continue to trend down.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 1/21/09 [SocketSite]
∙ San Francisco Recorded Sales Activity In December: Down 17.8% YOY [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (21) | (email story)

January 30, 2009

Eviction Moratorium Extended And Freddie Becomes A Landlord

"Freddie Mac and Fannie Mae, the mortgage-finance companies under federal control, are extending by one month a freeze on evictions for homeowners in foreclosure as delinquencies soar in a slumping economy.

Freddie, the second-largest source of U.S. home loan money, said it will now allow renters in homes the company has repossessed to remain using monthly leases at market rates. Homeowners who have lost their houses to foreclosure can also rent the properties back from the company at market rates, McLean, Virginia-based Freddie said today in a statement."

∙ Freddie, Fannie Extend Eviction Freeze Until March [Bloomberg]
∙ Actual San Francisco Foreclosures Down 42% QOQ (Up 70% YOY) [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (23) | (email story)

January 29, 2009

JustQuotes: Damn Those Bad News Bloomberg “Bears”

“Prospects for an economic recovery this year dimmed after reports today showed new-home sales collapsed, durable-goods orders slumped and a record number of Americans collected unemployment benefits.” Huh.

∙ U.S. Economy: Sales of New Homes, Durable Goods Orders Tumble [Bloomberg]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 9:30 AM | Permalink | Comments (26) | (email story)

January 28, 2009

JustQuotes: A First (And Second Zero) For The Fed, Not SocketSite

"The Federal Reserve left the benchmark interest rate as low as zero, said it’s prepared to purchase Treasury securities to resuscitate lending and warned inflation may recede too quickly."

“Deflation is an increased worry,” said William Ford, a former Atlanta Fed chief who’s now at Middle Tennessee State University in Murfreesboro. “They have switched from worrying about inflation to being focused on deflation. It is the first time they have talked about that in a straightforward way.”

∙ Fed Keeps Rate Near Zero, Prepared to Buy Treasuries [Bloomberg]
∙ Did Somebody Say Deflation? [SocketSite]
∙ Promoted From Comment To Post: Satchel Does Deflation [SocketSite]

Posted by socketadmin at 2:45 PM | Permalink | Comments (43) | (email story)

Actual San Francisco Foreclosures Down 42% QOQ (Up 70% YOY)

Bay Area Notices of Default (NODs) fell 12% on a year-over-year basis in the fourth quarter of 2008, down 9.6% in San Francisco proper (from 353 to 302). And while the number of new NODs in San Francisco also fell 25% from the third quarter, the lead time changing state law took effect in September is likely to still be skewing the comparisons.

At the same time, actual Bay Area foreclosures rose 68% year-over-year (from 4,573 to 7,677) with Contra Costa (up 48% to 2,310), Alameda (up 64% to 1,681) and Santa Clara (up 120% to 1,347) leading the way with respect to volume.

Fourth quarter recorded foreclosures in San Francisco totaled 112, up 70% on a year-over-year basis but down 42% (80 homes) from the third quarter 2008. Think aforementioned state law (reducing the number of pipeline foreclosures) and last month's foreclosure moratorium by Fannie Mae and Freddie Mac (which was extended through January 31).

Most of the loans that went into default last quarter were originated between October 2005 and January 2007 [versus October 2005 to February 2007 last quarter]. The median age was 29 months, up from 21 months a year earlier.

We continue to move from those who were simply undercapitalized to begin with to those who had a bigger cushion in the bank.

∙ Temporary Drop in California Foreclosure Activity [DataQuick]
∙ Actual San Francisco Foreclosures Up 36% QOQ (191% YOY) [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (54) | (email story)

January 27, 2009

SocketSite’s Residential Real Estate Outlook For 2009

We currently see across the board weakness in San Francisco’s residential real estate market throughout 2009 as economic woes compound the impact of tighter credit markets and a shift in market psychology.

Downturns in residential real estate have traditionally been triggered by a downturn in either the local or national economy. The reality which we’ve foreshadowed for quite some time is that the majority of the current market weakness in San Francisco, the Bay Area, and beyond has been driven by a contraction in the credit markets (the deflation of a credit bubble) and a recent shift in market psychology (the deflation of a speculative bubble). The real impact of a weakening economy is yet to come.

With an economy that generally lags the financial markets by nine to twelve months, the full brunt of October’s melt-down won’t be felt for at least another six months. And we expect to see continued weakness in both consumer and corporate spending over at least the next couple of quarters which will further depress corporate earnings and likely lead to additional layoffs and stoke the real real estate killer, unemployment.

With no discernable recovery in sight, we expect the financial market’s destruction of wealth both real (investments) and potential (options) to continue to drag down the San Francisco residential market throughout 2009, and to weigh particularly heavy on the luxury market.

Historically low interest rates will continue to benefit those who buy, but we don’t see rates alone significantly driving demand in San Francisco, or at least not offsetting the decrease in demand due to stricter lending standards and the loss in wealth. And the supply and absorption of new inventory will continue to put downward pressure on housing throughout the city, and not just District 9 as a limited number of active buyers are drawn from other parts of the city by unemotional (well, for the most part...) developer price cuts.

We believe the real estate flight to quality we called two years ago, and up until recently provided support to the upper end of the market, is waning. And value (versus growth) is the new darling of the ball. Oh, and that rents in San Francisco will fall (further challenging values on a fundamental basis).

Our outlook has nothing to do with emotion (other than with respect to acknowledging the psychological shift in the market). And it’s not to suggest that we don’t see any opportunities, especially when it comes to adding real value. It’s simply perspective to help manage expectations and actions (be it in buying, selling, renting or staying put).

And yes, while we are currently bearish on the market in the near-term, we’ll be the first to point out the real bullish signs. As defined by analysts, not sales agents or the industry.

Posted by socketadmin at 7:30 AM | Permalink | Comments (89) | (email story)

November S&P/Case-Shiller: San Francisco MSA Down, Rate Levels

According to the November 2008 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 3.0% from October ’08 to November '08 and are down 30.8% year-over-year (down 31% in October). For the broader 10-City composite (CSXR), year-over-year price growth is down 19.1% (having fallen 2.2% from October).

All 20 metro areas, and the two composites, posted their third consecutive monthly decline. In addition, eight of the MSAs posted their largest monthly decline on record – Atlanta, Boston, Charlotte, Chicago, Dallas, New York, Portland and Seattle. Although in decline over the past few years, some of these regions have out-performed on a relative basis, when compared to the national average. It is clear, however, that the decline in home prices is affecting all regions regardless of geography or employment opportunities.

Condo values in the San Francisco MSA also continued their decline falling 2.7% from October ’08 to November '08, down 19.2% on a year-over-year basis and down 22.0% from an October 2005 high.

And San Francisco MSA single-family home prices once again fell across all three price tiers.

The bottom third (under $342,467 at the time of acquisition) fell 2.2% from October to November (down 40.2% YOY); the middle third fell 1.6% from October to November (down 26.9% YOY); and the top third (over $591,729 at the time of acquisition) fell 1.9% from October to November (down 14.6% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have retreated to December 2000 levels, the middle third has returned to February 2003 levels, and the top third has fallen to June 2004 levels.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA) and are imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best).

∙ Home Price Declines Continue/Home Prices Indices Set New Record Annual Declines [S&P]
∙ October S&P/Case-Shiller: San Francisco MSA Down Across The Board [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (84) | (email story)

January 26, 2009

JustQuotes: Remember That "Positive" Sales Surprise? Surprise!

"Fannie Mae, the largest source of home-loan money in the U.S., said it will need to tap as much as $16 billion in emergency funds from the U.S. Treasury Department to stay afloat as deterioration in the housing market persists.

Fannie’s planned request, announced today, follows Freddie Mac, which said Jan. 23 that it will need as much as $35 billion more in federal aid. Unprecedented mortgage losses drove the net worth of both companies below zero last quarter, they said in separate securities filings."

∙ Fannie to Tap U.S. for as Much as $16 Billion in Aid [Bloomberg]
∙ U.S. Existing Home Sales Rise on Record Price Slump [Bloomberg]

Posted by socketadmin at 6:30 PM | Permalink | Comments (6) | (email story)

January 23, 2009

An Apple In The "Heights" Of Our Tree: 3444 Washington Reduced

From a plugged-in Sleepiguy when the rather handsome 3444 Washington hit the market last May asking $17,500,000: “This property sold a couple of years ago for 16.5 million.”

From the MLS today: now asking $15,750,000 with an "official" one day on the market.

UPDATE: It appears as though sleepiguy (or his agent) might have been thrown by an asterisk. From a plugged-in FSBO:

MLS shows the 1/31/2006 sale price as $16.5M with an *. Current assessed value is $15.8M - so the actual sale price was probably about $15.2M or so...

Cheers. And something tells us we’ll see another one when this sells (asterisk that is).

∙ Listing: 3444 Washington Street (6/6.5) - $15,750,000 [MLS]
∙ It's Not Often A Listing Can Tout A Private Outdoor Amphitheater [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (26) | (email story)

January 22, 2009

It's Bigger Than Google But Not A Bad Starting Point (And Relevant)

The biotech discussion was too far along to parse it from the rest of the Palms discussion, but we will redirect a reader's no comment comment about Google:

No comments about Google today? Weird. It seems that for every company on the ropes there is at least one that is doing ok. How did they do it? Can they continue?

Also appears that a lot of companies in the valley, like Google, are taking steps to actually retain employees instead of shed them (option repricing). Although that usually resets the vesting period it can still do a lot for morale. Thoughts?

∙ A SoMa/Palms Wake Up Call (And Apple): 555 4th Street #401 [SocketSite]
∙ Google Profit Tops Estimates as Web-Ad Sales Rise [Bloomberg]
∙ The Google Chart Of The Day (And A Bit More Foreshadowing) [SocketSite]

Posted by socketadmin at 2:40 PM | Permalink | Comments (51) | (email story)

A SoMa/Palms Wake Up Call (And Apple): 555 4th Street #401

From a reader’s comment on our topic of the Palms (555 4th Street) in July:

So now there are a fair number of 2/2's in Soma for the 600's. Wake me up when we hit the 500's.

Last week 555 4th Street #401 closed escrow with a reported contract price of $599,900 (that's "high $500’s" in sales speak). A 938 square foot two-bedroom/bath condo with parking at the Palms, unit #401 was purchased in October of 2006 for $779,000, returned to the market a year later seeking $850,000, and was asking $674,900 when it closed [see UPDATE below].

That's an apples to apples drop in value of 23% over the past two and one-quarter years, or average annual depreciation of 11%. Are we awake?

UPDATE: Additional color from a plugged-in reader:

FYI, this unit was indeed an REO. Did anyone see it? I did. The guy that was foreclosed on freaked out, ripped out all the kitchen appliances and sold them on craigslist. Nice Bosch appliances, pick 'em up cheap! At $599,900 the unit was actually a pretty good deal, however if the buyer had waited it out a bit I'm sure it would have come down some more. The price had actually been reduced to $599,900, so it sold at asking.

The line from the listing: "Need minor cosmetic works." (Misplaced "s" theirs not ours.)

∙ The Palms (555 4th St.): Secondary Market Slowdown And Short Sale [SocketSite]
∙ The Palms Finds More Inventory And A Resale Hits The Market [SocketSite]

Posted by socketadmin at 5:00 AM | Permalink | Comments (55) | (email story)

January 21, 2009

San Francisco Recorded Sales Activity In December: Down 17.8% YOY

According to DataQuick, home sales volume in San Francisco fell 17.8% on a year-over-year basis last month (366 recorded sales in December ’08 versus 445 sales in December ‘07) but rose 7.6% compared to the month prior. San Francisco once again recorded the sharpest year-over-year decline in sales volume of any Bay Area county last month with Marin a close second (down 14.5% YOY).

San Francisco's median sales price in December was $616,500, down 15.7% compared to December ’07 ($731,000) and down 4.9% compared to the month prior.

For the greater Bay Area, recorded sales volume in December was up 36% on a year-over-year basis and rose 19.7% from the month prior (6,889 recorded sales in December '08 versus 5,065 in December ’07 and 5,756 in November '08), while the recorded median sales price fell 43.8% on a year-over-year basis, down 5.7% compared to the month prior.

Once again, think foreclosures and mix.

Homes that were foreclosed on accounted for 50.0 percent of December's resale activity, up from 46.8 percent in November, and up from 14.0 percent for December a year ago. Foreclosure resales ranged from 12.4 percent in San Francisco last month to 67.7 percent in Solano County.

At the extremes, Solano recorded a 103.6% year-over-year increase in sales volume (a gain of 373 transactions) on a 42.3% decrease in median sales price, while Contra Costa recorded a 84.1% increase in sales volume (a gain of 817 transactions) on a 50% drop in median sales price.

And 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).

∙ Bargain hunting dominates Bay Area home sales in December [DQNews]
∙ San Francisco Recorded Sales Activity In November: Down 29% YOY [SocketSite]

Posted by socketadmin at 11:04 AM | Permalink | Comments (108) | (email story)

SocketSite's San Francisco Listed Housing Update: 1/21/09

Inventory of Active listed single-family homes, condos, and TICs in San Francisco rose 6.1% over the past three weeks and is running 12.9% higher on a year-over-year basis (53% higher versus 2006).

That being said, the plugged-in word on the street is that a significant number of uncounted pocket listings are being circulated (especially in District 7) as agents test the new new market's waters. And as one plugged-in agent notes, only those homes that have to sell are listed right now (something to keep in mind if you’re making an offer).

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 12/29/08 [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (49) | (email story)

Marcus & Millichap San Francisco Rental Outlook (And Quick Rebuttal)

The Marcus & Millichap rental outlook for 2009 in San Francisco: rents up 3.3% on 400 new units in professionally managed apartment buildings with at least 20 units.

Our comment (at the risking of stealing a bit of our own outlook thunder): we believe Marcus & Millichap is significantly underestimating both the number and impact of "shadow” market units for rent in San Francisco (which they deem to be “barely a factor”) as well as the effective number of new units for rent that will hit the market in 2009.

∙ Bay Area rental market gives tenants an edge [SFGate]

Posted by socketadmin at 8:15 AM | Permalink | Comments (39) | (email story)

January 20, 2009

JustQuotes: While Treasury Rates Drop, Risk Premiums Rose

"Thirty-year, fixed-rate mortgages averaged 4.96 percent last week, according to McLean, Virginia-based mortgage finance company Freddie Mac, or 2.64 percentage points more than 10-year Treasuries. Before the credit markets began to seize up in the second half of 2007, the difference averaged about 1.78 percentage points since the start of the decade."

∙ Treasury Yields Flattened as Fed Fights to Cut Mortgage Rates [Bloomberg]
∙ That TED Sure Is A Funny Fellow (And Worth Keeping An Eye On) [SocketSite]

Posted by socketadmin at 8:15 AM | Permalink | Comments (51) | (email story)

January 16, 2009

Cash Flows Catch Up To The Lembi Group

Over the past two weeks 51 San Francisco apartment buildings which had been acquired by the Lembi Group were deeded back to the bank in lieu of foreclosure. The bundle of 1,500 apartments had been losing $3 million a month.

∙ Lembi gives 51 buildings back to UBS [Business Times]

Posted by socketadmin at 7:45 AM | Permalink | Comments (71) | (email story)

January 14, 2009

One Rincon Hill (425 First Street): Rental Market Stumbling As Well?

Following in the footsteps of its “massive price reduction!!!” in December (originally asking $1,399,000, currently asking $999,900), the asking rent for 425 1st Street #1802 has been reduced to $4,200 per month as well (once asking $5,250).

Don’t forget to update those assumptions on your valuation/rent versus buy worksheets.

∙ One Rincon Hill (425 First Street): Secondary Market Stumbles [SocketSite]
∙ Listing: 425 1st Street #1802 (2/2) - $999,900 [MLS]
∙ $4200 / 2br - PRIME VIEW AT ONE RINCON HILL - RENT REDUCED [Craigslist]
∙ Four Floors Lower, But Asking One Hundred And Fifty Thousand Less [SocketSite]

Posted by socketadmin at 8:45 AM | Permalink | Comments (104) | (email story)

January 13, 2009

That TED Sure Is A Funny Fellow (And Worth Keeping An Eye On)

"The difference between the London interbank offered rate, or Libor, that banks say they charge each other for three-month loans in dollars and the yield on the three-month Treasury bill, fell 12 basis points to 98 basis points today. The so-called TED spread last closed below 100 basis points Aug. 15. Dollar Libor dropped to 1.09 percent today, the lowest level since June 2003."

"The three-month dollar Libor is still 84 basis points above the Federal Reserve’s target, compared with an average of 12 basis points in the year before the crisis began. The spread was 332 basis points on Oct. 10, less than a month after the collapse of Lehman Brothers Holdings Inc."

∙ TED Spread Narrows to Least in Five Months as Credit Eases [Bloomberg]

Posted by socketadmin at 7:15 AM | Permalink | Comments (2) | (email story)

January 12, 2009

Less Great Expectations: 3271 Baker Drops Its New Year Asking 24%

As we first wrote about 3271 Baker when it hit the market six months ago (and was staged a bit differently):

While the stucco, tiles, wrought iron railings, doorways, beamed ceilings and wooden trim of both the overhauled façade and second floor of 3271 Baker Street are all true to the traditional Spanish/Mediterranean ethos of the house, the new first floor master suite is a bit more Ibiza (and the kitchen Italian).

And for the record, we’re not complaining (about either the suite, the island or Italy).

Asking $3,395,000 ($1,125 per square foot) in 2008, asking $2,595,000 ($860 per square foot) today. And yes, "two days" on the market (at least according to those MLS reports).

∙ Listing: 3271 Baker Street (4/2.5) - $2,595,000 [3271bakerstreet.com] [MLS]
∙ Spanish/Mediterranean Flair From Traditional To Modern: 3271 Baker [SocketSite]

Posted by socketadmin at 4:15 AM | Permalink | Comments (117) | (email story)

Pro Forma Problems: Find Commercial, Replace With Residential?

From J.K. Dineen at the San Francisco Business Times:

Downtown San Francisco’s weakest year for commercial real estate since 2001 ended with a whimper, with the central business district losing another 1.3 million square feet of occupied space in the fourth quarter of 2008.

For the year, San Francisco’s “negative absorption” — the sum of both space vacated and empty new square footage coming on line — topped 2 million square feet, according to end of the year reports from CB Richard Ellis.

The deluge of newly available office space drove taking rents — the amount that tenants actually pay for space they agree to occupy — down by almost 25 percent, according to an analysis Colliers International did of 93 leases completed in the fourth quarter. The gap between what office landlords are asking and what tenants are willing to pay is widening, according to James Bennett of GVA Kidder Mathews.

“You have a lot of newcomers to the market who bought buildings at astronomical prices who are now having to stomach the fact that their pro forma rents are not going to materialize,” said Bennett. “It will be interesting to see how those owners respond to the down market.”

We're still talking commercial, right?

∙ S.F. tenants pour more space onto market [San Francisco Business Times]

Posted by socketadmin at 4:00 AM | Permalink | Comments (11) | (email story)

January 7, 2009

San Francisco’s “2008 Luxury Tour” Scorecard To Date: No Sales

From ABC's Nightline last night: "Herding the ‘White Elephants': A look at how hard unloading a mega-mansion has become in today’s economy." Shockers. At least to those who aren't plugged-in...

Posted by socketadmin at 7:15 AM | Permalink | Comments (58) | (email story)

Bay Area Notices Of Default: Another Source, The Same Story

"Notices of defaults (the first step in the foreclosure process) and notices of trustee sales (which often but don't always lead to actual foreclosures) reached 525,356 in 15 California counties last year, reported [Default Research Inc]. In the Bay Area counties of Alameda, Contra Costa, San Francisco and Solano, the annual total climbed 180 percent to 85,381."

∙ Report says foreclosures, defaults up in 2008 [SFGate]

Posted by socketadmin at 6:15 AM | Permalink | Comments (4) | (email story)

January 6, 2009

But Hey, What's The Bay Area Economy Have To Do With Real Estate?

"For all of 2008, just six venture-backed companies made their public debut, the worst showing since 1977 when there were also just six VC-backed companies that went public. Preliminary figures show just 260 M&A transactions last year, the first year since 2003 that were less than 300 venture-backed acquisitions.

Venture capitalists unable to cash in on their investments spells big trouble for the entire venture community and the broader Bay Area economy. The venture business is an engine of growth in the Bay Area, which traditionally gets about a third of all venture dollars invested."

∙ Venture-backed IPOs last year hit 30-year low [San Francisco Business Times]
∙ Sequoia’s Take On The New New (And Quite Local) Economy [SocketSite]
∙ From Underwater To Unemployed (And Sorry, But It’s Just Starting) [SocketSite]

Posted by socketadmin at 6:45 AM | Permalink | Comments (110) | (email story)

A Six And One-Half Year District 5 Single-Family Apple On The Tree

Sporting a bit of a sweet deco vibe in the living room, 444 Douglas is back on the market and asking $1,295,000. Purchased for $1,100,000 in August of 2002, a sale at asking would represent average annual appreciation of 2.6% over the past six and one-half bull market years for this solid single-family home in San Francisco's real estate District 5.

And while the sale for $1,100,000 in 2002 closed just 13 months after purchasing the property for $860,000 in 2001, do keeping mind that a bathroom was remodeled, rooms were renovated, and the foundation was bolted in between. But once again, we can't recall anybody discussing the measured appreciation over such short holding periods as being anything but representative of the market at the time (as it was and still is).

∙ Listing: 444 Douglass (3/2.5) - $1,295,000 [MLS]

Posted by socketadmin at 6:30 AM | Permalink | Comments (70) | (email story)

JustQuotes: Can You Say Risk/Default Premium?

"Federal Reserve officials are focused on driving down the spreads between U.S. Treasury yields and consumer and corporate loans, after cutting the main interest rate to almost zero failed to revive lending.

Credit costs for households and businesses haven’t followed yields on government debt lower. Fifteen-year fixed-rate mortgages were at 5.06 percent last week, 2.59 percentage points above 10-year Treasury yields; the spread averaged 0.88 point in 2003, when the Fed slashed rates to 1 percent."

∙ Fed Focuses on Consumer, Corporate Rate Spreads Over Treasuries [Bloomberg]

Posted by socketadmin at 5:00 AM | Permalink | Comments (7) | (email story)

January 5, 2009

Mortgage Rate And Driver(s) Update: January 5, 2009

A quick mortgage rate update from Julian Hebron at RPM mortgage:

Rates open the first full week of the year about the same as they were leading into the holidays. A good 30yr fixed rate target for loans up to $417k is 5% or below, and the target for loans up to $625k is around 5.25%. For loans up to $417k and $625k, we’re close to those targets. Rates for loans from $625k to $1m are mid-6% range.

The Fed announced just before New Year’s that they’ve hired outside money managers to run their $500 billion mortgage bond purchase program and that it will start in January. We’ll likely see another update on timing this week. When that purchasing starts, it will drive bond prices up and rates down. [Editor's Note: They've started.]

The biggest news this week is Friday’s jobs report for December, which calls for 475,00 lost jobs and unemployment going from 6.7% to 7%. And this doesn’t even include post-holiday retail worker layoffs that won’t be captured until next month. It would mark 12 straight months of job losses and about 2.5m jobs lost for 2008. This news can cause rates to drop as investors dump stocks and buy bonds.

UPDATE (1/6): "Longer-term Treasuries fell for a fourth day, pushing yields on 10-year notes to the highest in three weeks, as concern the U.S. will sell record amounts of debt drove investors from the safety of government securities."

∙ All Your Home Loans Are Belong To Us (To Boost Liquidity) [SocketSite]
∙ Treasuries Drop Amid Concern U.S. to Sell Record Amount of Debt [Bloomberg]

Posted by socketadmin at 11:45 AM | Permalink | Comments (13) | (email story)

A Sign Of The Times And A Comp In 2005, So How About In 2009?

Purchased for $550,000 in June of 2004, this Outer Sunset single-family home was flipped eight and one-half months later for $680,000 (an increase of $130,000/23.6%) and established a new neighborhood comparable sale (“comp”) that we can’t recall being dismissed on account of the short holding period or location.

Bought back by the bank this past September for $535,075 this past September, 3004 Ortega is currently listed for $589,900.

∙ Listing: 3004 Ortega (2/1) - $589,900 [MLS]

Posted by socketadmin at 6:30 AM | Permalink | Comments (40) | (email story)

December 30, 2008

October S&P/Case-Shiller: San Francisco MSA Down Across The Board

According to the October 2008 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 4.2% from September ’08 to October '08 and are down 31.0% year-over-year. For the broader 10-City composite (CSXR), year-over-year price growth is down 19.1% (having fallen 2.1% from September).

Three of the metro areas have given back, on average, more than 30% of the value of homes since October of last year. Phoenix remains the weakest market, reporting an annual decline of 32.7%, followed by Las Vegas, down 31.7%, and San Francisco down 31.0%. Miami, Los Angeles, and San Diego were close behind with annual declines of 29.0%, 27.9% and 26.7%, respectively.

Condo values in the San Francisco MSA also continued their decline falling 3.1% from September ’08 to October '08, down 17.0% on a year-over-year basis and down 19.8% from an October 2005 high.

And San Francisco MSA single-family home prices once again fell across all three price tiers.

The bottom third (under $361,865 at the time of acquisition) fell 3.5% from September to October (down 42.1% YOY); the middle third fell 2.7% from September to October (down 27.6% YOY); and the top third (over $616,549 at the time of acquisition) fell 2.7% from September to October (down 15.7% YOY).

According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have retreated to January 2001 levels, the middle third has returned to April 2003 levels, and the top third has fallen to October 2004 levels.

The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA) and are imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best).

∙ Home Price Declines Worsen As We Enter the Fourth Quarter of 2008 [S&P]
∙ September S&P/Case-Shiller: San Francisco MSA Decline Continues [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (254) | (email story)

December 29, 2008

SocketSite's San Francisco Listed Housing Update: 12/29/08

Inventory of Active listed single-family homes, condos, and TICs in San Francisco fell 20.2% over the past two weeks (about average for the end of the year) and is closing out 2008 29.3% higher versus last year (60.1% higher versus 2006).

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 12/15/08 [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (8) | (email story)

Drinking Might Be On The Rise, But Martini Park San Francisco Is Not

A plugged-in (and observant) reader reports:

There has been a sign at Rincon Center for the past 4-6 months saying that a Martini Park bar will be opening in late Fall 2008. Of recent, there is a "for lease" sign in one of the windows (Spear Street side). There is also no reference to a San Francisco location on the company's website. There was several months ago.

Curious if it has died a quite death as a result of the slowing economy. That was the line they gave for closing the location in Texas.

That's probably a good guess, and they wouldn't be alone, but we can't confirm. Readers?

Posted by socketadmin at 9:45 AM | Permalink | Comments (20) | (email story)

Flash Back Forward To Beacon Two-Bedrooms Asking Under $600,000

A tax assed value of just over $750,000; a recorded sale back to the bank three weeks ago for $629,142; and a two-bedroom/bath condo at the beacon that’s now asking $599,900 (and touting “Offers anytime!”). Yes, it's 250 King Street #266 and almost the end of 2008.

∙ Listing: 250 King #266 (2/2) - $599,900 [MLS]

Posted by socketadmin at 8:30 AM | Permalink | Comments (39) | (email story)

December 24, 2008

JustQuotes: Jumbo Premiums For Jumbo Loans

"The average 30-year fixed jumbo loan rate was 7.32 percent on Dec. 22, compared with 5.38 percent for a conforming loan, according to BanxQuote of White Plains, New York.

The difference between them has averaged 2.13 percentage points in December, 10 times the average spread from 2000 to 2006 and above last month’s 1.95 percentage points that was the highest on record."

∙ Jumbo Mortgage Shoppers Get Little Relief From Fed Rate Cuts [Bloomberg]

Posted by socketadmin at 12:15 PM | Permalink | Comments (20) | (email story)

December 23, 2008

JustQuotes: Forget The Hopes, It's Time For Prayer

"Sales of single-family houses in the U.S. dropped in November by the most in two decades and resale prices collapsed at a pace reminiscent of the Great Depression, dashing hopes that the market was close to a bottom."

∙ U.S. Economy: Housing Prices Collapse at Near-Depression Pace [Bloomberg]

Posted by socketadmin at 10:15 AM | Permalink | Comments (69) | (email story)

December 22, 2008

Some "Older Folks" (His Words, Not Ours) Perspective On The Market

Some excerpted perspective from an older experienced plugged-in reader:

Us older folks (48 years myself) have seen this all before. I sold my second home in Santa Monica in 1990 which at that time had the same bubble energy of late 2006 here. I had 6 offers within 48 hours, almost all over listing price, which was 25% more than any other similar home sold for in my neighborhood that year.

Back then L.A. was going through a bubble that reminds me very much of what we see here. The buyer had to hold on until 2000 to be able to finally sell it for what he originally purchased the home for, not more. This was a nice area, north of Montana, with many media stars living nearby and listed architectural gems by noted architects such as Neutra, Wallace Neff, Gordon Kaufman, etc., including at that time the bizarre residence of Frank Gehry. This was the "real Santa Monica".

10 years is a LONG time to have to wait to get your money back...

That it is. Especially if one was sold on "normal" returns or is counting on building equity to fund the purchase of a move-up home.

∙ Perhaps It’s The Market That’s More Unbelievable To Some... [SocketSite]

Posted by socketadmin at 11:30 AM | Permalink | Comments (19) | (email story)

December 19, 2008

Perhaps It’s The Market That’s More Unbelievable To Some...

Purchased for $1,600,000 a year ago when they were asking $1,675,000, 214 Arguello Boulevard returned to the market nine months later (September 2008) asking $1,595,000. The list price was lowered to $1,495,000 six weeks later. And for the past three they've been asking $1,395,000.

A sale at the current asking for this four bedroom, two and one-half bath, completely renovated and District 7 (albeit on a busy block, as it was before) condo would represent depreciation of 12.8% over the past year.

From the listing: "This price is [absolutely] unbelievable…" Only if you're not plugged-in.

∙ Listing: 214 Arguello Boulevard (4/2.5) - $1,395,000 [MLS]

Posted by socketadmin at 7:15 PM | Permalink | Comments (46) | (email story)

Doesn't Everybody Want To Work Here? (Class A Rents Plunge)

“A new Colliers International report found weighted average rents in the financial district dropped from $56.17 to $41.34 a square foot during the [fourth quarter], a 26.4 percent decline. Across the entire San Francisco market, Class A average rents dropped even more — 28.2 percent from $55.65 to $39.79 a square foot.”

∙ Downtown S.F. office rents plunge by 26% [Business Times]
∙ S.F. office space rent drops 22% [SFGate]
∙ San Francisco Firms Continue To Shed And Sublease Office Space [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (11) | (email story)

December 18, 2008

San Francisco Recorded Sales Activity In November: Down 29% YOY

According to DataQuick, home sales volume in San Francisco fell 29.0% on a year-over-year basis last month (340 recorded sales in November ’08 versus 479 sales in November ‘07) and fell 17.9% compared to the month prior. San Francisco recorded the sharpest year-over-year decline in sales volume of any Bay Area county last month.

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).

San Francisco's median sales price in November was $648,000, down 20.5% compared to November ’07 ($814,750) and down 7.3% compared to the month prior.

For the greater Bay Area, recorded sales volume in November was up 12.3% on a year-over-year basis but fell 24.4% from the month prior (5,756 recorded sales in November '08 versus 5,127 in November ’07 and 7,613 in October '08), while the recorded median sales price fell 44.4% on a year-over-year basis, down 6.7% compared to the month prior. Once again, think foreclosures.

At the county level, foreclosure resales last month ranged from 10.0 percent of resales in San Francisco to 63.6 percent in Solano County. In the other seven counties, November foreclosure resales were as follows: Alameda, 44.4 percent; Contra Costa, 63.0 percent; Marin, 22.6 percent; Napa, 40.8 percent; Santa Clara, 38.9 percent; San Mateo, 21.8 percent; Sonoma, 51.6 percent.

At the extremes, Solano recorded a 90.4% year-over-year increase in sales volume (a gain of 283 transactions) on a 37.6% decrease in median sales price, while Contra Costa recorded a 61.9% increase in sales volume (a gain of 544 transactions) on a 49.9% drop in median sales price.

∙ Bay Area median home price sinks to 8-year low; sales up over '07 [DQNews]
∙ San Francisco Recorded Sales Activity In October: Down 21.3% YOY [SocketSite]

Posted by socketadmin at 11:45 AM | Permalink | Comments (140) | (email story)

December 17, 2008

1018-1020 Pine Street: Eight Contemporary Condos Apartments

As we wrote three months ago:

As far as we know, 1018-1020 Pine Street is slated to be eight units (condos) with seven (possibly eight) parking spaces. In terms of any other details, we don't know...But we will keep you plugged-in.

As a plugged-in tipster writes today: "I think I know what might be happening." Another luxury new development is skipping the sales office to go the rental route (currently asking $2800-$4250/mo, parking for $200). At least for now.

∙ 1018-1020 Pine Street: Eight Contemporary Condos Coming Soon [SocketSite]
∙ $3300 / 2br - Luxury condos! 8 Brand New units! MODERN [Craigslist]
∙ The SocketSite Scoop And Rumor Confirmed: Artani Suspending Sales [SocketSite]
∙ The Scoop: Argenta (1 Polk) On The Market As An Apartment Building [SocketSite]

Posted by socketadmin at 4:00 PM | Permalink | Comments (33) | (email story)

QuickLinks: Lower Rates Will Save San Francisco! Oh, Wait A Minute…

∙ The FOMC Speaks (And Not In Tongues): It Ain't Pretty Out There [SocketSite]
∙ U.S. Stocks Fall on Concern Fed Is Running Out of Ammunition [Bloomberg]
∙ Banks Show No Signs of Easing in Step With Fed’s Cuts [Bloomberg]
∙ Mortgage Rates Left in Dust by Treasuries, Failures [Bloomberg]

Posted by socketadmin at 8:15 AM | Permalink | Comments (16) | (email story)

December 16, 2008

Back To The Future Past (And Then Some) For Marquee Building #403

Purchased for $551,000 in May of 2005, 151 Alice B. Toklas Place #403 returned to the market in August of 2008 asking $599,000, a sale at which would have represented average annual appreciation of roughly 2.5% over the past three years.

In September the price on the Marquee building one-bedroom was reduced to $525,000, in October to $475,000, and in November to $425,000 where it remains available today assuming a successful short sale.

We should also mention that the person who sold it for $551,000 in May of 2005 bought it for $415,000 in September of 2002. Perhaps it’s time to include that "not included in sale" chandelier.

∙ Listing: 151 Alice B. Toklas Place #403 (1/1) - $425,000 [MLS]

Posted by socketadmin at 2:00 PM | Permalink | Comments (23) | (email story)

The FOMC Speaks (And Not In Tongues): It Ain't Pretty Out There

"The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.

Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.

Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters."

∙ Federal Open Market Committee Statement: December 16, 2008 [federalreserve.gov]
∙ The Fed Cuts Rates To One Percent To Avert "Prolonged" Recession [SocketSite]

Posted by socketadmin at 11:25 AM | Permalink | Comments (35) | (email story)

If You Want To Live Like An Architect, Do The Your Math (398 Eureka)

It was a plugged-in reader that first connected the dots with regard to the listing of Phil Matthews’ AIA home tour home at 398 Eureka. Asking $2,450,000 in September and then taken "off the market" two weeks ago, it’s another plugged-in reader that points out that the home has been added to the rental pool and is currently asking $6,500 per month.

We’ll let you do your math. And once again, connect the dots.

∙ Listing (for rent): 398 Eureka (3/3.5) - $6,500/mo [398eureka.com]
∙ AIA Tour (And Architect’s) Home Hitting The Market: 398 Eureka [SocketSite]
∙ To Rent Or To Buy, That Is The Question (That Only You Can Answer) [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (46) | (email story)

December 15, 2008

SocketSite's San Francisco Listed Housing Update: 12/15/08

Inventory of Active listed single-family homes, condos, and TICs in San Francisco fell 14% over the past two weeks (versus an average of 16.1% over the same two weeks in 2006 and 2007) and is currently running 30.5% higher on a year-over-year basis (down 2.8% over the past two weeks) as few new homes are listed and many are withdrawn as we close out the year.

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 12/01/08 [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (13) | (email story)

Preaching To The Plugged-In Choir (We Can Only Hope)

The Chronicle and a couple of brokerages seem to have figured out what most plugged-in people have known and have been able to act on accordingly since well before the second half of 2008: real estate values in San Francisco are falling.

The quote from McGuire Real Estate CEO Charles Moore with which we have to agree, "I don't think we've even seen the beginning of this yet." More on that point tomorrow.

∙ S.F. feels the pain of real estate meltdown [SFGate]

Posted by socketadmin at 6:00 AM | Permalink | Comments (202) | (email story)

December 10, 2008

Chelsea Park Christmas Special (But Lump Of Coal If It's Your Comp?)

It’s a “Christmas special!” at Chelsea Park as the list price for 3620 19th Street #26 has just been reduced to $799,000 (previously listed for $899,000).

Originally asking $949,000 for this 1,332 square foot three-bedroom, two-bath condo, the reduction might seem more like a lump coal, however, if considered to be your comp.

∙ Listing: 3620 19th Street #26 (3/2) - $799,000 [MLS]
∙ Changing Chelsea Park Expectations Versus Eleven Months Ago [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (8) | (email story)

December 9, 2008

The Economic (And Employment) State Of San Francisco: Not Good

From the Examiner with regard to the economic state of San Francisco:

The City is facing a fiscal “crisis,” with one of the largest deficits in San Francisco history expected in the next year, Mayor Gavin Newsom said Monday, adding that hundreds of layoffs could be announced as soon as Tuesday.

And with respect to employment (or lack thereof):

Unemployment in The City hit the 6 percent mark for the first time since June 2004, according to the [Controller’s Office October economic barometer report], which stated that “most indicators continue to show accelerating weakness in San Francisco’s economy.”

Stating the obvious as some like to say (but yet somehow seem to be missing), the economy, employment and real estate prices tend to be correlated. And it's not looking good.

∙ Mayor: City's budget situation 'legitimately a crisis' [San Francisco Examiner]
∙ From Underwater To Unemployed (And Sorry, But It’s Just Starting) [SocketSite]

Posted by socketadmin at 4:30 AM | Permalink | Comments (119) | (email story)

Chinese To Raid San Francisco (And Lose Like In Germany?)

It reads more like a press release than a serious report, but a reader directs us to the "Chinese property hunters to raid US" piece in the Financial Times. The counterpoint:

“Unless these people need a house in the US to live in, this is senseless,” said Yi Xianrong, a real estate expert at the Chinese Academy of Social Sciences. “A few years ago there was a lot of talk about investing in German real estate but most of the people who did so lost a lot of money.”

Ah, those mythical foreign saviors.

∙ Chinese property hunters to raid US [Financial Times]
∙ Recap: What’s The Scoop On Foreign Investment In San Francisco? [SocketSite]

Posted by socketadmin at 4:00 AM | Permalink | Comments (9) | (email story)

December 8, 2008

JustQuotes: Why Simply Reducing Rates Won't Cure The Market's Ills

"Almost 53 percent of borrowers whose loans were modified in the first quarter of this year re-defaulted by being more than 30 days overdue..."

∙ Majority of Modified Loans Fail Again, Regulator Says [Bloomberg]

Posted by socketadmin at 9:45 AM | Permalink | Comments (46) | (email story)

December 5, 2008

Once Again, We'll Posit It's Just Starting (Not To Mention Matters)

"Skittish employers slashed 533,000 jobs in November, the most in 34 years, catapulting the unemployment rate to 6.7 percent, dramatic proof the country is careening deeper into recession."

"The unemployment rate would have moved even higher if not for the exodus of 422,000 people from the work force. Economists said many of those people probably abandoned their job searches out of sheer frustration. In November 2007, the jobless rate was at 4.7 percent."

∙ Employers cut 533K jobs in Nov., most in 34 years [SFGate]

Posted by socketadmin at 7:45 AM | Permalink | Comments (41) | (email story)

December 3, 2008

JustQuotes: And Housing? Uhh...No.

“What we’ve seen since mid to late September is that business activity has shut down, along with the consumer,” Stephen Gallagher, chief economist at Societe Generale in New York, said in an interview with Bloomberg Television. “There is no reason for an immediate turnaround; financial markets have not stabilized; consumers have not stabilized.”

∙ U.S. Economy: Service Companies Shrink at Record Pace [Bloomberg]

Posted by socketadmin at 9:45 AM | Permalink | Comments (20) | (email story)

U.S. Mortgage Applications Surge With Refi's Leading The Way

While mortgage application volume surged 112 percent last week following the Fed’s "we pay cash for your debt" announcement, refi’s accounted for the bulk of the movement jumping 203 percent versus 38 for purchase.

∙ U.S. MBA’s Mortgage Applications More Than Doubled Last Week [Bloomberg]
∙ It's Like The Fed (And Taxpayers) Just Bought You A Couple Of Points [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (59) | (email story)

December 1, 2008

QuickLinks: While The Cost Of Capital Drops, Availability Does As Well

∙ Treasury Yields Drop to Record Lows as Bernanke Cites Buybacks [Bloomberg]
∙ U.S. Consumers Seen Facing ‘Liquidity Squeeze’ [Bloomberg]

Posted by socketadmin at 4:00 PM | Permalink | Comments (22) | (email story)

JustQuotes: A Short Sale Narrative That Sounds Awfully Familiar

“Here's the common narrative: A home goes on the market as a short sale - priced at less than is owed on the mortgage, so the lender must approve any sale. The bank either declines offers as too low or takes months to decide, which drives away potential buyers.”

∙ Be persistent during ordeal of short sale [SFGate]
∙ Did We Mention How Much That Third Party Matters? [SocketSite]

Posted by socketadmin at 6:40 AM | Permalink | Comments (3) | (email story)

SocketSite's San Francisco Listed Housing Update: 12/01/08

Inventory of Active listed single-family homes, condos, and TICs in San Francisco fell 8.6% over the past two weeks (versus an average of 11% over the same time two weeks in 2006 and 2007) but is now running 33.3% higher on a year-over-year basis (up 4.9% over the past two weeks).

At the same time, listed sales activity is down dramatically on a year-over-year basis. And once again, it’s another new record with respect to the percentage of listings that have undergone at least one price reduction (currently 44.7% of all listings versus 31.6% at the same time in 2007 and 29.3% in 2006).

The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).

∙ SocketSite's San Francisco Listed Housing Update: 11/17/08 [SocketSite]
∙ Early San Francisco Sales Numbers For November: Down Almost 50% [SocketSite]

Posted by socketadmin at 6:40 AM | Permalink | Comments (14) | (email story)

November 25, 2008

New S&P/Case-Shiller Condo Price Index: San Francisco MSA Falling

According to the newly released S&P/Case-Shiller Condo Price Index, condo values in the San Francisco MSA fell 3.3% from August ’08 to September '08, are down 15.0% on a year-over-year basis, have fallen 17.2% from a high in October 2005, and have dipped below levels last seen in October 2004.

The SocketSite S&P/Case-Shiller condo footnote: The Condo Price Index includes San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA) and is imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best).

∙ S&P Launches Condo Indices; Adds Seasonally-Adjusted Data [S&P]
∙ September S&P/Case-Shiller: San Francisco MSA Decline Continues [SocketSite]

Posted by socketadmin at 7:00 PM | Permalink | Comments (63) | (email story)

It's Like The Fed (And Taxpayers) Just Bought You A Couple Of Points

"U.S. mortgage rates fell more than three-quarters of a percentage point today after the Federal Reserve said it will buy as much as $600 billion of debt."

∙ U.S. Mortgage Rates Fall on $600 Billion Fed Plan [Bloomberg]
∙ As Lenders (And Consumers) Hoard, The Fed Commits Another $800B [SocketSite]

Posted by socketadmin at 3:00 PM | Permalink | Comments (7) | (email story)

Early San Francisco Sales Numbers For November: Down Almost 50%

Last week we calculated a 38% single week decline in San Francisco listed sales volume with inventories up 28.4% year-over-year. And now according to a plugged-in reader, listed sales volume in San Francisco for the month of November is currently running 47% lower on a year-over-year basis based on early counts for the first three weeks of the month, while the median sales price has fallen 15% (now in line with 2004).

∙ SocketSite's San Francisco Listed Housing Update: 11/17/08 [SocketSite]

Posted by socketadmin at 12:15 PM | Permalink | Comments (20) | (email story)

Did We Mention How Much That Third Party Matters?

From the plugged-in listing agent for 835 Foerster:

We received an offer several months [ago] for $855,000. It took months to negotiate this sale price with the lenders (both a 1st and a 2nd), not to mention other costs such as back taxes, expenses, commissions, etc., etc...

The lenders unfortunately took too long to approve the payoff (and their losses), and the buyers just pulled out of the deal, citing personal and financing reasons. So yes, the lenders did approve the $855,000 price, but since the contract was submitted several months ago, we've experienced a big market shift.

We lowered to asking price to $788,000 [yesterday] and hope to take a new offer(s) to the lenders, and re-open negotiations.

As we said, while a seller and lender might agree, it's that third party (i.e., the buyer) that really matters. Once again, purchased with loans totaling $950,000 in July of 2006 up in Miraloma Park (District 4). And as always, thank you for plugging in.

∙ Listing: 835 Foerster (3/2.5) - $788,000 [MLS]
∙ While Those Two Agree, It’s A Third That Really Matters [SocketSite]

Posted by socketadmin at 9:30 AM | Permalink | Comments (13) | (email story)

"Foreign Buyers" Never Materialized And Now Tourist Dollars Decline

“The dollar’s resurgence, as well as a drop in home and stock values outside the U.S., will discourage foreign shoppers into next year as the global financial crisis intensifies, [Stifel Nicolaus & Co. analyst David Schick] said. He estimates sales will decline 8 percent at Tiffany’s Fifth Avenue store in New York in the third and fourth quarters, versus gains of 25 percent and 10 percent a year earlier.”

∙ Saks, Neiman May Slump More as Tourist Spending Slows [Bloomberg]
∙ Recap: What’s The Scoop On Foreign Investment In San Francisco? [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (4) | (email story)

September S&P/Case-Shiller: San Francisco MSA Decline Continues

According to the September 2008 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 3.9% from August ’08 to September '08 and are down 29.5% year-over-year. For the broader 10-City composite (CSXR), year-over-year price growth is down 18.6% (having fallen 1.9% from August).

Phoenix was the weakest market, reporting an annual decline of 31.9%, followed by Las Vegas, down 31.3%, and San Francisco at -29.5%. Miami, Los Angeles, and San Diego did not fair much better with annual declines of 28.4%, 27.6% and 26.3%, respectively.

Prices continued to fall across all three price tiers in the San Francisco MSA.

The bottom third (under $386,320 at the time of acquisition) fell 3.1% from August to September (down 43.2% YOY); the middle third fell 2.2% from August to September (down 27.3% YOY); and the top third (over $647,565 at the time of acquisition) fell 1.2% from August to September (down 14.4% YOY).

And according to the Index, home values for the bottom third of the market in the San Francisco MSA have retreated to March 2001 levels, the middle third has returned to July 2003 levels, and the top third has fallen to January 2005 levels.

The standard SocketSite S&P/Case-Shiller footnote: The HPI above 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).

∙ National Trend of Home Price Declines Continues Through the Third Quarter of '08 [S&P]
∙ August S&P/Case-Shiller: San Francisco MSA Decline Accelerates [SocketSite]

Posted by socketadmin at 7:45 AM | Permalink | Comments (38) | (email story)

November 24, 2008

The Latest Cow Hollow Condo Comp (And Apple) Closes Escrow

What plugged-in people have known for a week, all agents on the MLS now know as well: 1968 Greenwich officially closed escrow on 11/21/08 with a reported contract price of $1,750,000.

Purchased for $2,100,000 in May of 2005, in addition to $350,000 in acquisition cost our plugged-in buyer will be saving (and the City will be losing) approximately $4,000 a year in property taxes as compared to the party who sold.

The sale of this property was considered a legitimate neighborhood "comp" (comparable sale) in 2005. The implications for today?

∙ A Plugged-In Reader Picks An Apple For Himself (1968 Greenwich) [SocketSite]
∙ A Renovated Cow Hollow Apple On The Tree: 1968 Greenwich Street [SocketSite]

Poste