October Stats Show No Sign of Slowdown

October Statistics Show No Slowdown in SF Market

November 2012 Market Update

Last month’s newsletter mentioned anecdotal word on the street that the San Francisco market might be slowing down a bit – it appeared the frenzy had diminished somewhat and that fewer listings were selling instantly with ridiculous numbers of competing offers – and the question was whether this would soon show up in the statistics. It hasn’t. Though September did see a burst of new inventory that temporarily changed the equation between buyers and inventory, now with October’s statistics it’s clear the market is still dominated by a high demand/ low supply/ upward pressure on prices dynamic. However, it should be noted that there is a difference in market heat between a listing receiving 1 or 2 offers compared to it receiving 5 to 20 offers, however that difference might not show up in the statistics as long as one good offer is accepted.

Comparing September-October sales reported to MLS with the same two months in 2011, SF dollar volume home sales were up 41%; at Paragon, our sales were up over 109%. These are not the signs of an ebbing market, nor are the statistics illustrated below.

Typically, at this time of year, the number of new listings begins to markedly decline in preparation for the slowdown that usually begins at Thanksgiving and runs through mid-January. But we saw very little of the usual summer slowdown this year, so we will see how much market activity slackens during this year’s holiday season.

Median Sales Price Jumps in October
The median home sales price is that price at which half the sales occurred for more and half for less. It is a very general statistic and big monthly fluctuations, such as seen in October, should be taken with a grain of salt until substantiated over the longer term. Still, October saw a very large increase over the relatively static median prices seen in the previous 6 months, which followed the big jump in early 2012. Remember that sales prices reflect accepted offer activity in the 4 to 10 weeks prior.

Average Sales Price Jumps
The average price is simply the total dollar volume of sales divided by the number of sales. Like median price, it is a general statistic affected by a variety of factors and often fluctuates without great significance on a monthly basis. Among other factors, a decline in distressed home sales and/or an increase in high-end home sales, both of which are occurring now in SF, can have an outsized effect on average sales price. We will see if October’s big increase is sustained in future months or is simply one of those anomalous fluctuations which occur in real estate.

Buyer Demand Remains at Peak Level
The percentage of listings accepting offers in October was probably about as high as it has ever been, close to twice the level of October 2011. The decline seen in September was the result of a large influx of new listings hitting the market in mid-month.

New Home Construction Blasting Off
After crashing in 2008, developers are building again in a big way: over 4000 housing units are currently under construction in San Francisco, with many thousands more in the planning/permit phases. The lack of new homes on the market in the past few years has greatly impacted the supply side of the supply and demand equation. However, with the significant time lag between construction beginning on the larger projects and new condos arriving on market, the effects of this building surge will be a while before being felt.

Distressed Home Market Dwindling
The city was never as hard hit as many other areas by distressed home sales (bank-owned and short sales), and now they are declining rapidly with the market recovery. The number of distressed home listings has declined by 80% since it peaked in November 2010. On this course, this segment will soon be only a negligible part of the SF market.

Listings for Sale Still Very Low
After the spike in September from the large influx of new listings – September is typically the month with the greatest number of new listings – the number of homes for sale is declining again and will almost certainly continue to do so until early 2013.

Months’ Supply of Inventory (MSI)
MSI is a measure of how long it would take to sell the current supply of listings at the existing rate of sales. In October, it was about as low as it has ever been.

Average Days on Market (DOM)
Strong buyer demand plus low inventory typically leads to lower average days on market, and this is what occurred in October.

The Longer Term View
Pulling back from monthly data to look at the longer term cycles of real estate gives greater context to what’s happening in our current recovery.

In October, we completed quarterly updates for San Francisco’s luxury home market, the SoMa-South Beach condo market, the Noe Valley-Castro-Cole Valley home market, as well as for many of the city’s other neighborhoods. If you would like to review these analyses, please reply to this email with your specific request and the information will be sent to you.


Newsletter: Is the SF Market Easing a Little?

Is the Ferocious SF Market Easing a Little?

October 2012 San Francisco Market Update

September brought a burst of new inventory that helped satisfy some of the fierce buyer demand for San Francisco homes. Anecdotally, word on the street is that the market may have calmed down a little after Labor Day: not every listing is selling immediately amid high numbers of competing offers — though this may simply reflect the temporary increase in new listings, or sellers too hopeful in their asking prices. But it also appears that home price appreciation has been stabilizing or at least slowing in the last quarter after the big jump earlier in the year. It’s still too early for conclusions: Since most statistics are like looking in a rearview mirror, what is happening today will only become clear in coming months.

Even if the market has eased a little, it is still very strong and very competitive by any historical measure.

Below are 2 updated, mapped analyses of median sales prices and average dollar per square foot values. Almost all the current values reflect a significant jump from 2011: for the city overall, the increase has been in the 10 to 12% range, but it can vary from 4% to 18% by neighborhood and property type.

Median Sales Prices

After the big jump early in the year, median price appreciation for both house and condos appear to have stabilized or slowed – at least for the city as a whole. (Market conditions vary widely by neighborhood.) The median sales price for non-distressed SF condos now slightly exceeds the median price in 2007, the last peak of the market, while that of SF houses is only 5% below 2007. We have similar charts going back 15 to 30 years available on our website.

Inventory

September had the highest number of new listings of any month in the past year, though well below previous Septembers: 760 new home listings in September 2012 vs. 888 in 2011 and 1138 in 2010. This significantly, if temporarily, expanded the choice of homes available to buyers. But now, in October, the number of new listings is dwindling again and inventory is still drastically low by any historical measure. Overall, in the third quarter, there were 1100 fewer listings than in the same period last year, but the number of sales increased by 21%.

2-Bedroom Condo Median Prices

In the 5 areas shown, condo values jumped across the board, though the most dramatic increase from the bottom of the market has been in South Beach/Yerba Buena — where in the last 2 quarters, the median price surged ahead of that for Pacific and Presidio Heights. Noe and Eureka Valleys and surrounding neighborhoods, SoMa and Hayes Valley/NoPa have also seen large increases. If you’d like data on a neighborhood not listed, please let us know.

Average Dollar per Square Foot House Values

Though pretty much all SF neighborhoods are seeing increases in dollar per square foot values for houses, the more affluent districts 5 (Noe/Eureka/Cole Valleys) and 7 (Pacific Heights-Marina) have seen some of the largest jumps. In the last 2 quarters, District 5 hit a point matching the peak of the market in 2007. If you’d like data on a neighborhood not listed, please let us know.

Luxury Home Sales

Comparing the 3rd Quarter 2012 with 3rd Quarter 2011, MLS listings of San Francisco homes of $1,500,000 and above increased by 23% and sales soared by 54%. This map shows where those sales occurred: 18 in the Sea Cliff/ Lake Street/ Richmond district; 26 in the Pacific Heights/ Marina district; 21 in Russian/ Nob/ Telegraph Hills; 19 in the greater SoMa/South Beach area; 53 in the Noe/ Eureka/ Cole Valleys district; 10 in the St. Francis Wood/ Forest Hill district; 2 in Potrero Hill and 3 in Bernal Heights. The highest prices are still generally achieved in the band of very affluent neighborhoods running across the northern boundary of the city, though growth in the number of luxury home sales is strongest in the central and northeastern areas.

Months Supply of Inventory (MSI)

Still bumping along at the lowest levels in memory. MSI reflects the amount of time it would take to sell the current inventory of homes for sale at the existing rate of sales. Lower MSI means higher demand as compared to supply.

Percentage of Listings Accepting Offers

Houses, condos and TICs all hit historic highs in the 54% to 60% range earlier in the year, but have now fallen back a bit. In the third quarter, TICs saw a rather large decrease, but their percentage is still much higher than in the last four calendar years. The percentages for houses and condos are still extraordinarily high. This statistic is one of the clearest measures of supply and demand.

Average Days on Market

For those listings that did accept offers in September, the average days on market was the lowest in a long while. Many new listings, especially those considered most appealing and well-priced, are accepting offers within 7 to 10 days of coming on market.


Summer’s Unflagging Demand Fuels Higher SF Home Prices

San Francisco Real Estate Market: September 2012 Update

Typically, the real estate market slows down during the summer months – a period often called the summer doldrums — but that certainly did not occur this year in San Francisco: unflagging buyer demand continued through August. The market recovery that began in some SF neighborhoods late last year has now spread throughout the city. Bay Area, state and national home markets are also showing clear, if still early signs of turnaround.
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San Francisco House Values Rising

It’s rare that the 3 main statistical measurements of home value line up so perfectly, but comparing this summer’s house sales to last summer’s shows 12% increases across the board. Which doesn’t mean uniform appreciation for SF homes: changes in value vary by property and neighborhood. This analysis and the one following are for non-distressed sales in the city’s 8 northern and central districts, which generally run north of the Sloat Blvd/ Highway 280 line: The 2 southern districts were hit much harder by foreclosures and though they too are recovering quickly, mixing in their data distorts the results. During this 3-month period, house sales volume in the 8 districts was up 5% in units and 18% in dollar volume — and would be up much higher if more inventory had been available. Average days on market fell from 52 days to 39 days year over year.

San Francisco Condo Values Rising

The condo statistics don’t line up quite as neatly, but nearly so: they’re up from 9.4% to almost 12.5%, with the average being about 11%, which is very close to the 12% increase seen in houses. (Remember: these statistics are generalities regarding the sale of many hundreds of relatively unique homes.) Closed sales follow the time when new listings hit the market and offers are negotiated by 4 to 10 weeks, so these charts reflect the market from April through July. Non-distressed condo sales volume in the 8 northern/central city districts during this 3-month period is up 41% in units and 54% in dollar volume from last summer, and average days on market dropped from 69 days to 47 days.

Most Listings Selling At or Over Asking Price

San Francisco is currently seeing remarkable percentages of homes selling above and sometimes far above the asking price: 64% of house sales and 45% of condo sales in August closed at above list price, and solid percentages sold at 10% higher or more. This is perhaps as good a snapshot as any of the ferocious heat of buyer demand right now. (Sales that were within a quarter percent of 100% were considered “At List Price.”)

Percentage of Listings Accepting Offers

No summer slowdown is showing up in this important metric of supply and demand.

Price Reductions, Sales Price Percentages, Time on Market

Over two thirds of SF listings are selling quickly at an average of almost 4% over the asking price. Those listings that go through one or more price reductions take much longer to sell (over 2 1?2 months longer on average) to close at a significant discount to original price. For every listing selling after a price reduction, another listing expires or is withdrawn without selling, typically due to being perceived as overpriced. The keys to getting the best price for your home: price it right to begin with; prepare it to show at its absolute best; comprehensively market it to buyers and agents; negotiate offers aggressively. And it doesn’t hurt to take advantage of a low inventory/high demand market.

Distressed House Sales Declining

Distressed house sales – bank-owned and short sales – are clustered in the city’s two southern districts, running from Bayview to Oceanview. However, these listings are rapidly declining as the market turns around and values increase: distressed house sales have dropped from 20% of sales in 2011 to 12% in August 2012. This becomes a virtuous circle of market recovery: higher values mean fewer distressed listings; fewer distressed listings lessen their (significant) negative effect on neighborhood home values.

Distressed Condo Sales Sinking

The distressed condo segment of the SF market is dwindling rapidly both as a percentage of total sales (from 20% in 2011 to 14% YTD, and 10% in August 2012), and even more dramatically, as a percentage of listings for sale (down to only 4% as of August 31). The greatest number of distressed condo sales has been in the greater SoMa/ South Beach area, where so many of the new, big developments were built over the past 10-15 years, but the impact of these sales is shrinking very quickly everywhere in the city.

Unit Sales Up

Condo and 2-4 unit building unit sales are up over 20% from last year this time – this time comparing a six-month period of each year. House sales — and indeed sales of all types — would certainly be up by a much greater percentage if there were simply more listings for buyers to purchase.

Inventory Way Down

There’s no ambiguity in this chart: An inadequate number of new listings and extremely high demand have kept the inventory of listings available to choose from on any given day lower than at any time in recent memory. It’s not unusual for September to bring a large burst of new listings to fuel the autumn sales season: in this chart, you can see the big jump in September 2010 and the smaller surge in September 2011. Buyers and their agents are certainly praying for a surge in inventory to alleviate the intense competition for available homes.

Days on Market Continue to Decline

The trend is clear: listings are selling much more quickly. Though 37 days as an average is very, very low — nationally, there’s excitement that the figure just fell to 69 days — many new listings in the city are accepting offers within 7-10 days of coming on market.

Values by Neighborhood, Property Type & Bedroom Count

We just completed our detailed semi-annual survey of SF home values. This is one of seven charts: the complete report can be found by clicking on the Market Dynamics Charts link in the footer below and then selecting Neighborhood Values from the sections listed on the upper left of the webpage.


Three Recessions, Two Bubbles and a Baby (Recovery)

30 Years of Housing Market Cycles in San Francisco

Below is a look at the past 30 years of real estate boom and bust cycles. Financial-market cycles have been around for hundreds of years, all the way back to the Dutch tulip mania of the 1600′s. While future cycles will vary in their details, the causes, effects and trend lines are often quite similar.

In the first 2 charts below, tracking the Case-Shiller Home Price Index for the San Francisco 5-County Metro Statistical Area (MSA), the data points are for January of each year and refer to home values as a percentage of those in January 2000. January 2000 equals 100 on the trend line: 66 means prices were 66% of those in January 2000; 175 signifies prices 75% higher.

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1983 through 1995

(After recession) Boom, Decline, Doldrums

In the above chart, the country is just coming out of the late seventies, early eighties recession – huge inflation, stagnant economy (“stagflation”) and incredibly high interest rates (hitting 18%). As the economy recovered, the housing market started to appreciate and this surge in values began to accelerate deeper into the decade. Over 6 years, the market appreciated almost 100%. Finally, the eighties version of irrational exuberance — junk bonds, stock market swindles, the Savings & Loan implosion, as well as the late 1989 earthquake here in the Bay Area — ended the party.

Recession arrived, home prices sank, sales activity plunged and the market stayed flat for 4 years. Still, even after the decline, home values were 70% higher than when the boom began in 1984.

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1996 through 2011

(After Recession) Boom, Bubble, Crash, Doldrums

This next cycle looks similar but elongated. In 1996, after years of recession, the market suddenly took off and became frenzied — similar to what we’re experiencing today. The dotcom bubble pop and September 2001 attacks created a market hiccup, but then the subprime and refinance insanity, CDOs and derivatives, Ponzi schemes, books titled “Dow 30,000″ and claims that real estate never declines, super-charged a housing bubble. From 1996 to 2006/2008, the market went through an astounding period of appreciation. (Different areas hit peak values at different times from 2006 to early 2008.) In September 2008 came the market crash.

Across the country, home values fell 15% to 60%, peak to bottom, depending on the area and how badly it was affected by foreclosures — most of San Francisco got off comparatively lightly with declines in the 15% to 25% range. The least affluent areas got hammered hardest by distressed sales and price declines; the most affluent were typically least affected. Then the market stayed flat for more than 3 years, albeit with a few short-term fluctuations.

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San Francisco in 2012

A Strong but Young Recovery

In 2011, San Francisco began to show signs of perking up. An improving economy and growing buyer demand coupled with a low inventory of listings began to put upward pressure on prices. In 2012, as in 1996, the market abruptly grew frenzied with competitive bidding. The city’s affluent neighborhoods led the recovery, and those considered particularly desirable by newly wealthy, high-tech workers showed the largest gains. However, virtually the entire city is now experiencing a high demand-low supply dynamic.

The SF median house sales price has increased dramatically in 2012, though varying widely by neighborhood. But it’s still a baby recovery — though seemingly a healthy one — and the economy remains susceptible to big financial/political crises. However, the greater Bay Area, the state and the country are ALL beginning to show signs of a housing recovery. New home construction is rising, distressed sales are declining, the rent vs. buy equation has turned favorable to buying, and values are ticking up again.

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The 1983 – 2012 Overview

Up, Down, Flat, Up, Down, Flat (Repeat?)

Smoothing out the bumps delivers this overview for the past 30 years. Whatever the phase of the cycle, up or down, while it’s going on people think it will last forever: Every time the market crashes, the consensus becomes that real estate won’t recover for decades. But the economy mends, the population grows, people start families, and repressed demand of those who want to own their own homes builds up. In the early eighties, mid-nineties and now in 2012, after 3-4 years of a recessionary housing market, this repressed demand jumps back in and prices start to rise again.

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Bay Area Price Declines by Price Range

This chart illustrates the huge differences in the degree of value declines suffered by different price segments of single-family housing in the Bay Area: The lower the price range, the greater the percentage of distressed sales and the larger the declines in values. San Francisco, with its expensive housing, suffered less than most places, though it still certainly suffered. Distressed sales never made up the huge percentage of sales they reached in other counties, and now, with the market rebound, distressed-home listings in SF are rapidly declining.

Very generally speaking, the more affluent areas of the city saw a peak-to-bottom decline in the 15% to 20% range; the city’s middle price range saw 15% to 25% declines; and its lowest price segment went down 25% to 40%. Some neighborhoods are now seeing a rapid reversal of those declines.

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Is San Francisco an Exceptional Market?

Comparing Rates of Appreciation & Decline with Other Market Areas

Every market is different, and San Francisco is very different from the rest of the state and country, even from counties across the bay: Demographically, economically, culturally, in its severe limitations on growth — we can’t expand like Las Vegas or Phoenix or most counties — and in its overall desirability as a place to live and work.

The above charts illustrate how that translates into home values. Comparing the city, Bay Area, California and United States over the past 20 years, San Francisco home values appreciated more, declined less after the crash, and now appear to be recovering more quickly.

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Note on Methods and Data Sets

Calculating home price percentage changes, such as increases to or declines from peak value, are notoriously variable. The most dramatic results — and most often quoted in the media — come from picking the absolute highest value or lowest value month as the point of comparison. But monthly data often fluctuates dramatically without great significance, and we typically prefer quarterly or annual statistics if available. However, if a market is changing quickly, then monthly data must be used to illuminate the incipient trend. Still, sustained longer-term trends are always the most meaningful.

The above charts use a variety of data sets: S&P Case-Shiller Indices, San Francisco MLS sales and median sales prices from state and national Realtor Associations. Each has its own specific market area, property types and time period tracked, and methodology. These analyses were performed in good faith to create what we believe are true, if only approximate, reflections of market trends over time.

Percentage increases and declines are not created equal: A price jump from $500,000 to $1,000,000 equals a 100% increase, but falling back from $1,000,000 to $500,000, the same dollar change equals only a 50% decline.


San Francisco Market is Stuck

July 2012 Market Update

If you wish, you may jump straight to the market charts.

The SF real estate market is stuck. Stuck in high gear: huge buyer demand + the lowest interest rates in history + extremely low inventory of listings = (often ferocious) competitive bidding and increasing prices. Though this trend began in the city’s more affluent areas, it has now spread to virtually every neighborhood, property type and price segment. Since closed sales activity follows the time of offer acceptance by 4 to 8 weeks, the appreciation in home values has not yet shown up in the statistics for certain neighborhoods. We believe it will soon.

Though this situation is to the advantage of sellers (after years of market doldrums), homebuyers might take some consolation in the fact that the last time the market dramatically shifted after a similar downturn, in 1996 after the early nineties recession, there was a market frenzy much like ours today. However, people who bought at that time still ended up doing very well by getting in at the beginning of a market rebound that went on for many years, even before the housing-bubble years began. And interest rates then were close to double today’s.

When reviewing the map analyses below, remember that median and average statistics are generalities, and how they apply to any specific property is unknown. Percentage changes should be taken with a grain of salt: some neighborhoods have relatively small numbers of sales, which make statistics less reliable; in other areas, it may simply be that the size/quality mix of homes sold shifted from one period to the other — this happens. Still, overall, it is clear that the city is experiencing a general surge in home values.

Explanations for the statistics referenced can be found on the Paragon website: Statistical Definitions

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SF Median House Prices and Appreciation

Many of the city’s neighborhoods are showing significant increases in the house median sales price, and this appears to be accelerating as we get deeper into the year. Those areas not yet showing significant change are expected to show increases in the next quarter’s statistics.


Median Condo Prices and Appreciation
Many neighborhoods are showing significant increases in the condo median sales price, and this appears to be accelerating. (However, as an example of how statistics are not 100% reliable, the chart shows no appreciation for Pacific and Presidio Heights condos over the past year: we believe there was indeed significant appreciation on par with most other nearby affluent areas, but the statistic is reflecting other factors, such as different inventories for sale during the two periods being compared.)


Average Dollar per Square Foot
Average dollar per square foot has been increasing in 2012, and this appears to be accelerating.


San Francisco Dollar Volume Sales
Two factors affect dollar volume: the number of sales and the average sales price. In 2012 both of these statistics have been jumping in the city.


SF Unit Home Sales
The number of sales reported to MLS has jumped to its highest number in over 4 years. However, there are two additional factors: new-development condo sales which are often not reported to MLS are lower than in many previous years due to the crash in building after 2008 (though this is turning around too). On the other hand, it appears that the number of “off-market” sales, not listed in or reported to MLS, has surged in 2012.


Home Sales by Property Type
Houses and condos make up the great majority of sales in San Francisco, though TIC sales seem to be making a big recovery in the low-inventory situation the city has found itself in.


Home Sales by Price Range
As the market has heated up, prices have risen and distressed home listings have plunged. This is causing something of a shift upward in the percentage of sales in the higher price segments.


Average Sales Price: Short Term Trend
Average sales price and median sales price are different statistics, but they’re both showing the same trend in San Francisco.


Price Reductions, Sales Price to List Price Percentage & Days on Market
Houses selling without a price reduction are growing as a percentage of sales. They are averaging well over the asking price and selling in the shortest time period in years.


SF Luxury Home Sales
Homes selling for over $1,500,000 hit their highest level in years in the second quarter of 2012.


2-Bedroom Condo Prices: Long-Term Trends
These neighborhoods have all been showing significant price appreciation since the home-price crash in 2008-2009. If this chart went back to 1995, it would show that median prices pretty much doubled between 1995 and 2000.


Expired and Withdrawn Listings
As the market gets hotter, fewer listings expire without selling. Right now,the percentage of expired and withdrawn listings is incredibly low.


Percentage of Listings Accepting Offers
The stronger the buyer demand and the lower the inventory, the higher the percentage of listings accepting offers. Every San Francisco property type is at its highest percentage in many years, and perhaps its highest ever.


Dramatic Spike in SF Home Values

June 2012 Market Update

 

There is so much drama in the San Francisco homes market right now that it is difficult to decide which statistics to present in our current newsletter. The supply and demand situation – huge buyer demand and extremely low inventory of homes available to purchase – has created the most ferociously competitive environment for buyers, and the best environment for sellers, in many years. This has been building since the market began turning in 2011, made a quantum jump in early 2012, and is now showing up in big increases in sales prices. Though certain neighborhoods spearheaded the recovery and are currently showing the most dramatic changes in values, pretty much all the city’s neighborhoods are now experiencing a similar supply and demand dynamic.

 

Closed sales data reflects the market heat 4 to 10 weeks prior, when the new listings arrived on the market and accepted offers were actually negotiated. Thus the April/May spike in values mostly reflects the market in February, March and early April. If anything, the market has only become hotter since then. In past years, the market has usually slowed down during the summer months – we will see if that occurs in 2012, or whether the current trend continues.

 

Short-Term Trends in SF Home Values

 

Median and average sales prices are calculated in different ways, and each has its advantages and weaknesses as a statistical measure. Any statistic is a generalized, market-condition snapshot taken from a specific angle on the data. Ideally, different statistics should all point to the same conclusion regarding market trends, which is what we’re seeing below.

 

 

 

Long-Term Trends in San Francisco Home Values

 

By some measures, property values, at least in April and May – which is a very short statistical period of time – are rapidly approaching peak values in 2007/early 2008. In the next couple quarters, it will be seen if this is simply a dramatic fluctuation or an initial indication of a sea change in market prices. Based upon what we are seeing in the statistics and on the street, we lean toward the second view.

 

 

Home Value Trends by San Francisco Neighborhood

 

Some neighborhoods, such as the greater Noe Valley area, the greater South Beach/SoMa area and the older, prestige northern neighborhoods such as Pacific Heights and Russian Hill, have been at the leading edge of the market recovery. Other areas, such as many neighborhoods in the southern districts of the city, are a step behind and price increases have not yet shown up as dramatically in the statistics. But we believe they will very soon: the markets there have become very hot as well.

 

 

 

 

 

 

The Distressed Home Market in San Francisco

 

Distressed home listings in San Francisco are rapidly declining by units and as a percentage of the overall market, and as home values and home equity increase, this trend will continue. Since distressed home sales have a negative effect on values, this dwindling will continue to strengthen the market.

 

 


The New-Homes Market in San Francisco

 

Another important dynamic is the crash in new-home construction 5 years ago and the resultant reduction in new homes (mostly new condos) now available to purchase. As these units are highly sought after, this adds to the crunch in supply and the upward pressure on prices. As the city’s economy and housing market has recovered, builders are jumping back into the market in a big way, but there is a significant lag time between the decision to build and the acquiring of permits and having new condos ready to sell to eager buyers.

 

 

Supply & Demand Statistics

 

Units for sale and Months Supply of Inventory: Probably at their lowest in decades.

 

 

Percentage of San Francisco Home Listings Accepting Offers

In many ways, this is the single clearest statistic regarding what’s going on in the market. Average days on market have also plunged in May.

 

 

Mortgage Interest Rates

Interest rates just hit another historic low. Someone buying the same priced home now as in 2006-2007 would have a monthly mortgage payment approximately 25% lower. The Rent vs. Buy equation in the city has changed dramatically as interest rates have dropped and apartment rents have soared.


What You Get for How Much Where

Here are 3 mapped analyses of recent SF home sales by median sales price and average dollar per square foot. Even quarterly statistics can fluctuate within neighborhoods without great significance, because in every quarter a different basket of relatively unique properties sell. However, these maps still give an interesting overview of prices and values in the different areas of the city.

Under the maps, you will find a sampling of specific 2012 San Francisco home sales.

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Below is a sampling of specific 2012 San Francisco home sales closing before April 30. The short descriptions can only give a very general sense of the location, emotional appeal, quality, condition and amenities of each property, and the sales listed are not necessarily representative of typical values for the neighborhood and property type.

As always with real estate, the devil is in the details.

$10,000,000 & Above

$11,000,000. Pacific Heights on Broadway: 1904, 7 bedroom, 6 bath, Gold Coast mansion; 9744 square feet, $1129/sq.ft., spectacular views from almost every room, 120-seat home theater, 4 car parking. Sold off market.

$10,000,000. Presidio Heights on Washington: 1910, 8 BR, 7 BA, 4-story mansion; GG bridge, bay or Presidio views from almost every room, but “home is in need of work”, 3 car pkg. Original asking price of $15,000,000; 97 days on market.

$4,000,000 to $7,000,000

$7,000,000. Alamo Square on Fulton: 1904, 13 BR, 14 BA “Archbishop’s Mansion”; 20,000 sq.ft., $350/sq.ft., park and city views, 6-10 car parking, elevator. Original list price of $7,950,000; 164 days on market.

$4,980,000. Russian Hill on Green: 1928, 3 BR, 4.5 BA, full-floor co-op; almost 360 degree views, doorman building, 2 car pkg, $3200/month HOA dues. Original list price of $5,750,000; 98 days on market.

$4,795,000. Cow Hollow on Union: 5 BR, 4 BA house; 3962 sq.ft., $1210/sq.ft., large lot, pent-level with views, large south yard, 2 car pkg. Sold for 2% over asking price; 15 days on market.

$4,650,000. Telegraph Hill on Montgomery: 5-level, 2-condo building (4400 sq.ft. main residence; 1021 sq.ft. lower residence); $858/sq.ft., stunning views, 3 terraces, 3 pkg. Original list price of $7,000,000; 258 days on market.

$2,000,000 to $4,000,000

$3,800,000. Yerba Buena on Minna: 3 BR, 3.5 BA, St. Regis condo; 2573 sq.ft., $1477/sq.ft., spectacular views, doorman building, valet pkg, leased pkg, $2569/month HOA dues. 4% below asking price; 101 days on market.

$3,400,000. Noe Valley on Fair Oaks: 1908, 5 BR, 4.5 BA Edwardian; 4126 sq.ft., $824/sq.ft., decks, garden, double lot, 2 car pkg. 100% of asking price; 8 days on market.

$3,200,000. St. Francis Wood on Santa Clara: 1929, 4 BR, 5.5 BA, Spanish-Mediterranean house; 5707 sq.ft., $562/sq.ft., double lot, heated pool, 2 pkg. 8% below original price; 73 days on market.

$2,995,000. Dolores Heights on Cumberland cul de sac: 1916, 3 BR, 2.5 BA, Arts & Crafts Edwardian house; 2500 sq.ft., $1198/sq.ft., “breathtaking city and bay views”, 1 pkg. 100% of asking price; 10 days on market.

$2,875,000: Cole Valley on Cole: 1905, 12-room, 4 BR, 3.5 BA Edwardian home; 2850 sq.ft., $1009/sq.ft., 2 pkg. 1% over asking price; 25 days on market.

$2,850,000: Marina on Magnolia: year 2000, 5 BR, 4.5 BA, contemporary house; 3400 sq.ft., $838/sq.ft., water views, studio, roof deck, 2 pkg. 5% below original price.

$2,725,000. Lake Street on 25th Avenue: 1909, Thomas Churchill 4 BR, 3.5 BA Edwardian; 3700 sq.ft., $736/sq.ft., overlooking GG Bridge & Marin Headlands, plans for garage. 2% below asking price; 39 days on market.

$2,250,000. South Beach: 2 BR, 2 BA, corner penthouse at The Infinity; 42nd floor, panoramic views, doorman building, private deck, 1 pkg. 10% below asking price; 13 days on market.

$1,500,000 to $2,000,000

$1,865,000. Potrero Hill on 18th: 3 BR, 2.5 BA, renovated Victorian house; 2600 sq.ft., $717/sq.ft., bay and city views, 1 pkg.

$1,749,000. West Portal on 15th: 2009, 4 BR, 3.5 BA house; 3321 sq.ft., $527/sq.ft., high Greenpoint rating, 2 car pkg w/charging station. 100% of asking; 6 days on market.

$1,739,000. Noe Valley on Day: 1909, 8-room, 3 BR, 2.5 BA Victorian home; 2218 sq.ft. $784/sq.ft., 2 car parking.

$1,693,000. Laurel Heights on Spruce: 5 BR, 3.5 BA, Historic Registry Victorian; 2662 sq.ft., $636/sq.ft., 2 pkg. Off-market sale.

$1,649,000. Jackson Square: 2006, 3 BR, 2.5 BA full-floor condo; 2040 sq.ft., $808/sq.ft., private terrace, 1 pkg, city views, $898/month HOA dues. 4% below asking price; 159 days on market.

$1,630,000. Golden Gate Heights on Ortega: 1974, 4 BR, 3.5 BA, contemporary house; 2900 sq.ft., $562/sq.ft., ocean-city-bridge views, 2 pkg. 4% below asking price; 147 days on market.

$1,625,000. Russian Hill on Larkin: 1914, 5-room, 2 BR, 2.5 BA condo in 13 unit building; 1273 sq.ft., $1277/sq.ft., panoramic GG Bridge views, 1 pkg, $394/month HOA dues.

$1,600,000. Inner Richmond on 10th: 3-level, 11-room, 4 BR, 3.5 BA house; 2577 sq.ft., $621/sq.ft., “massive contemporary remodel”, 1 pkg. 7% above asking price.

$1,600,000. NoPa on Shrader: 4 BR, 3.5 BA, top-floor Edwardian condo; 3169 sq.ft., $505/sq.ft., roof garden, 2 pkg. 100% of asking price; 24 days on market.

$1,595,000. Eureka Valley on Grandview: 1946, 3-story, 3 BR, 2.5 BA house; 2315 sq.ft., $689/sq.ft., bay and downtown views, 2 pkg. 11% above asking price; 17 days on market.

$1,565,000. Inner Mission on Hampshire: 2001, 2-story, 3 BR, 3BA, townhouse condo; 2870 sq.ft., $545/sq.ft., fantastic views, 2 terraces. 13% below original price; 65 days on market.

$1,529,000. Ashbury Heights on Clifford Terrace: 3 BR, 2.5 BA house; 2135 sq.ft., $716/sq.ft., deck, fish pond, 2 car pkg.

$1,500,000. Glen Park on Surrey: 2007, 3-level, 3 BR, 3 BA, contemporary house; 2521 sq.ft., $595/sq.ft., view deck, 1 pkg. 100% of asking; 40 days on market.

$1,000,000 to $1,500,000

$1,496,000. Corona Heights on Saturn: 1957, 4 BR, 3 BA, contemporary house; 1900 sq.ft., $787/sq.ft., city lights view, view deck, 2 pkg.

$1,465,000. Forest Hill on Taraval: detached, 4 BR, 2.5 BA, traditional house; 2426 sq.ft., $604/sq.ft., 1 pkg. Closed at 6% above asking price.

$1,450,000. Nob Hill on Jones: 1929, 7-room, 2 BR, 2 BA condo in Clay-Jones; 18th floor, panoramic bay and city views, 1475 sq.ft., $983/sq.ft., 1 pkg, $1142/month HOA dues. 100% of asking price; 16 days on market.

$1,365,000. Presidio Heights on Sacramento: 1912, 6-room, lower-level, 3 BR, 1.5 BA, Arts & Crafts condo; 1617 sq.ft., $844/sq.ft., deeded garden, 1+ pkg. 2% below asking price; 55 days on market.

$1,348,000. Eureka Valley on Hancock: 1924, 3 BR, 2 BA, Marina-style house; 2000 sq.ft., $674/sq.ft., 2 pkg. 3% below asking price; 15 days on market.

$1,340,000. Financial District on Market: 2 BR, 2 BA condo in Ritz Carlton; 23rd floor, 1660 sq.ft., $807/sq.ft., Union Square & bay views, 1 pkg, $2621/month HOA dues. 1% below asking price.

$1,310,000. Inner Sunset on 8th: 1922, 4 BR, 2.5 BA, Edwardian house; 2790 sq.ft., $470/sq.ft., 1 pkg. 2% over asking price; 17 days on market.

$1,300,000. Anza Vista on Fortuna: 1948, 7-room, 2 BR, 2 BA house; 2337 sq.ft., $556/sq.ft., downtown views, deck, 2 pkg. 4% over asking price; 19 days on market.

$1,262,000. Potrero Hill on Carolina: 2002, North-slope, 3 BR, 3 BA contemporary home; 1872 sq.ft., $674/sq.ft., stunning downtown views, 1 pkg.

$1,125,000. Central Richmond on 30th: 1927, 8-room, 4 BR, 2.5 BA, Marina-style house; 2500 sq.ft., $446/sq.ft., 2 pkg. 6% below original price; 55 days on market.

$1,120,000. South Beach at The Towers: year 2000, 2 BR, 2 BA condo; 1167 sq.ft., $960/sq.ft., bay and marina views, huge view terrace, $814/month HOA dues. 2% over asking price; 40 days on market.

$1,040,000. St. Francis Wood on Yerba Buena: 1924, 3 BR, 1.5 BA house; 1612 sq.ft., $645/sq.ft., 1 pkg. 5% below asking price; 118 days on market.

$1,030,000. Haight Ashbury on Masonic: top floor, 5-room, 2 BR, 2 BA, Victorian condo; “historically significant”, 1596 sq.ft., $645/sq.ft., 1 pkg. 8% over asking price; 5 days on market.

$1,020,000. Midtown Terrace on Midcrest: 1996, 6-room, 3 BR, 3.5 BA house; 1908 sq.ft., $535/sq.ft., 180 degree bay and ocean views, 2 decks, 1 pkg. 2% over asking price; 34 days on market.

$1,006,000. Lone Mountain on Anza: 3 BR, 2 BA, detached, Spanish-Med house; 2028 sq.ft., $523/sq.ft., trust sale, 1 pkg. 12% below original list price; 206 days on market.

$1,000,000. Noe Valley on Day: 3 BR, 2 BA, 6-room, Victorian house; 1286 sq.ft. with expansion potential, $778/sq.ft., 2 pkg. 26% over asking price; 28 days on market.

$1,000,000. Marina on Beach: top floor, 1929, 5-room, 2 BR, 2 BA, Spanish-Med condo; 1515 sq.ft., $660/sq.ft., 1 pkg, $650/month HOA dues.

$750,000 to $999,000

$985,000. Cow Hollow on Greenwich: 3 BR, 2 BA, TIC townhouse; 1650 sq.ft., $597/sq.ft., 1 pkg, $465/month HOA dues. 100% of asking; 45 days on market.

$940,000. Duboce Triangle on Henry: 1982, top-floor, 2 BR, 2 BA condo; 1391 sq.ft., $676/sq.ft., south deck, 1 pkg, $390/month HOA dues. 18% over asking price; 30 days on market.

$905,000. Hayes Valley on Buchanan: top-floor, 3 BR, 1 BA, Edwardian condo; 1578 sq.ft., $574/sq.ft., deck, 1 pkg. 3% over asking price; 41 days on market.

$873,000. Pacific Heights on Clay: 1962, top-floor, 3 BR, 2 BA condo in 12 unit bldg; 1300 sq.ft., $672/sq.ft., shared laundry, 1 pkg. 9% over asking price; 15 days on market.

$850,000. Bernal Heights on Coleridge: 1947, 3 BR, 2 BA house; 1358 sq.ft., $626/sq.ft., view deck, 1 pkg. 11% over asking price; 27 days on market.

$845,000. Miraloma Park on Rockdale: 3 BR, 3 BA, Spanish-Med house; 1770 sq.ft., $477/sq.ft., trust sale, 2 decks, $39,000 pest report, 2 pkg. 11% below asking price; 99 days on market.

$845,000. Diamond Heights on Gold Mine: 1966, 6-room, 3 BR, 2.5 BA house; 1964 sq.ft., $430/sq.ft., sweeping views, tenant occupied, 2 pkg. 108 days on market.

$844,000. Mission Dolores on 17th: 1993, 6-room, 1st floor, 3 BR, 2 BA, contemporary condo; 1242 sq.ft., $680/sq.ft., 1 pkg, $300/month HOA dues. 6% over asking price; 42 days on market.

$820,000. Lake Street on 25th: 1930, 5-room, 2 BR, 2 BA condo; 1300 sq.ft., $631/sq.ft., panoramic views, 1 pkg, $460/month HOA dues.

$806,000. Lake Shore on Berkshire: 1953, 6-room, split-level, 3 BR, 2 BA house; 1686 sq.ft., $478/sq.ft., trust sale, 2 pkg. 3% over asking price; 33 days on market.

$799,000. Central Sunset on 35th: 1932, 2 BR, 2 BA, Spanish-Med Rousseau house; 1740 sq.ft., $459/sq.ft., tenant occupied, 2 pkg. 100% of asking price.

$785,000. SoMa on Natoma: 1906, top-floor, 3 BR, 2 BA, Victorian condo; 1525 sq.ft., $515/sq.ft., 2 pkg, $200/month HOA dues. 1% over asking price; 35 days on market.

$780,000. South Beach on Beale: 2 BR, 2 BA condo at the BridgeView; bank sale, 1074 sq.ft., $726/sq.ft., outstanding views, 24-hour doorman, 1 pkg. 4% over asking price; 12 days on market.

$775,000. Noe Valley on Douglass: 1910, 2 BR, 1 BA, Victorian house; 1050 sq.ft., $738/sq.ft., expansion potential, deck, 2 pkg. 11% below original asking price; 171 days on market.

$765,000. North Beach on Francisco: 2001, 2-level, 2 BR, 2 BA, loft-style condo in the Malt House; 1033 sq.ft., $741/sq.ft., 1 pkg, $590/month HOA dues. 2% over asking price; 36 days on market.

$757,000. Parkside on 22nd: 1939, tunnel-entrance, 7-room, 3 BR, 2 BA house; 1509 sq.ft., $502/sq.ft., 1 pkg. 8% over asking price; 27 days on market.

$755,000. Outer Richmond on 37th: 1924, 6-room, 2 BR, 2 BA house; 1750 sq.ft., $431/sq.ft., 2 pkg. 2% over asking; 29 days on market.

$500,000 to $749,000

$700,000. Outer Richmond on 38th: 1925, 2 BR, 1 BA house; in-law apartment, 1450 sq.ft., $483/sq.ft., 1 pkg.

$660,000. Potrero Hill on Kansas: 2007, 4-room, 2 BR, 2 BA condo in 138 unit complex; 1077 sq.ft., $613/sq.ft., 1 pkg. 2% below asking price; 121 days on market.

$643,500. Inner Sunset on 17th: 1926, 6-room, 2 BR, 1 BA, Marina-style condo; 1550 sq.ft., $415/sq.ft., 1 pkg, $358/month HOA dues.

$620,000. Bernal Heights on Peralta: 1940, 6-room, 3 BR, 2 BA house; bonus room and bath, 1200 sq.ft., $517/sq.ft., 1 pkg.

$610,000. Pacific Heights on Scott: top-floor, 4-room, 1 BR, 1 BA, Edwardian condo; 748 sq.ft., $816/sq.ft., no pkg, $250/month HOA dues. 11% over asking price; 21 days on market.

$610,000. Merced Heights on Garfield: 2 BR, 1 BA house; in-law apartment, 1287 sq.ft., $474/sq.ft., ocean view, 1 pkg.

$605,000. Nob Hill on Broadway: 1982, 5-room, 2 BR, 2 BA condo; bank sale, 1097 sq.ft., $552/sq.ft., patio, 1 pkg, $631/month HOA dues. 5% over asking price.

$600,000. Sunnyside on Mangels: 1961, 8-room, 4 BR, 3 BA house; short sale, 1520 sq.ft., $395/sq.ft., 2 pkg.

$600,000. Outer Parkside on 48th: 1954, 6-room, 3 BR, 2 BA house; 1195 sq.ft., $502/sq.ft., ocean view, big deck, 1 pkg. 100% of asking price.

$595,000. Inner Richmond on 4th: 1907, 2 BR, 1 BA condo; bank sale, bonus rooms, 1314 sq.ft., $453/sq.ft., 1 pkg.

$580,000. SoMa on 8th: 1997, 1 BR, 2 BA, live-work loft/condo; probate sale, 1369 sq.ft., $424/sq.ft., 1 pkg.

$588,000. Outer Sunset on 43rd: 1954, 3 BR, 1.5 BA condo; 1235 Sq.ft., $476/sq.ft., ocean view, 2 pkg. 18% over asking price; 23 days on market.

$560,000. Lower Pacific Heights on Bush: 2 BR, 2 BA TIC; Smart Car included in sale, 1100 sq.ft., $509/sq.ft., $406/month HOA dues.

$536,000. Buena Vista Park on BV: 1986, 3-room, 1 BR, 1 BA condo; stunning downtown views, 734 sq.ft., $730/sq.ft., 1 pkg, $578 HOA dues.

$510,000. Crocker Amazon on Chicago: 1925, 5-room, 2 BR, 1 BA house; 1100 sq.ft., $464/sq.ft., large lot, 2 pkg. 3% over asking price; 30 days on market.

$510,000. Outer Mission on Alemany: 1940, 2 BR, 1 BA house; bonus room and bath, 1200 sq.ft., $425/sq.ft., 1 pkg. 3% over asking price; 33 days on market.

Up to $499,000

$488,000. South Beach on Berry: 2007, 1 BR, 1 BA condo at Park Terrace; short sale, 803 sq.ft., $608/sq.ft., 1 pkg, $468/month HOA dues.

$485,000. Excelsior on Dublin: 1944, 6-room, 2 BR, 2 BA house; trust sale, 1295 sq.ft., $375/sq.ft., 1 pkg. 22% over asking price.

$460,000. Bernal Heights on Nevada: 2 BR, 2 BA house; “contractor’s special”, bonus rooms, 1164 sq.ft., $395/sq.ft., 1 pkg.

$450,000. Ingleside Heights on Ramsell: 1961, 3 BR, 2 BA house; short sale, 1319 sq.ft., $341/sq.ft., 2 pkg.

$410,000. Oceanview on Montana: 1955, 5-room, 2 BR, 1 BA house; trust sale, 1050 sq.ft., $390/sq.ft., full basement, 2 pkg. 3% over asking price.

$380,000. Marina on Jefferson: 1991, 2-room condo; bank sale, 558 sq.ft., $681/sq.ft., no parking, $316/month HOA dues.

$380,000. Outer Richmond on La Playa: 1982, top-floor, 2 BR, 2 BA condo; 1043 sq.ft., $364/sq.ft., ocean views, 1 pkg. 9% over asking price; 29 days on market.

$348,000. Diamond Heights on Red Rock: 1972, 3-room, 1 BR, 1 BA condo in 396 unit complex; 830 sq.ft., $420/sq.ft., 1 pkg, $437/month HOA dues.

$329,000. Downtown on O’Farrell: 1930, 1 BR, 1 BA, Art Deco condo in The Hamilton; 945 sq.ft., $348/sq.ft., large bonus room, no parking, $723/month HOA dues. 11% below original asking price; 246 days on market.

$295,000. Bayview on Innes: 1927, 6-room, 2 BR, 1 BA house; bank sale, 1413 sq.ft., $209/sq.ft., 1 pkg. 16% over asking price; 24 days on market.

BR = bedrooms, BA = baths, days on market = the days between going on market and being designated “pending sale, contingencies removed”. Homes that sold at or over asking price will typically have accepted offers within 7 to 14 days of going on market (commonly after receiving multiple offers), even if it may have taken additional weeks to remove contingencies of sale and be designated “pending”.

Median price is that price at which half the sales occurred for more and half for less. It may be and often is affected by other factors besides changes in value, such as changes in buying patterns or available inventory.

Square footage is based on “livable space”, which may be measured in different ways, but should not include decks, patios, yards, garages, unfinished basements and attics, or rooms built without permit (“bonus rooms” and “in-law apartments”). Square footage figures are often unreported or unreliable. All median and average statistics should be considered approximations, and it is unknown how they apply to any specific property.


Markets Can Turn With A Vengeance

April 2012 San Francisco Update

Several times in the past 30 years, the San Francisco real estate market has turned up or down very quickly and very dramatically: in the mid-eighties – up; early nineties – down; 1996 – up (and up and up, except for the dotcom hiccup); 2008 – way down; and now we believe another dramatic turn up has begun.

By virtually every statistical measure of supply and demand, the city’s market is experiencing major acceleration. Multiple-offer, competitive-bidding situations have hit levels not seen in many years and this is putting strong upward pressure on values in many of San Francisco’s neighborhoods. The more affluent areas of the city – never much impacted by distress sales and now highly sought after by buyers – are leading the recovery.

We know this runs contrary to the Case-Shiller Index, but the city, and especially its higher-end segments, make up only a very small part of the Case-Shiller 5-county SF Metro Area, and currently the Index does not reflect the city’s market conditions and trends.

A new war or financial crisis might derail the upturn, but absent such an event, and considering the city’s improving economic conditions, we expect it will continue.

Two thirds of the city’s home sales now average a sales price over the original
list price. The competition between motivated buyers has heated up enormously.

SF is now seeing the highest percentages of listings accepting offers in memory.
For all property types. TICs have made a particularly dramatic turnaround recently,
probably due to the severe shortage of new and resale condos available to purchase.

The lowest ratio of expired and withdrawn listings – i.e. homes that do not sell,
typically due to being perceived as overpriced – in many years.

The lowest Months Supply of Inventory (MSI) readings in memory. For all property types.

An incredibly low level of properties available to purchase. Right now, properties are actually selling more quickly than new listings are coming on market.

Average Days on Market have crashed for all property types. A substantial percentage of listings is selling virtually immediately upon coming on market (i.e. within 7-10 days).

We’re starting to see upward movement in values in some San Francisco neighborhoods, especially those most popular with affluent high-tech buyers. Remember that market demand may take a while to translate into changes in values, and that different city neighborhoods are recovering at different speeds. San Francisco’s market is definitely recovering much more quickly than most other areas of the Bay Area, state and country.

The luxury home market is also seeing significant increases in demand and upward pressure on values.

The number of distress home listings is markedly decreasing (and, in any case, they are generally clustered in the less affluent neighborhoods and in the lower price ranges). If the recovery continues, fewer and fewer homes will require transfer as distress sales.

In case you missed it, here is a chart from our recent analysis of San Francisco demographics.

All data herein is from sources deemed reliable but may contain errors, and is subject to revision.

April 2012 © Paragon Real Estate Group


2012: An Accelerating Real Estate Market in San Francisco

“If I knew where I was going to live for the next five years or 10 years, I’d buy a home and I’d finance it with a 30-year mortgage. It’s a terrific deal — If I had a way of buying a couple hundred thousand single-family homes — I would load up on them. And I would take mortgages out on them at very low rates — [With] a 30-year mortgage — it’s a leveraged way of owning a very cheap asset now. That’s as attractive an investment as you can make.”

Warren Buffet, February 27th CNBC Interview on Investing

In January, we suggested that the San Francisco real estate market turned a corner in 2011, and indeed that we might be at a point similar to 1996, when the market began to accelerate after the 4-5 years of down market in the early nineties. (See the Case-Shiller chart below.) Consumer confidence, buyer demand and general economic conditions in the city improved markedly last year, and we also experienced surging high-tech employment and wealth (which looks likely to continue), skyrocketing rents, climbing stock market values and the lowest interest rates in history.

Everything we’ve seen since 2012 began only reinforces January’s conclusion. The major statistical measures of supply and demand – which constitute the dynamics that ultimately result in changes in value – show a market dramatically accelerating. Besides the statistics, this is also what we’re viscerally experiencing on the street, in the day-to-day business of representing our clients buy and sell real estate.

San Francisco often performs differently from other markets in the Bay Area, state and country, and this is the case now: our market is recovering sooner and more rapidly than most. (Though we do see signs of recovery in other markets as well.) However, the city itself is full of neighborhood micro-markets, which are recovering at widely varying speeds — or in some cases, not yet recovering. In real estate, generalizations only take one so far: ultimately, it always boils down to the specific home in its specific location with its specific conditions and circumstances, and the buyer demand for such a property.
All data herein is from sources deemed reliable but may contain errors, and is subject to revision.


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Months’ Supply of Inventory (MSI)
MSI is a measure of how long it would take to sell the existing inventory of homes for sale at current market conditions: the lower the MSI, the stronger the demand as compared to supply. For every property type in San Francisco, MSI is either at its lowest reading ever, or very, very close to it. Any reading below 3-4 months of inventory is typically considered a “Sellers’ market.” All SF property types now register as strong Sellers’ markets, though conditions do vary by neighborhood. Nationally, MSI has also fallen, but it is still over 6 months of inventory.


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Percentage of Listings Accepting Offers (by MONTH)
This is another excellent measure of demand vs. supply – the higher the percentage, the stronger the demand as compared to the supply of homes available to purchase. This measure increased dramatically in 2011 when compared to previous years, but since 2012, it has skyrocketed to levels we can’t remember ever seeing. The competition for reasonably priced, general-appeal homes is ferocious in many areas of the city, and multiple offer situations are more common now than they’ve been in at least 5 years.


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Percentage of Listings Accepting Offers (by WEEK)
Typically, in the first 6 -8 weeks of the new year, the market just starts to wake up. Not in 2012. This chart looks at the market WEEK by WEEK for the six months ending February 26th. In mid-January, demand exploded. And remember that the percentages for the last 4 months of 2011 were already much higher than in previous years. Many properties are selling immediately upon coming on market and the number of new listings is not coming close to meeting demand. This creates upward pressure on prices.


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SF Homes for Sale
On any given day, the inventory of listings available to purchase is dramatically below the levels of previous years, typically by 30%-50%. And yet the number of highly qualified and motivated buyers entering the market is increasing. Year over year, February’s closed unit sales were up about 14%, but on a hugely reduced inventory of available listings. If inventory was nearer normal levels, the number of sales would be much higher. In the meantime, the market has become very competitive in many parts in the city.


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Case-Shiller High-Tier Home Price Index
This Index ended 2011 pretty much where it began. The Index tracks house sales in a 5-county SF “Metro Area”, of which the city’s sales are only a small percentage. Even as our market has begun a recovery, the Index is pulled down by the other counties’ market conditions (not as positive as the city’s). The C-S High-Tier Price Index applies to the city best, but it still doesn’t apply all that well: for the 5-county Metro Area, the top third tier of sales in December 2011 started at $573,000; the city’s top third last year started at $860,000. (And it’s much higher in the city’s central and northern districts.) The higher the price segment, the less affected it is by distress sales; such sales cluster in the less affluent segments and significantly depress market conditions there. The 2012 SF market may be in a similar place to that of 1996, i.e. starting to accelerate after 4-5 years of decline or doldrums.


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Noe Valley-Castro-Cole Valley Market
Realtor District 5, in the center of the city, is one of the areas where the market has changed most dramatically – to some extent, due to being highly sought after by high-tech employees working both inside and outside the city. Though median sales price is an imperfect signifier of changes in values, and can fluctuate for a number of reasons, we believe in this case it generally reflects market reality. Huge buyer demand and extremely low inventory in District 5 are pushing prices higher: the median sales prices for both houses and condos have risen to their highest points since 2008. Click here for our full report.


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SoMa-South Beach-Yerba Buena-Mission Bay
The greater South of Market area is another one of the city’s markets that is noticeably heating up – again, to a large extent, due to surging high- tech employment and wealth. The supply of brand new condos for sale has dwindled since 2008, helping to create the biggest inventory crunch since this area started to be developed in the mid- nineties. This is exerting upward pressure on prices. For our complete report:
SoMa-South Beach Market Analysis


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Average Days on Market (DOM)
This statistic is easily distorted by a relatively small number of sales that sell after being on the market for a long time, and large fluctuations are not unusual. It certainly doesn’t reflect the average days on market for well-priced, well-prepared, well-marketed, general-appeal homes, which often accept offers within 1 or 2 weeks of going on market. Still, for what it’s worth, average DOM fell to its lowest point in years in February.


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SF Statistics by Neighborhood
We recently completed our semi- annual review of non-distress home sales by neighborhood; property type; bedroom count; low, high and median price; average size and average dollar per square foot. (Mixing distress and non- distress sales creates misleading statistics for both categories, so we separate them out.) This is just one of eight charts. For our complete report:
San Francisco Neighborhood Values


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What SF Buyers Bought in 2011
If you didn’t see our data-mining analysis of 2011 home sales in San Francisco, here is one panel of 14. You can find the full report, full of surprising details, here:
What Buyers Bought in 2011


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Mortgage Interest Rates
The impact that lower interest rates have on the ongoing cost of home ownership, especially when doing a rent vs. buy analysis in a city of soaring rents, can’t be overstated. Here, once again, is a graph of just how dramatic the changes have been in recent years. Courtesy of Julian Hebron of RPM Mortgage.


Who is San Francisco? Who We Are, How We Live, What We Do, How We Rank

How many San Franciscans: Trace their ancestry from China, Ireland, Mexico or the Philippines? Are children under 5? Speak Spanish at home? Have their cars stolen? Are heterosexual or gay? Divorced? Live alone? Give birth each year? Vote Libertarian? Earn over $200,000/year? Have graduate degrees? There is no city in the world quite like San Francisco – and here are some of the details.



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