Jed Lane; The Fog City Guide & Trulia Top Voice in San Francisco

Market Watch July 1, 2010

 

The San Francisco real estate market saw closed transactions increase almost 18% over the prior month and over June of 2009. Those transactions that are under contract but not yet closed, declined by 17% over the prior year’s quantity, meaning that the number of sales will likely be down by the end of July.

Inventory has risen steadily since March of this year. Last year the inventory was very low. With this rising of available homes increasing since March the market has now surpassed the number of properties available compared to last year for the first time in 2010.

The market isn’t absorbing the properties as fast as they are coming on. The absorption rate, which is the time it takes for the current inventory to be bought at the sales rate of the previous month, for single-family homes is now 3.25 months and condos is at 4.75 months. This places the market in a “balanced” position. When the market is balanced neither buyers or sellers have advantage.

The median price rose to $815,000 for a single-family home and $692,500 for a condo. Combining those categories the median is $750,000, an increase of 2% over last month and an increase of over 6% from June of 2009.

In May 2010 the San Francisco real estate market still shows the effects of tight money, the lack of private money for mortgages and a majority of sales in the federal conforming loan limit ranges.

Sales within the federal loan limits are three times higher than the price points above it. (The conforming limit is $417,000 with adjustments for high cost areas like SF up to the “jumbo” conforming limit of $729,500). The interest rates as of May 28th for 30 year fixed loans; $417,000 is 4.75% with 0 points, $729,500 is 4.875% with a ½ point, $1,000,000 is 5.625% with 1 point.  

Although the trend is towards closing the gap in interest rates the majority of the sales within the federal lending limits is three times the amount of properties outside the limits. This fact keeps the median skewed low. The median price for single family and condominium residential properties in May was $712,000 for the City. That is down .02% for May 2009 and down 5.3% from April 2010.

The inventory of properties available dropped 3% over June 1, 2009 but was up 3% over May 1, 2010. Sales were up in last month, 34% over May 2009 and 25% over April 2010.  The absorption rates (3.07 months SFH & 3.9 months for condos) are hovering in the balanced area, leaning slightly towards the sellers.

If you are a buyer, be sure of your access to a loan and then get what you want. This is a great time to buy a home.

If you are a seller, be smart about the price point that you are in. If you are within the price range of the majority of sales then just prepare the property to be the most attractive home in its comparative market and price it accordingly. If your home is worth more than the amounts allowed by the federal programs be prepared to spend some time on the market, price according to the competition at the time that you hit the market – not at your opinion of worth – you want to stand out as a desirable value at the first blush. Be very sure to investigate the ability of the buyer to perform before changing status or taking the property off the market, momentum is very important.

What is the median where you live or want to live? Here is a chart of the sales for last month arranged by the Realtors districts. If you are not sure of which district to look at here is an interactive map .

The last informational meeting about the districts plans to revise the admissions policy next year us being held at Francisco Middle School in North Beach this evening. (2190 Powell Street 6:00 to 8:00 pm)

The school board is considering six options currently and will vote on a plan in February.

The options have been formulated by a research team from Duke University, Stanford University, Massachusetts Institute of Technology, and Harvard University. This same team worked with New York and Boston on the designs for their enrollments.

If you are interested weigh in.

 

When you, the buyer or seller, are choosing a Realtor what do you look for? Do you want an agent that lives and is part of the community where the property is? Do you choose a Realtor that’s knowledgeable of and participates in the activities of the community where the property is? Do you choose an agent that cares and gives back to the community, knows and has access to decision makers and leaders, is involved personally giving both time and energy towards the betterment of the neighborhood or the city or county where the property is? Or do you choose an agent that plays lots of golf or tennis with their free time and works only for the betterment of their own bottom line? If you expect us to give back, more will.

In the most recent Realtor Magazine the Good Neighbor award winners were profiled. The five awardees give time, expertise and resources to helping people in their communities and in other parts of the world. I discovered that working full time as a Realtor is not the same as working full time for a boss. Prior to becoming a Realtor, I worked at full time jobs with all the inherent restrictions on time and place flexibility. Even as my practice got busy I had free time during the day a schedule that I controlled. Shortly after becoming licensed the Mayor of San Francisco put out a call for volunteers for his Homeless Connect project. He asked that everyone give a day, eight hours, to the City in some way. This is my hometown and it’s always provided me with great pleasure – time to give back. It starts small but giving back grows as you find where your passion lies.

    Lending a helping hand is great but we real estate agents have a skill set that is unique. When taken as a whole, that skill set is needed in many areas and is quite useful. First and foremost we’re trained to actively listen, to put complex plans together, to negotiate for others, to handle large amounts of money, to be trusted and to provide consistency throughout long-term relationships. You will find that when Realtors sit on boards, committees or advisory groups they display leadership and an ability to build consensus. Realtors can fundraise with the best because we don’t have the same reaction to rejection. We can qualify people quickly and sell enthusiasm for any project that we believe in. We can market, write persuasively and listen for hidden agendas.

    There are many, many opportunities for Realtor involvement. It can be large or small, citywide or just where you live. It can be focused on an issue or the building of a large expertise to work on a long term problem. No matter where you start, once you start, you’ll find how much you can do and you will likely find issues that are very important to you. I’ve discovered issues that are important to me; they are building safe communities, the current community police reforms, neighborhood politics, planning & urban design initiatives and good government. I’ve networked with most of the decision makers in the City and I’ve met hundreds if not thousands of people all over the City.  

Part of what I’ve learned is that neighbors will come together because of a safety issue. From that core group of neighbors that address the safety issue they will move on to other neighborhood quality of life issues like graffiti, greening of the area, improving streetscapes and eventually economic development.  All of that actually is a direct benefit to the local Realtor!  It raises property values and creates the community that just about everyone wants to live in.  Realtors should be working right along with the neighbors to accomplish their goals.

In coming blogs I’ll write about groups in San Francisco that have changed their neighborhoods for the better. I will share the work of some really good people that have worked hard to improve, not only the neighborhood but the quality of the lives of the residents.

Stay tuned.

 

As a new decade starts the real estate market in San Francisco continues to show signs of strengthening. Open escrows are up 39% over January 1st of last year. Sales in December were up 31% over December 2008 and the median price of single family homes and condos is up 7% from the median in December 2008.

That’s all good, right? But looking at the median price by district there is a steep decline in price. (Remember these are the Association of Realtors districts not the Supervisorial districts. To view click SF Realtor District Map). While many things affect pricing and watching median pricing only serves to show trends, District 5 including Noe Valley and Glen Park had been white hot. Now the number of remodeled homes that were speculative has decreased. Contractors are holding off because money isn’t available for construction loans.

The median price represents the dollar value that is in the middle of all the homes sold during a period. Looking back at the distribution of prices it’s clear that the more expensive homes sales are declining in sales while the quantity of lower price homes increases. In 2004 the sales volume peaked and in 2007 the median price peaked in the San Francisco market.  Is every property worth less now than it was or is the median skewed by the sale of more less expensive homes? I say it is not. If you sell in this market you need to be prepared for this market. Making the property show well and positioning the price to be attractive are so important now, even more so than when every house would generate multiple offers. To get to the highest possible price the market will bear the seller needs to be strategic and the agent needs to be a very good negotiator.

So what was the median price and size in your neighborhood for December? The following chart shows the price, size and how long it took to sell the median home in your district. This was popular when I used it last month. I got comments from readers that it was handy to be able to compare your house with the one listed here as the median.

 

 If you are thinking about selling in the coming year all indicators say go ahead. There are buyers and the Federal tax credits are motivating people in greater and greater numbers. The activity is up as the open escrows show. In October and November there were over a thousand properties in escrow on the first day the month. That was in anticipation of the ending of the first-time buyer’s credit. Now that the credit has been extended and expanded San Francisco has over 300 more transactions in escrow this January 1st compared to last year’s January number.

Prices are rising, inventory is tight and buyers are buying. It isn’t 2004 as far as the sales numbers go and since money is tighter it isn’t 2007 where higher end homes were sold but interest rates are really low and the market is very active.  

By the way there are some great deals outside the City too. I’ve helped clients get condos under $300,000, some under $200,000, great homes in nice established areas for fantastic prices all around the Bay Area. Second homes or investment properties a solid buys. With the additional tax credit, it might be time to move to the sunshine and transfer the tax basis from your long held City home.

This is where the numbers were every year of the decade.

  

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November’s numbers are just in. While the SF Chronicle is reporting the pending sales rise of October here you have the November 2009 San Francisco Market Watch News and Anlysis

November sales were down 13% from October when our market had shown an 8% increase. The number of available properties also declined from 1725 to 1477 which is a decline of 17% thus keeping the absorption rate for single family homes at 2 ¾ months and condos are at 4 months.

The volume of sales will continue to decline as shown by the number of transactions that are in escrow as of the first of the month. The pending sales volume is down from October by 4%.

While the unit sales numbers are down from the previous month, they are far better than November 2008, in fact they are up by 39% and for the year sales volume will be up by 24% over 2008.

 

 Historically the volume of sales for single family homes held consistently above the 2500 units per year till we entered 2007.  Condominiums have risen obviously due to the increase in construction of the condos in our market. 

 

The next chart shows the market volume on a monthly basis. The volatility of 2007, with it’s general declines carried through all of 2008 which showed some seasonal spiking yet ended with an even lower volume than 2007.  Moving through 2009 we see the seasonal trend but we also see a little strength holding towards the end.


This is likely an indicator of the Federal Tax credit for first-time buyers that were set to end October 31, 2009. That impetus probably explains the continued activity more than consumer confidence or increased access to funds would.  The tax credit was eventually extended and expanded on November 9th.  The extension continues the $8,000 dollar tax credit for first time buyers and adds a $6,500 tax credit for “repeat homebuyers”. These tax credits work in similar ways. The credit is 10% of the purchase price up to the maximum of $8,000 and $6,500 respectively. The first time buyer is a buyer that has not owned a home in the 3 years prior to the purchase. A repeat buyer is anyone who has lived in a primary residence for 5 consecutive years out of the past 8 years. The Repeat Buyer Credit will allow families that want to move up into larger homes and empty nesters that want to move into smaller homes an opportunity to take advantage of the credit. Additional information can be found at the Federal Housing Tax Credit web site.

In looking at the volume of sales and comparing that to the drop in both sales and median price I decided to look at the changes in the market by comparing the volume of sales in price categories.  


The number that jumps out is the increase in the percentage of the under $500,000 sales from 2007 and the decline in percentages of the one to two million category. This shift shows clearly why the median price has dropped from the high range to the lower ranges of the $500,000 to $1,000,000 category.

The November median price for the City stayed relatively the same for condos and rose a bit for single family from October. Combined the number rose by 0.5% from November 2008.

So what was the median where you live? The following graph shows the median sale price for the month of November 2009 by SFAR district. If you perchance don’t know what district you live in here is a map.

For further information on the market or my analysis feel free to contact me.

The San Francisco real estate market is dancing with the market forces. The median price for a single family home in Spetember was $760,000 and the condo price is $675,000. Combined the median number stayed flat from the previous month.
The inventory of active listing at the first of the month increased by 10% over September 1 but is down 8% from the same month last year.
The absorbtion rate for single family stands at 3.4 months and condos are at 4.7 months. Sales in September were 3.75% higher than August and 16.3% higher than the same month in 2008.