New Listing Watch - the year winds down

Seasons Greetings!  This will be the last "New Listing Watch" for 2016 and gives us an opportunity to look back over the year's changes, always looking for clues to what lies ahead.

As anticipated and similar to a year ago, new listings for the past two weeks have dropped off dramatically (80 vs 130 during the previous two week period).  For the same period last year there were 70 new listings.

The number of new listings that went into contract in the last two weeks is also up significantly with 18% of single family home new listings and 32% of condo new listings going into contract compared with 9% and 16% two weeks ago as buyers (and their agents) try to get sales nailed down before the holidays kick in.  We saw similar numbers a year ago.

Continuing the trend we've seen most of the year, the number of price reductions in the last two weeks is considerably higher than a year ago:  11 single family homes and 20 condos saw price reductions in the last two weeks compared to only 3 and 5 respectively during the same period last  year.

The graph above shows quite well that price reductions this year far exceeded those of last year.  For single family homes there have been 485 price reductions this year compared to just 314 in 2015 -- a 54% increase.  For condos the numbers are 928 this year vs 437 last year -- a 112% increase.  

The number of new listings this year is just about the same as 2015 -- 7,063 so far in 2016 vs 6,717 in 2015.

In our other reports where we report on the number of sales of various configurations of single family homes and condos in San Francisco, the result of this price reduction pressure can be seen especially in condos where two of the three condo configurations we track are showing lower average sales prices than the average 2015 sales price.  For example, the average sales price of a 2-bedroom/1-bath condo in 2015 was $1,024,000.  So far in 2016 the average price has been $994,000.  That's not a huge drop but it is significant since it's the first drop in average sales price after four years of consistent increases.

New Listing Market Watch - the same as last year but different

There are certain patterns in the San Francisco real estate market that are as predictable as rain in winter.

Here's what we wrote a year ago for the same two week period.  It perfectly describes the most recent two week period:

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.

The number of new single family home listings during the two weeks ending December 5 is exactly the same as it was a year ago -- 56.  New condo listings were 74 compared to 75 a year ago.

There are two items of interest relating to condos.  First, the percentage of new listings that went into contract during the most recent two week period was significantly higher than for the same period last year:  16% vs. 3%.  

Second, although the number of price reductions during the most recent two week period is almost identical to a year ago, it's well below the average during the last six months: 19 compared to an average of 47 every two weeks since April.

Finally, based on the number of residential sales through the end of November, the total number of sales (as recorded in the SFMLS) will fall below last year.  This will be the third year in a row where annual sales are less than the previous year.  The last time we saw this trend was during the height of the recession (2007 through 2009).

New Listing Market Watch - heading to the holidays

Key takeaways from today's New Listing Market Watch (comparison are between the last two week period and the same period a year ago):

• approximately the same number of new listings during the last two weeks compared to the same period a year ago (177 vs 168).  If normal trends hold, we will see fewer and fewer new listings until early 2017;  
  
  
  
  
  
• a third fewer of the new listing single family homes went into contract (17 vs 10) compared to a year ago (13.3% vs 21.0%);

• although there were 17% more condo listings during the last two weeks than a year ago (102 vs 87), about the same percentage went into contract (20.7% vs 17.6%);
  

• there was a more than 50% increase in the number of condo price reductions (46 vs 30) and a 46% increase in price reductions for single family homes (19 vs 13).
  

The full report (and the other reports we publish) is available at our web site:  www.boldsf.com/Statistics

New Listing Market Watch

The number of new listing during the last two weeks is 17% higher than the same period a year ago (287 vs 245).  

The percentage of those new single family home listings going into contract jumped up to 12% (about the same as a year ago but significantly higher than the last four two-week periods.

The number of price reductions is about the same as it was a year ago for single family homes (26 vs 21) but quite a bit higher for condos (62 vs 47).

The market continues to follow the same seasonal cycle as in previous years so we should see a continuous drop off of new listings between now and the first week of January.  Although inventory will be reduced this time of year can provide good opportunities for buyers with less competition.

New Listing Market Watch

The more things change, the more they stay the same.

During the last two weeks we saw the drop off in new listings continue, as it always does this time of year.  There were 302 new listings of single family homes and condos during the last 14 days, down from 370 new listings for the prior period.  A year ago for the same period, there were 343 new listings.

The percentage of new listings that went into contract during the last two weeks was 7.9%, down slightly from the previous two-week period but considerably lower than the almost 15% during the same period a year ago.  For condos, the reverse is true:  during the last two weeks 14% went into contract compared to 9% the previous period and compared to 11% a year ago.

The jump in the percentage of condos going into contract is most likely due to the unusually high number of price reductions in condos during the last two weeks:  78 price reductions compared to 46 the previous period and 46 during the same period a year ago.  (Price reductions for single family homes was 28 compared to 25 during the previous period and 35 a year ago).

The number of condo price reductions is the highest we've seen in the three plus years we've been tracking these numbers.

So, as we've suggested previously, condo buyers should be taking advantage of the price reductions available as we approach the holiday season.

New Listing Market Watch

During the last two week the number of new listings matched almost exactly the number of new listings a year ago (370 vs 365).  If usual annual patterns hold (and they have every year since before the last recession) the number of new listings will continue to fall through the holiday season until after the new year.

The percentage of new listings going into contract within the last two weeks has ticked up, double the percentage we saw two weeks earlier.  For single family homes, this is almost identical to a year ago (8.4% vs 8.6%).  For condos, we're still significantly lower than we were a year ago (9.3% vs. 15.0%)

Also notable, during the past two weeks the number of price reductions for single family homes is identical to what we saw during the same period last year (13 vs. 13).  For condos, the number of price reductions is also about the same as a year ago (46 vs 41) and down significantly from the previous two-week period (46 vs 59).

Click here for the full report.

The state of TICs in San Francisco

1. Tenants-in-Common (TICs) are now about 9% of all sales in the condo/TIC market.  This is approximately the same percentage the last four years but well below the peak of 24% back in 2007.

2. Average selling prices are approx. 7-13% less than a comparable condominium.

3. TICs comprise approx. 13% of all condo/TIC listings. Average listing price for 2 bedroom TICs is currently is 9-13% higher than the comparable condo. This is an anomaly since historically TICs sell for below a comparable condo.


Click here to see the full report.

New Listing Market Watch -- (mixed signals after Labor Day)

During the last two weeks (which included the Labor Day weekend), the number of new listings increased compared to the previous two weeks.  This is generally consistent with what happens this time of year.  There was a particularly notable jump in condo listings -- 207 vs 122 for the previous period.  A year ago, new condo listings jumped up by 258.

New single family home listings were 159 compared to 101 during the previous period and compared with 185 a year ago.

The number of listing going into contract was at a very low level -- just 2 single family homes and 8 condos.  However, if previous years are a guide, these numbers should increase dramatically during the next few weeks.

Finally, price reductions for condos increased to 35 compared to 24 the previous week and compared to just 16 a year ago.  Price reductions of single family homes dropped to 10 compared to 20 during the previous period and compared to 19 a year ago.

The Ethics of Real Estate Photography

This is a big topic but here, in one screen grab, sums up my take (pardon the pun) on it.

A newish company in the real estate listing photography business is offering two "enhancement services".  1. They will add a blue sky to a photo instead of the gray sky that was there the day the photos were taken.  2.  They will turn the brown lawn green.  They normally charge extra for these services but during this promotion they are free.

In my view, one of these is OK and the other isn't.

We don't always have the luxury of photographing a listing on the perfectly sunlit day.  Adding a blue sky enhances the photo without changing the presentation of the property.  On certain days there will be a beautiful blue sky above; on other days there won't.  In any case the sky it's not part of the sale.

On the other hand, the brown lawn is going to be there until the season changes or new sod is installed.  It's part of the sale.  You could argue that the lawn will be green in the spring.  Maybe or maybe not.  And, the prospective buyer is going to see the brown lawn as soon as they arrive at the showing.  What message does that send?  What other edits or "enhancements" have been made in the marketing materials?  What other important information about the property is the seller/listing agent trying to hide or misrepresent?

New Listing Market Watch -- right on track (almost)

We could almost repost the same information we showed a year ago since  the number of sales and the percentage going into contract for the last two weeks is almost identical to a year ago.

During the last two weeks 90 single family homes came on the market compared to 102 last year in the same period.  4 homes went into contract compared to 2 last year.  129 condos came on the market during the last two weeks compared to 114 a year ago.  6 condos went into contract compared to 9 a year ago.

Price reductions for single family homes is also in line with last year:  22 during the last two weeks compared to 20 a year ago.  The only number not consistent with a year ago is the 33 condos posting price reductions during the last two weeks compared to only 13 last year.

New Listing Market Watch -- summer doldrums, kinda

New listings for the past two weeks are about the same as this period last year (239 vs. 229) and the number of listings going into contract is similarly similar to last year (32 vs 32).

This is traditionally the time of year when new listings drop until after the Labor Day holiday.

However, the number of price reductions is several times what it was a year ago.  During the past two weeks there were 28 price reductions of single family homes compared to 9 for the same period last year.  For condos, the numbers 42 vs 12.

The vast majority of these price reductions were for properties originally priced at over $1million.

New Listing Market Watch - fewer price reductions and fewer new listings

During the last two weeks, the number of new listings has gone down compared to the previous two week period (136 vs 197) and also compared to a year ago (136 vs 150).   The period -to-period fall off is typical for this time of year as we head into the summer doldrums.

The number of price reductions has also fallen rather dramatically compared to the previous period (50 vs 96) however, they are still well above last year at this time (56 vs 25).

Finally, the number of listings that went into contract has fallen compared to the previous period (30 vs 60) but is about the same as this time last year.

New Listing Market Watch - even more price reductions

The number of new listings during the last two weeks stayed just about the same as the previous two weeks (353 vs. 361) even with the holiday weekend.  But compared to the same period last year which also contained the holiday weekend the number of new listings is way up (353 vs. 187).

But the ratio of single family homes to condos did a complete flip flop compared to the previous period with single family home new listings at 197 vs. 127 and condos at 156 vs. 234.

The number of properties that went into contract is also up compared to the previous period (60 vs. 31) with both single family homes and condos seeing an increase (single family homes 29 vs. 13 and condos 31 vs. 18).  Compared to a year ago the number of properties that went into contract is higher (60 vs. 49) with single family homes and condos fairly evenly split.  Some of the increase in contracts may be a result of there being more properties on the market.

The number of price reductions during the past two weeks stayed higher and reached the highest point since we started keeping track in December 2014.  There were 55 price reductions of single family homes and 41 condo price reductions.  That ratio between single family home and condo price reductions is opposite what we've seen for the past two months.

While average selling prices seem to be holding at or near all time highs (at least for the categories we survey, which covers about 60% of the market), it appears that sellers are having to be more aggressive in their pricing strategies in order to entice buyers.

New Listing Market Watch - even more price reductions

The number of new listings during the last two weeks stayed just about the same as the previous two weeks (353 vs. 361) even with the holiday weekend.  But compared to the same period last year which also contained the holiday weekend the number of new listings is way up (353 vs. 187).

But the ratio of single family homes to condos did a complete flip flop compared to the previous period with single family home new listings at 197 vs. 127 and condos at 156 vs. 234.

The number of properties that went into contract is also up compared to the previous period (60 vs. 31) with both single family homes and condos seeing an increase (single family homes 29 vs. 13 and condos 31 vs. 18).  Compared to a year ago the number of properties that went into contract is higher (60 vs. 49) with single family homes and condos fairly evenly split.  Some of the increase in contracts may be a result of there being more properties on the market.

The number of price reductions during the past two weeks stayed higher and reached the highest point since we started keeping track in December 2014.  There were 55 price reductions of single family homes and 41 condo price reductions.  That ratio between single family home and condo price reductions is opposite what we've seen for the past two months.

While average selling prices seem to be holding at or near all time highs (at least for the categories we survey, which covers about 60% of the market), it appears that sellers are having to be more aggressive in their pricing strategies in order to entice buyers.

New Listing Market Watch - price reductions

The number of new listings of single family homes during the last two weeks is down compared to the previous two week period and also compared to the same time last year.  The opposite is true for condos -- the number of new listings is up compared to the previous two week period as well as the same period a year ago.

Usually this time of year we begin a period of fewer listings that lasts until after Labor Day.  There are signs that this pattern will hold true for single family homes but new listings of condos continues to rise.

The number of these new listings that went into contract during the same two week period is down slightly for both single family homes and condos compared to both the previous period and the same period a year ago.

The number of price reductions continues to be much higher than it was a year ago.  That's been true for four months in a row, since the end of February.

Residential Construction Projects Currently Underway

San Francisco Business Times recently published a list of the top 25 residential developments currently under construction in San Francisco which comprise 7,097 units including market-rate and below-market-rate rental and ownership (condo) units.

36% of those units, circled in green below, are in the Potrero Hill/Dogpatch/Mission Bay neighborhoods.  1,522 units are in the Potrero/Showplace Square/Dogpatch neighborhood and another 1,063 in Mission Bay.

The other big concentration is in the SOMA/Rincon area.

Keep in mind, these are projects that were first proposed to the city's Planning Department three to five years ago (2011-2013).  That's how long it generally takes from initial filing to final completion assuming 1-2 years for actual construction.  

Busines Times Rankings

Our company, Berkshire Hathaway HomeServices--Drysdale Properties, has been ranked #15 of 25 companies by gross sales in 2015.  We're #6 when ranked by number of properties sold!

New Listing Market Watch - more than last year

Here's a summary of changes since our last report:

• Fewer new listings than two weeks ago (325 vs 366)
• Somewhat more new listings than a year ago (325 vs 300)

• About the same percentage of new listings going into contract as two weeks ago (10.4% vs 9.8% single family homes and 10.0% vs 12.9% condos)
• Fewer price reductions of single family homes compared to two weeks ago (22 vs 32) and almost the same number of price reductions of condos (46 vs 45).  Compared to last year there were substantially more price reductions of condos (46 vs 17).

 

Below is a graph comparing new listings during 2015 compared to the first five months this year.

You can see that the 2016 new listings have mostly followed the same profile as last year until May (periods 9 and 10) when 2016 new listings grew more than they did in 2015.  It looks like the usual downturn in number of new listings we see in the July and August time frame has started a bit early this year.