Uncategorized | Real Data SF - Part 5Real Data SF

February 17, 2009April 17, 2023

January Data Sings the Blues

Here’s the latest sales data broken down by MLS District. Full reports are available here under the Market Trends Tab and are well worth a look.

Median and Average prices are down substantially year over year for single family homes in all districts except District 7 (“North”, which includes top-shelf enclaves like Pacific Heights and the Marina), but with only 2 sales for the month in that area, it’s not a meaningful statistic. Indeed, as I’ve pointed out in previous blogs, sales drop off so dramatically every year during December/January that I’d be cautious reading too much into the statistics for those particular months.

However, the three month moving average for SF as a whole, which smooths out the seasonal fluctation, has clearly been heading south since last summer, as these two charts show (also available, much more prettily, under that Market Trends Tab):

Details on individual MLS districts to follow in another post.

February 6, 2009April 17, 2023

DOM Roll Please

A couple of posts ago, we dispensed with Absorption Rate as a good barometer of the market since there appeared to be no correlation between how much inventory was available in relation to sales rates and where median prices were going. I asked whether there might be a different metric that would correlate better, like the oft-quoted Days on Market or “DOM.”

In essence, DOM tracks the average number of days that properties have been on the market from the time they became active on the MLS (Multiple Listing Service used by realtors) to the time they actually sell.

Great minds must think alike because it turns out that my friends over at Inside SF Real Estate have been exploring the same thing. Head over to their recent post for a look at DOM trends over 14 years. What they haven’t done, however, is track DOM against median prices. Ha! I have, and here are the results for the last three years tracked by month (my numbers are pulled directly from the MLS database — click to make the chart larger).

Now that’s what I call correlation! Note that the right-hand Y axis tracks DOM inversely, with longer periods at the bottom and shorter periods at the top. So, this chart is basically showing that during periods, even relatively short periods, when the average DOM falls, prices rise, and when properties stay “on the market” for longer, prices fall. This is just what you’d expect.

Why? My guess is that DOM captures many of the factors in play in the real estate market at any given time. For example, if credit is tight and appraisals are rigorous, you’d expect that transactions would take longer to get approved. Likewise, if lots of people are bidding on the same house, you’d expect that the winning bidder would promise a quick “no contingency” close and that there would be no haggling on the sale price. When the market slows, you’d expect more cautious buyers, more haggling on price, longer closing periods — all reflected ultimately in the DOM.

As my friends over at InsideSFRealestate pointed out in their post on DOM, realtors can play games with DOM. For example, if a property doesn’t sell, they’ll take it off the market, and then put it back on as a “new listing” at a lower price and voila, the DOM resets to zero. Still, that would just tend to increase the “down” side of the line — the correlation would still hold.

The only other point I’d add is to note the seasonal trend in the chart. It seems that every December/January, DOM increases and prices dip. Perhaps that’s the best time to buy.

February 4, 2009August 28, 2023

…And what $850,000 buys in Noe Valley

4317 24th Street @ Douglass originally listed back in October for a cool $995,000. It’s advertised as a 4 BR/2.5 BA. (Ahem. This is a fixer folks.)

Interesting to note that 4209 24th Street, just a block away and very much a fixer along the same lines, sold in December 08 for $896,000. That was $11,000 above the asking price.

February 4, 2009August 28, 2023

What $2.1 million buys in Noe Valley

Out on brokers’ tour yesterday, I looked in on two homes available in my Noe Valley neighborhood, priced within $2,000 of each other. 731 Douglass (at 24th Street) sold in March 2005 for $1.944 million and a mere $29o,000 in March 1997, when it was a sad-looking 1200 ft marina-style house, with a 6-car garage. Back then:

731-douglass-old

and now:

731-douglass-now

In 1999, the owners completely redid the building, right around the same time that my wife and I were remodeling our house just around the corner and converting it from a two-unit building into a single family home. At the time, there weren’t too many larger homes in Noe Valley. Now, everybody seems to be adding floors or building out the basement.

For $2,150,000 you’ll get 4 bedrooms, 3.5 baths, plus an office with panoramic views of the city on the top level, plus a good- sized family room downstairs. Around 3,000 square feet, based on the 2005 listing information. It’s a nice livable layout, has lots of light and the high quality finishes you’d expect.

What’s missing? No backyard, just a postage-stamp sized courtyard. Another possible negative: it’s across the street from Noe Courts and the bus stop for the 48 Quintara which might make it a little noisier than average.

Just up the hill and around the corner, on one of the nicest streets in Noe Valley, is 110 Hoffman Street @ 23rd, selling for $2,148,000 after two price drops. Originally listed for $2.395 back in November.

110-hoffman

This one sold a year ago for $1.2 million as a 1600 sf “fixer”. Well, they sure fixed it. It’s now just under 2900 sf, 4BR/3.5 BA family room/media room, and a built-out attic with panoramic views of the city, accessible by a spiral staircase. The flow of the space is not quite as good as 731 Douglass and there’s less of it. But it’s an impressive home nonetheless.

What 110 Hoffman has that Douglass doesn’t is a beautiful back yard and a location on one of Noe Valley’s best streets. Now that Hoffman’s price is returning to earth, it’ll be interesting seeing how these two thoroughbreds compete.

February 2, 2009April 17, 2023

Absorption R.I.P.

After talking to people about my last post on Absorption Rates and the lack of a correlation between slower absorption and lower median prices (or faster absorption and higher prices), I got the impression that there was some curiosity — skepticism? — about the underlying numbers. So I thought a post mortem of sorts was in order. Here’s a chart that simply tracks total listings and total sales over a little more than the two years covered by the Absorption Rate chart.
on-market-vs-sold

Total listings is defined as new listings plus anything that’s under contract but still “contingent” in the parlance of realtors. Total sales is exactly that. The chart reflects the raw monthly numbers with no averaging. This really highlights the seasonal fluctations: ie. the very evident drop-off in activity at the end/beginning of each year.

Other than the seasonal dips, maybe you can conclude that both listings and sales are trending downward, but I sure don’t see any evidence of a major change of direction in either.

A couple of closing thoughts. My absorption rate conclusions were based on an analysis of single family homes only. It’s possible that the conclusion would be different if I’d included condos and TIC’s as well. ie. Looking at the broader market might change the results.

On the other hand, it’s possible that correlations between absorption and price would appear if we looked at finer segments of the market. For example, we might find that absorption rates are longer at the high end of the market and that in fact prices have come down as we’d expect for that portion of the market.

Alas, the MLS database that’s the repository for sales information for brokers/realtors simply doesn’t allow you to do this sort of data-mining easily, so we’ll never know.

I stand by my previous conclusions: First, San Francisco just isn’t that overbuilt a market. Second, if you take out the seasonal fluctuations, the absorption rate doesn’t seem to have moved that much anyway. Finally, and perhaps most importantly, absorption rate doesn’t tell you how much activity (offers) each available listing is generating — in the end, just one property gets sold.

The question is whether there are other metrics that do a better job of tracking whether the market’s “hot.” Stay tuned.

December 18, 2008July 16, 2013

The Credit Crunch from the Other Side of the Desk

I’ve written a piece as a guest-writer for The Front Steps, one of the better blogs on SF Real Estate.

After talking to loan officers and loan brokers for several weeks about the lending environment, here are the takeaways:

Have “perfect everything”: high credit score, secure job, money in the bank and documentation to prove it all.
Figure you’ll be putting down a minimum of 20% as downpayment.
For the best long-term rates, to to a retail bank that you have a relationship with.

The complete article is here.

December 8, 2008July 16, 2013

Maybe it’s time to buy that first house….

That’s what New York Times journalist Ron Lieber discusses in Saturday’s Business Section. You can find a copy of the article here. Of course, nobody really knows where the real estate market is headed but Lieber suggests that now could be a good time to buy. Here are a few of the takeaways:

First-time home-buyers presumably have the down-payment sitting in the bank, so they can benefit from the drop in home values without having to worry about selling their own home in a depressed market to raise the downpayment.
Mortgage interest rates are currently pretty low by historical standards and could go lower if the federal government decides to try to drive them lower. If you can lock in a low rate for 30 years, that seems pretty smart.
The best deals may be in “new” housing, where developers are desperate to get out from under bloated inventories. Those inventories, however, are falling as construction of new projects has come to a halt. With winter being a traditionally slow time to move houses, now may be a particularly good time to buy.

Along these lines, a loan officer recently told me that he’d heard of a downtown high-rise condo that was listed for $1.1 million and was sold by the developer for $770,000 — just enough to pay off the loan amount attributable to the unit.

Continue reading “Maybe it’s time to buy that first house….”

October 30, 2008July 16, 2013

Dataquick vs MLS: why the discrepancies?

In my October 27 blog discussing the Case-Shiller Index, I referred to Bay Area County stats from Dataquick that showed San Francisco’s median prices to be down 12.7% from a year previous (YOY) vs. the 11.36% that I’d quoted in my October 23 blog.

The reason for the discrepancy? Dataquick compiles its figures from the San Francisco County Recorder’s Office; my numbers come from the MLS. Transactions like foreclosures or transfers between family members or between legal entities generally don’t involve agents or brokers so they don’t show up in the MLS. They also tend to be at lower values because they are often at below market rates, so Dataquick’s numbers will always be somewhat lower than the numbers pulled from the MLS. Thanks to Rick Campbell at the REReport for his quick response.