Friday, December 18, 2015

Statewide Numbers Also Show Sales Slowdown

PropertyRadar, which specialized in distressed* home sales during the recession has issued their statewide monthly statistics that show a similar decline in sales to what we recently reported for San Francisco.

Their numbers show a year-over-year decline of 3.1% comparing November 2015 to November 2014.

They also show November sales declining in roughly the same way for the past four years as our numbers showed for the 11 months of each year for the past three years.

Their primary explanation seems to be the new TRID disclosure rules** that went into effect in October that many real estate agents and mortgage brokers and lenders are still trying to get used to.  While that might explain a small decline this  year compared to last, it certainly doesn't explain the previous three or four year declines.

*Distressed properties are those where the owner owes more in loans and taxes than the current property value and, therefore, may require a short sale or similar transaction.

**Follow the link above if you really want to get down in the weeds with detail.  For a somewhat easier to understand explanation try this Fidelity National Title site.  Suffice to say the new rules mandate certain waiting periods that can lengthen the escrow period prior to closing.  Anecdotal reports we're hearing from our mortgage partners, do not suggest any across-the-board delays.

Wednesday, December 16, 2015

Number of Sales is Down for the First 11 Months

The number of residential sales (single family homes, condos/TICs) for the first 11 months of 2015 is the lowest in four years:

And, this is the second year of declining number of sales.  This year's sales through November were 4,676 compared to 5,140 in 2014 and 5,519 in 2013.  2014 was down 7% compared to 2013.  This year we're down 10% compared to 2014.

It's not clear what's causing the slowdown.  Possibly the large number of new construction condos that have come on line in the past three years is one factor.  (Our numbers are based on San Francisco MLS reported sales which, for the most part, do not include new construction sales).

Although the number of sales varies in a predictable pattern every year (recession or boom time), there was a notable decline this year in September with only 344 sales recorded in the MLS -- 100 fewer than the previous year.  That's the lowest number of sales in the 10 years of data we have in the MLS.

(Apologies for the very busy graph but it readily shows September sales this year as being the lowest.  It also shows the standard sales pattern in San Francisco of two peaks (Twin Peaks?) in sales every year centered around the spring market in May and June and then a second peak in October.

Monday, December 7, 2015

New Listing Watch - Seasonal Variations Dominate

Our New Listing Watch survey done today and looking back at the last two weeks shows the number of new listing and the number of new listings going into contract during that period to be almost exactly the same as a year ago.  This demonstrates the seemingly inexorable seasonal variations.we see every year at this time:  the number of listings will continue to go down until after New Year's when they will quickly increase and reach their spring peak in June.

Monday, November 9, 2015

Things that Bug Real Estate Agents

I saw a posting on another broker's web site over the weekend from one of their agents who apparently needed to vent about something that really bothers her under the caption "A Realtor's biggest frustration".

What is the BIGGEST frustration faced by this agent?  Booties!  That's right -- those little slip on booties provided at some homes for sale to protect floors and carpeting from whatever nastiness might be clinging to the bottom of the shoes of agents and prospective buyers. The alternative of removing your shoes is also deemed "offensive, undignified, inconvenient, ungracious, unnecessary and unsightly".

Her solution is for the listing agent to better educate their sellers (often referred to as "control your client").

Now I'm all for educating clients (sellers and buyers).  That's largely why they hire us to guide them through the process of selling or buying a home in all its aspects.  But any agent who pretends they can control their client is overreaching their responsibilities and doing that client a disservice.  It's always the client's decision -- it's their money.  Some clients may give you more latitude than others but that is also their decision.

I’d say the bigger frustration is agents who visit our listing and give gratuitous advice on how we should work with our seller who they’ve never met.  Now that’s a frustration!

New Listing Watch - Fewer New Listings

The number of new listings in the last two weeks (245) has dropped significantly from the previous two-week period (343) and also from a year ago (347).

The percentage of new condo listings to go into contract has also dropped compared to the previous period as well as compared to a year ago.

Thursday, October 29, 2015

New Listing Watch - Fewer Properties in Contract; More Price Reductions

Today's latest "hot sheet" activity for the previous two weeks appears to be almost exactly what it was last year at this time.  Inventory begins to rise after the Labor Day holiday and for the next ten weeks inventory grows by about 400 homes each month.

For 2015 during the past eight weeks as measured in our survey the number of new listings (single family homes and condos/TICs) is 1493.  For the same period in 2014 there were 1486 new listings.  In 2015 the number of price reductions were 98 single family homes and 129 condos for a total of 227.  For the same period in 2014 there were 118 price reductions for single family homes and 112 reductions for condos for a total of 230.

It's interesting to note that the number of properties going into contract for the last two weeks were 130 compared to 181 last year, a reduction of almost 30%.

Saturday, October 17, 2015

Where are all the cash buyers?

With all the talk about how cash buyers are king/queen in the San Francisco real estate market and how ordinary buyers who need a mortgage are being beat out at every turn it's a little surprising to see this report from Zillow that shows San Francisco is one of the lowest markets in terms of percentage of cash buyers.

Of the 47 metropolitan areas listed, San Francisco is 39th (and San Jose is 42nd).  The highest percentage of cash buyers appears concentrated in Florida.  The top four area are Miami-Ft. Lauderdale, Sarasota, Ft. Myers and Tampa -- all with more than 50% cash buyers.

The explanation may be as simple as homes in the Bay area are generally more expensive than in many eastern cities.  According to Zillow's numbers, the "median home value in Miami is $289,200" compared to San Francisco's median home value of $1,094,500.

Tuesday, October 13, 2015

New Listing Watch - Two Weeks Ending 10/12/2015

The total number of new listings continues to keep pace with a year ago but the split between single family homes and condos has changed.  This year there are more condos (213) than single family homes (152) that came on the market in the last two weeks.  Last year the numbers were reversed with more single family homes than condos.

New listings going into contract is up for both single family homes (8.6%) and condos (15.0%) after being in single digit percentages for the previous two reports.

Another change from the previous two reporting periods to note is the uptick in price reductions.  The number of condo price reductions was 41 -- the highest we've seen in a long time.  There are obviously some motivated sellers out there who, apparently want to sell before the end of year holiday doldrums kick in.

Wednesday, September 30, 2015

New Listing Watch - Two Weeks Ending 9/28/2015

The number of new listings of single family homes and condos coming on-line in the last 14 days is consistent with a year ago.

However, our report shows that the number of listings that have gone into contract  is remarkably low this year versus last year. 

Now, this could signify that buyers have decided that these offer dates  which drive the over bidding is something they want to avoid. 

We also note that the number of price reductions continues to increase for both single family homes and condos. 

We continue to believe that  this Hot Sheet Report is the closest to a leading indicator of market activity than anything else we have been watching.  As we continue to survey our market, we advise sellers to price properties consistent with current neighborhood selling prices, but depending on location, offer dates should be used with caution.  Buyers should become VERY active with their searches and keep a sharp eye out for price reductions!

Do Photos Sell Real Estate?

I ran across an interesting article today that claims "the number of photos included in the listing has an influence on how fast the home sells."  They quickly qualify this claim by saying that in the Bay Area there is little correlation between number of photos and speed of sales unless the listing is on the market for more than 20 days.

The article is based on a study done by the on-line real estate brokerage famous for their notorious "Zestimate" which purports to estimate (get it?) the market value of residential properties whether on the market or not.

This article originally caught my eye because I spend a lot of time taking quality photographs of listings for myself and other agents and I've always believed that quality photos have become an increasingly important marketing tool ever since listing information became widely available on the internet.  But this article goes too far when it says that a property listing with more photos will sell a faster than a listing with fewer photos.  And if you look at Zillow's actual study you'll see they make no such claim.

There are far more significant factors that affect the speed of a sale -- the most important are:
  • demand vs. supply
  • asking price compared to perceived value
The market in San Francisco is a great example of the first point -- there is great demand resulting in many listings receiving multiple offers well over asking price, often within two weeks of the initial listing.  The second is just common sense -- if buyers perceive the asking price to be greater than actual value they do one of two things.  Either they simply look elsewhere or they may make an offer under asking price and closer to what they believe is the market value of the property.  In a market like our current market in San Francisco, buyers won't bother to make an under asking price.

This is not to say that listing photos aren't important but the effect of listing photos is more subtle and nuanced and probably not subject to easy quantification.  Our experience (and that of our colleagues) tells us:

  • It's extremely important that photos accompany a new listing when it is first published.  Especially in a competitive market, agents and their clients are watching for new listings very closely.  If a new listing surface with few or no photos, the reaction is generally to skip by that listing (and not come back for a second look) and a suspicion that there is something wrong with the property "so they're not showing us what it actually looks like".
  • Quality photos create the impression of a quality property for both buyers and agents -- and the opposite is true as well, with poor quality photos suggesting the property is in poor condition and in need of repairs.
  • "Missing" photos also lead to suspicion that there is something wrong.  If there are no photos of key rooms such as kitchens and bathrooms buyers and agents are likely to think the worst.  Same thing if there are no photos of a feature mentioned in the description. 
  • The photos must reflect the reality of the property.  If there a utility poles and wire in front, 

Monday, September 14, 2015

As Predicted, New Listings Soar

Right on schedule, once the Labor Day holiday is behind us new listing volume has jumped up.

New listings of single family homes in the two weeks ending 9/14/15 jumped to 185 compared to 98 during the prior two week period.  Even more dramatically the new listings of condos reached 258 compared to 122 during the prior two week period.  This pattern (summer doldrums followed by a surge at the beginning of September) shows itself every year.

Nevertheless, total new listings is lower by 6% compared to the same period a year ago, which continues the trend we've seen during most of this year.

The full report can be found here.

Wednesday, August 26, 2015

A Little Perspective

It's been a nerve wracking few days on the stock market.  But here's a little perspective:

For most prospective home buyers, it's probably best to focus on the 5-year time span which would be the typical minimum hold time.

As they say, past performance does not guarantee future results.  And the stock market it not necessarily the best predictor of future property values and the stock market is not the economy and the economy is not the stock market.  Nevertheless, if you think  of your real estate purchase, at least in part, as an investment this will give you some context.

Tuesday, August 25, 2015

Listings, Search Engines, and Accuracy

Not all real estate search engines are the same (doh!).  In a fast moving market like ours today clients, especially sellers, want their listings to show up right away on all the various search engines  This is especially true if there's been a significant change to the listings -- a price reduction, for example.

Here's a good example:

This agent had entered a price reduction into the MLS on 8/21/15.

As of today (8/25/15) that price reduction is only showing up on

The search results summary shown at the top show that Zillow and Redfin were still displaying the old price of $588,850.  Clicking through to see the detail, Redfin actually shows the correct, reduced price but Zillow does not.

The likely reason for this discrepancy is the way these search engines get their data. gets feeds directly from the hundreds of MLS (multiple listing services) across the country.  Zillow, Trulia and other aggregators also depend on direct feeds from real estate brokers as well as direct input from individual agents.

The bottom line for clients is:  stay as close to the MLS for information as you can.  Most MLSs in our area have a public version that anyone can search.  For currently active listings (properties not already in contract), it's the most accurate source.  You can usually set up (or have your agent set up) a search that will e-mail regarding new listings or change in status of a listing.  The aggregators can do this too but, as shown above, it may take a while.

Wednesday, August 19, 2015

New Listing Watch - two weeks ending 8/17/2015

Two weeks ago I mentioned that the drop in new listings was consistent for this time of year -- we see it every July/August until post Labor Day.  And the number of new listings continues to be lower than a year ago.  Although new listings for single family homes remains flat at 102 but condos was a different story with 114 this year compared to 149 last year.  In total new listings during this two week period are down 15% compared to last year.

What's even more interesting, the number of these new listings that have gone into contract already is at its lowest level since we've been keeping track.  This year just 11 of these listings (2 single family homes and 9 condos) are already in contract compared with 27 (11 single family homes and 16 condos) last year.

So, if you're looking to buy but reluctant to take on all the potential competition, now appears to be as good a time as any in the recent market.  Of course this doesn't mean there won't be competition, especially on the most desirable properties -- it's just no likely to be as intense.

See the entire report here:

Wednesday, August 5, 2015

New Listing Watch -- 2 week period ending 8/3/2015

Earlier this week we posted our biweekly report on new listings for the previous two weeks.

Not surprisingly for this time of year, inventory (new listings) continues to drop.  We see this cycle every year with fewer listings starting at the 4th of July holiday and continuing until just after Labor Day.

Also, continuing a trend for most of this year, there have been fewer new listings for most of the two week periods this year compared to the same period last year thus exacerbating the low inventory problem which then contributes to overbidding and higher and higher prices.  Compared to the same two week period last year new listings were down 22% from 290 to just 229.

See the entire report here:

Monday, July 20, 2015

New Listing Report -- Some Good News for Buyers?

We've just updated our report of new listings which we do every two weeks.  It shows the market's usual seasonal variations are consistent this year vs. a year ago but the total number of new listings is down compared to the same two week period last year.

In the two week period ending 7/20/15 there were 150 single family homes newly listed for sale compared with 137 last year.  However, there were only 179 condos listed compared to 246 last year -- so, 28% fewer condos but almost 10% more single family homes.

The report also shows that 11% of those new single family homes listing went into contract -- well below the typical percent during the last few months which has hovered in the high teens and low twenties percent.  For condos, the percentage of new listings that went into contract within two weeks was 9.5%, the lowest since October of last year.  Typically, this percentage has been in the low to mid twenties.

Overall, this may be good news for buyers -- although overall inventory continues to trend downward, competition may be easing just a bit.

Wednesday, July 15, 2015

2nd Quarter Results

The performance of the San Francisco real estate market in the first six months of 2015 has been just breathtaking, even for those of us who have been through many market adjustments/cycles.  Over 60% of sales was for over $1,000,000 with 20-25% of them being all cash.  Typical days-on-market for this group varied between 20 to 28 days.  And the average selling price for single family homes were about 20% over list price.  For condominiums the average selling price has been about 10% over asking.

Our condo market has been the prime source providing new housing, albeit well short of what would be required to meet today's demand.  In 2005, considered to be the height of the market prior to the recent recession, condos were 58% of the residential market with single family homes making up the remaining 42%.  In the first half of this year condos have risen to 67% of residential sales and single family homes have fallen to 33%.  With only 49 square miles of land, and land-locked on three sides, the only place to grow in San Francisco is up.  The city anticipates that 10,000 to 20,000 units are currently in the concept, planning or construction stages for the next 10 years.

We've been surveying the San Francisco and Marin real estate markets for 16+ years at our web site BOLDSF.COM because our clients wanted more than just one number to help them analyze their planned sale or purchase.  We survey specific configurations of single family homes (2bd/1ba, and 3bd/2ba) and condominiums (1bd/1ba, 2bd/1ba and 2bd/2ba) in San Francisco and similar configurations in Marin.  These configurations in our surveys comprise approximately 62% of total sales as reported in the San Francisco MLS.

From our data it's easy to compare year-over-year growth and the pre-recession highs for each category.

2015 vs 2014
$ Change
2015 vs 2014
% Change
2015 vs Pre-Recession
$ Change
2015 vs Pre-Recession
% Change
Single Family 2bd/1ba
Single Family

It's really getting tough to find any property priced below $500,000 in San Francisco.  They were only 60 total sales under that price point in the first six months of the year.  Of those, 20% were controlled by a city-mandated program which severely restricts the amount of increase allowed each time the property sold.  The program also places income restrictions on buyers.  By year's end, a $500,000 listing will mean it's almost certainly a "below-market-rate" unit.

We are asked all the time "are we beginning to see another real estate bubble" and "are we due for another "downturn".  We currently see no major changes in available inventory (low) and no increase in demand (high) which might normally indicate a shift.  Even when interest rates inevitably rise, it will probably not affect 20-25% of residential sales.  Instead of 10-20 offers, a seller might get 1-5 offers.  Hopefully, pricing will moderate although there will remain "pockets of popularity" where things won't change much.

For a comprehensive look at our statistical reports at our web site BOLDSF.COM.  You will find our various reports for San Francisco and Marin counties.  We always appreciate referrals if you have someone who might be entertaining a move to the San Francisco bay area.

Tuesday, July 7, 2015

Inventory Continues Downward

If you've been paying any attention to the San Francisco real estate market in the last year or so the constant refrain has been "low inventory" (along with "soaring prices", of course).

As if we had any doubt, our bi-weekly survey of new listings has just been posted and it shows the number of new listings for the two-week period ending 7/6/2015 to be even lower than the comparable period last year.

In 2014 the number of new listings in the two weeks ending July 8 was 229 (107 single family homes and 122 condos).  This year in the two weeks ending July 6 the number of new listings was just 187 (89 single family homes and 98 condos).  That's almost 20% fewer new listings than a year ago.

Sunday, June 7, 2015

Number of Sales Fall in San Francisco

The number of residential sales* so far this year is well below last year and the lowest it's been in five years.

It's a busy graph -- click on it to see a larger version.

The line in dark red shows sales so far for 2015.  In every month this year except March sales were lower than they were in 2014.

Although historically May sales have always (since at least 2007) been higher than April, that is not the case this year.  Our peak sales months are May or June but this year it looks like April may be the peak sales month.

*Total sales reported in the San Francisco MLS for San Francisco county including single family homes, condos, TICs and co-ops.

Friday, May 22, 2015

Some Perspective on Current Market Conditions

Arithmetically, the performance of the San Francisco real estate market in the first four months of 2015 can be described as nothing short of dazzling.  Professionally, with each passing day as property sales are recorded and the specifics of each sale are revealed on our MLS, the aggressiveness of these buyers it just takes your breath away even for those of us who thought we had seen it all.

Of the 1,490 closed residential sales (both single family and condo/TICs) reported to our MLS, 883 (59.3%) sold for over $1 million.  The remainder (567 homes, 40.7% of the total) sold below that magic number.  By way of comparison in 2013 and the first nine months of 2014 only 38% of homes were selling above $1 million.

The largest single category of home sales have been in the $800-$999k range where 449 sales comprised 30.1% of all sales.  The next largest category is the $500k-$799k range with 261 sales (17.5%).  Of particular note are the top and bottom ranges where there were just 43 sales (2.9% of the market) had selling prices in the $1-$499k category.  The top range (over $2.5 million)  had 138 sales (9.3% of the total).  Of the 43 homes below $500k, seven were “below market rate” units where the city mandates the maximum selling price.

Looking at just condo/TIC listings of 1 bedroom/1bath, 2bedroom/1 bath, and 2 bedroom/2 bath properties most listings generally sell  and close in 23-35 days with an average selling price 6-15% over listing price.  Their respective average selling prices are $747k, $1 million, and $1.4 million.  Talk about “sticker shock”!  In most parts of the country, those results would be considered exception but, alas, in San Francisco they are now considered just typical.

San Francisco new construction will continue to add primarily condominiums in the next ten years.  It is estimated there are 10-20,000 “in the pipeline”.  Given the land-locked nature of San Francisco only a few single family homes will be added and condos will increase their dominance in the residential market.  This should mean that single family homes will become even more valuable as they become a smaller percentage of the market inventory.

After 16 years of keeping statistics for our San Francisco clients (, it appears that for the foreseeable future demand will continue to far outstrip available inventory with cash-laden buyers making all-cash offers with few or no contingencies and two week closes more common.  We see examples of these sales almost daily.  Just one example is a 3 bedroom/1 bath single family home on Potrero Hill (where incidentally the author has owned a home since 1974) that has not been on the market for at least three decades but in good but not updated condition.  This listed for $869k which was appropriate based on recent sales.  The winning buyer closed in 13 days with a selling price of $1.465 million!  An agent in our office has a client who offered $1.1 million, no contingencies and a 12 day close.  His offer ended up in the middle of 16 other offers.  In a normal market his offer would have been considered a slam dunk pre-empt.
Just this morning at our regular office meeting we heard from representatives from Fidelity and Chicago title companies talking about the coming changes effecting real estate transactions beginning Aug 1st and they mentioned that between 20-25% of recently closed transactions in San Francisco were all-cash deals.

So if you or your client are considering moving to San Francisco or the Bay area, we will be happy to assist you and your client in navigating this market.  It appears this is the new normal.

Thursday, May 21, 2015

Rent vs Buy?

Trulia recently published an updated report comparing costs to rent vs. buy in a number of real estate markets.
(Click on the map to embiggen).

I've highlighted the San Francisco market.  Click here to see the full Trulia article where you can play with some of the assumptions included in their calculations.  They also offer a full calculator where you can plug in numbers specific to your situation.
One of the main points of their article is to be sure to include the cost of monthly home owners association (HOA) dues.  We've noticed a significant increase in dues over the past few years and they can make a significant impact on your rent vs. buy situation.

Wednesday, April 22, 2015

Price differential between condos and TICs - update

We recently updated our quarterly report that looks at the differential between condos and TIC pricing.  TICs continue to have lower selling prices than comparably categorized condos.

The differential in sales prices is higher this year than the same period two years ago for two of the three categories (1br/1ba and 2br/1ba).  In the third category (2br/2ba), there were only two units sold in the first quarter of 2013 averaging more than $1.1million so the differential between 2br/2ba condos is distorted.

In a difficult and competitive market, TICs remain an attractively priced alternative.

The full report can be found on our website.

Monday, April 13, 2015

Little change -- low inventory

I've been away from the blog for a while but, as far as inventory is concerned, you haven't missed much.  We continue to have lower than normal inventory and lots of demand.  And even in San Francisco that's a formula for lots of competition and, ultimately, sales prices exceeding asking prices by an average 7-20%.

From our latest report here's a graph showing new listings (single family homes and condos) during each two week period.

We've been doing this report for almost two years so you can see that compared to last year inventory has followed the same cycle (as it does most years) with the lowest inventory between Thanksgiving and Christmas and then a steady climb into the spring market.  The difference is the number of new listings during each two week period this year is noticeably lower than it was last year.

The full report can be found at this link.

Monday, February 23, 2015

Luxury Collection Specialist

Just received my certification from Berkshire Hathaway HomeServices:

Sunday, February 15, 2015

Another perspective on the lease vs. buy debate

Many professional real estate associations in California publish or subscribe to standard forms documents/libraries.  Real estate agents routinely use standard forms from the California Association of Realtors.  In San Francisco our realtor association has its own purchase agreement forms and related documents.

These libraries of forms are created usually by committees of lawyers and practitioners with day to day experience in the field as well as expertise in local and state laws which affect real estate transactions, ownership and tenancy.

The San Francisco Apartment Association recently released its updated standard lease form.  As it points out in a recent article, they started publishing this form 25 years ago as a 4-page documents.  It has now grown to 17 pages!  And that doesn't include several addenda that it recommends depending on circumstances -- ranging from topics such as bedbugs to parking to pets to tobacco smoke disclosure.

By comparison, the standard purchase agreement from the San Francisco Association of Realtors is 7 pages long.  The California Association of Realtors purchase agreement form is 10 pages.

In the perennial debate over whether it's better to buy or rent (San Francisco throws many additional complex considerations into the mix), the difference between the length of a purchase agreement and a rental agreement provides a perspective you should consider, whether you're contemplating purchasing a single family home/condo, a multi-unit property, or if you're about to sign a lease.