Condos Outpace Single Family Homes

Our latest monthly and quarterly statistics have produced a surprising (or maybe not so surprising) insight into what's hot and desirable in the San Francisco real estate market -- 2 bedroom, 2 bath condos are selling at five times the rate of similarly configured single family homes and they're selling at a price that's 22% (with a price per square foot over 30% higher).

You can find all of our statistical reports (monthly sales, quarterly sales, etc.) at our web site.

Here are a couple of graphics showing the number of sales by real estate district:

Foreclosures Continue Downward Trend

The graphs tell the story (from ForeclosureRadar.com):

Notices of Default, the first step in the foreclosure process, are down:

Foreclosure Filings: California > San Francisco County > San Francisco

Foreclosure inventories are down:

Foreclosure Inventories: California > San Francisco County > San Francisco

The same is largely true for most of the surrounding counties, although Marin and San Mateo counties saw an uptick in notices of default in the last reporting period.

New Mortgage Qualification Rules

New rules are  being proposed by the Consumer Financial Protection Bureau (CFPB) that are likely to have impacts on the ability of buyers to obtain a mortgage.  The CFPB, created as a result of the financial reforms enacted by congress after the near financial collapse of 2008-2009, is setting out requirements that most banks (although not credit unions or "community banks") will have to follow to determine if prospective borrowers actually have the ability to repay their loan.

The most prominent feature of the new regulations is the requirement that the lender must determine that a borrowers total debt payments including their home mortgage, student loans, credit card payments, and child support not exceed 43% of their income.  There's a good itemization of other features in a Washington Post article.

Some of the new rules are likely to make it more difficult for prospective home buyers to secure a mortgage, especially in high cost markets like the Bay area.

It's too early to know what the actual effect on borrowing will be but one thing is almost certain -- the already cumbersome process some of the big bank lenders use today is likely to get even more convoluted, requiring more documentation, and will take even longer.

It's been a busy quarter

Since blogging isn't my primary occupation, I'll use that as the best excuse for the long time since our last update.  Since our last post we've had four closings -- a condo in Sausalito, two commercial condos in San Francisco, and a home in Pacifica.  And our experience is borne out by the broader sales statistics our monthly reports, the latest version of which will be available at boldsf.com in the next few days.  In the meantime, here are some highlights:

• There has been a definite shift in pricing toward the high end of the market.  
• The percentage of homes (condos and single family homes) selling for under $1million has fallen to 74% this year, down from almost 80% last year.  The last time this percentage was this low as back in 2008.
• 6% of sales in 2012 were over $2million.  In 2011 that percentage was 5%.  The last time the high end of the market represented this much of the total market was, again, back in 2008.
• The average sales price of a 2 bedroom, 2 bath condo in San Francisco breached the $1million barrier in December reaching $1,019,000.  This tops the three previous months where we've seen a steady climb in selling prices from $889,000 in September, to $893,000 in October, to $995,000 in November.  

And this does not appear to be a statistical anomaly -- the median sales price shows a similar steady increase. For the entire year 2012, 885 2 bedroom, 2 bath unit were sold. You have to go back to 2004 to see a greater volume of sales.