Monday, June 19, 2017

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

New listings during the last two weeks were up a bit compared to the previous week but still well below compared to the same period a year ago.  There were 133 new listings of single family homes compared to 119 during the previous period and 127 a year ago.  There were 170 new listings of condos compared to 169 during the previous period and 234 a year ago.

Total new listings during the most recent two week period were 303 compared to 287 during the previous period and 361 a year ago.


A much smaller percent of new listing in the last two weeks went into contract (2.3% of single family homes and 5.9% of condos) compared to the previous period (10.1% and 13.7% respectively.  A year ago the percentages were 10.2% and 7.7% single family homes and condos respectively.


The total number of price reductions was slightly lower than during the previous period and significantly lower compared to a year ago (55 vs 58 vs 71 respectively).  The change was almost entirely in the condo market.

There were 22 price reductions of single family homes and 33 price reductions of condos during the most recent two weeks.  During the previous period the number of price reductions were 20 and 38 and compared to a year ago 23 and 46 single family homes and condos respectively.


Monday, June 12, 2017

Inventory - not much sign of improvement

Inventory is down compared to this time last year after a noticeable inventory increase (2016 compared to 2015) in two of the three condo configurations we track

Total active listings in the San Francisco MLS at the beginning of June for the five categories of single family homes and condos we track was lower than it has been since we began tracking this information in 2010 (376 units).




  • Survey is usually done within 5-8 business days of the beginning of the month.
  • These five configurations represent approximately 60% of residential real estate sales in San Francisco.


Saturday, June 10, 2017

Why Listings Don't Sell

Occasionally we see property listings that are "still available", or "price reduced" and its various euphemisms ("price improved", "price adjusted" etc).  There's an interesting article in RISmedia that attempts to outline the major reasons why listings don't sell

The number one reason:  "You overvalued your property".   I would word it a bit differently:  "Your property is overpriced given it's current condition" which takes into account reasons 5-10:
  1. You haven't had your home professionally cleaned. A dirty house is going to leave a bad impression on buyers. Make sure you have a professional clean your carpeting and windows before you begin showing your house.
  1. You haven't staged your home. If you've already moved out, then don't show an empty house. This makes it difficult for buyers to imagine living in it. Stage your house with furniture and decor to give buyers a better idea of how big every room is and how it can be used. You want the buyer to feel at home when they are taking the tour.
  1. You kept up all of your personal décor. Buyers are going to feel uncomfortable touring your house if you keep all of your family portraits up. Take down your personal décor so that buyers can have an easier time imagining themselves living there.
  1. Your home improvements are too personalized. You might think that the comic book mural you painted for your child's room is absolutely incredible, but that doesn't mean potential buyers will agree. If your home improvements are too personalized, it can scare off buyers who don't want to pay for features they don't want.
  1. Your home is too cluttered. Even if your home is clean, clutter can still be an issue. For example, maybe you simply have too much furniture in one of your rooms. This can make the house feel smaller than it is.
  1. Your home is in need of too many repairs.
It may seem counter intuitive that in a seller's market such as we have in San Francisco right now, but 5-10 matter.  In our market where the majority of listings sell for over asking, many buyers and agents who perceive your property is over priced won't even consider offering something less.  Better to slightly under price your property and let the market and competitive offers decide.  

After all, there is truth to the old adage: a property is only worth what a buyer is willing to pay for it.  

Monday, June 5, 2017

New Listing Market Watch - fewer listings, fewer price reductions

New listings for the most recent two week period are down compared both to the previous two week period and compared to the same period a year ago.  New listings of single family homes was 119 compared to 144 in the previous period and compared to 135 a year ago.  For condos, new listings were 168 compared to 203 in the previous period and 190 a year ago.



The percentage of new listings that went into contract dipped slightly for single family homes (10.1% compared to 11.8% in the previous period and compared to 10.4% a year ago).  For condos the percentage of new listings going into contract was down slightly compared to the previous period (13.7% vs 14.8%) but up compared to a year ago (13.7% vs 10.0%).


The number of price reductions of single family homes was up compared to the previous period (20 vs 16) but down slightly compared to a year ago (20 vs 22).  For condos the number of price reductions is down very slightly compared to the previous period (38 vs 39) and down more significantly compared to a year ago (38 vs 46).


The entire report can be found at our web site www.boldsf.com/Statistics.


Tuesday, May 23, 2017

New Listing Watch - more new listings, more in contract, and fewer price reductions

Overall, the number of new listings in the previous two weeks is down slightly from the same period a year ago (347 vs 366) but up 16% compared to the previous two week period (347 vs 299).

The number of new listings of single family homes was down compared to last year (144 vs 164).  New listings of condos was virtually identical:  203 vs 202.  Compared to the previous two week period new listings of both single family homes and condos were up as you would expect this time of year.



The percentage of new listings that went into contract increased sharply compared to the previous two week period (single family homes:  12% vs 3%; condos: 15% vs 3%).  Compared to the same period a year ago they were up modestly (single family homes:  12% vs 10%; condos: 15% vs 13%).



The number of price reductions is down significantly compared to the same period a year ago (single family homes: 16 vs 32; condos: 39 vs 45).  Compared to the previous two week period price reductions are down for single family homes (16 vs 21) but up slightly for condos (39 vs 36).


Thursday, May 18, 2017

HOA fees

I was checking out a new listing today at Opera Plaza and the monthly HOA fee of $950 caught my eye.  Seems like only only yesterday (but in reality it's been ten years) HOA fees in that building were in the $500-$600/mo range for similar sized units.  And, of course, those fees do not include parking and they aren't deductible in the same way that mortgage interest is.

It turns out that there are 68 currently available units listed in the MLS that carry HOA fees of over $1,000/mo.  Of those, all but two have an asking price of over $1,000,000.  21 do not include parking.

Another 71 listings have HOA fees ranging from $800-$999/mo.  112 listings have HOA fees between $500-$799 and 170 listings have HOA fees under $500/mo.

High HOA fees aren't entirely a bad thing.  In some ways they may indicate a very well run homeowners association keeping up with repairs, maintaining healthy reserves, avoiding costly special assessments and, possibly, providing a lot of services such as a staffed lobby, concierge, swimming pool and elevators -- all of which contribute to HOA costs.  Very low HOA fees can indicate an association without adequate reserves, very few services and possibly deferred maintenance and minimal reserves.

As HOA fees increase as a percent of your overall monthly housing costs it's all the more important to review the HOA disclosure documents to make sure you understand why the monthly fees are what they are and to get insights into likely changes in the future.





Inventory -- still down

We've been bemoaning low inventory in the residential real estate market for what seems like years now.  And just when you think things (inventory) may be looking up we take another dip:



Each month we take a snapshot of the number of active listings in San Francisco from the MLS in five different configurations of single family homes and condos/TICs.  The snapshot is taken usually on the 8th day of the month.

Last May inventory showed a very positive bounce off the lows in 2015 which capped five years of steady decline.  Many of us thought this might be the beginning of a steady increase.  However, this  year we see a decline in inventory across all five of the categories we survey*.

The New York times recently published an article that may partially explain continued low inventory, "Real Estate’s New Normal: Homeowners Staying Put" that shows home ownership tenure has been climbing for the last 15 years starting roughly at the beginning of the last recession.


Although their data represents a national survey and we know from experience the San Francisco doesn't always follow national trends, in this case they've identified at least one contributing factor that seems to apply here which is also supported by local anecdotal experience.  We hear from potential home sellers all the time "if I sell where do I go?"  For most people the only answer to that question is "away from the Bay area.



*The five categories of single family homes (2 bed/1 bath; 3 bed/2 bath) and condos/TICs (1 bed/1bath; 2 bed, 1 bath; and 2 bed/2 bath) represent approximately 60% of listings in the San Francisco MLS.

Monday, May 8, 2017

New Listing Watch - less inventory and fewer price reductions

At a time when inventory should be increasing, the number of new listings of single family homes has dropped compared to the previous two week period (118 vs 131) and compared to the same period one year ago (118 vs 147).  The number of new condo listings rose compared to the previous period (181 vs 142) but has not reached the level of a year ago (181 vs 202).



The percentage of new going into contract has also dropped compared to the previous period (single family homes: 3.4% vs 5.3%; condos: 3.3% vs 14.8%) and compared to a year ago (single family homes: 3.4% vs 8.2%; condos: 3.3% vs 7.4%).



The number of price reductions is up compared to the previous two week period (57 vs 44) but still way down compared to the same period a year ago (57 vs 95) which is mostly based on fewer condo price reductions (36 vs 66).   Condo sellers seem to have gotten the message that aggressive over pricing is a formula for their properties to sit on the market longer and ultimately achieve lower selling prices.


The entire report can be found at our web site.

Tuesday, April 25, 2017

New Listing Market Watch - fewer condo price reductions

New listings of single family homes stayed steady during the last two weeks compared to the previous two week period (131 to 128) and the same two week period last year (131 to 138).  On the condo side, new listings were down compared to the previous two week period (142 to 175) and compared to the same two week period last year (142 to 175).


However, the number of those same single family homes that went into contract during the same period is down sharply compared to the previous period (7 vs 24) and compared to the same period a year ago (7 vs 18).  Condos saw 15% of new listings go into contract (the same as the previous period) and up compared to a year ago (10%).


There was an increase in the number of condo price reductions compared to the previous period (27 vs 20) while single family homes stayed virtually the same (17 vs 15).  However, compared to a year ago the number of condo price reductions is down sharply (27 vs 47) while reductions on single family homes rose (17 vs 11).


Monday, April 10, 2017

New Listing Watch - strong market indicators

The number of new listings is up during the past two weeks compared to the previous period (128 new single family home listings vs 106 two weeks ago and 175 vs 132 new condo listings).  However, this increase is somewhat lower than a year ago.  In total there were 303 new listings compared to 238 two weeks ago and compared to 329 a year ago.


Of those new listings a much higher percentage went into contract during the same period (19% of new single family home listings and 15% of new condo listings compared to 6% and 6% for the prior period.  It's also higher than the same period a year ago (12% and 11%).


The number of price reductions during the last two weeks compared to the prior period was flat for single family homes (15 vs 13) and down for condos (20 vs 24).  Compared to the same period a year ago the number of price reductions was down significantly (15 vs 20 for single family homes and 20 vs 34 for condos).


Wednesday, April 5, 2017

Higher 1st Quarter 2017 Sales in San Francisco, part 2

In the previous post we noted that the number of residential sales is up comparing the 1st quarter 2017 vs 2016.  At a more granular level* here's what we see:

The number of sales is up in four of the five configurations we track (1st qtr 2017 vs 1st qtr 2016):


The average sales price is up in three of the five configurations:


The median sales price is up in two of the five configurations:


Average days on market is up in four of the five configurations:


And finally, the premium (sales price over asking price) is down in all five categories:

What do these numbers tell us?

  • The residential real estate market in San Francisco is still strong with the number of sales increasing and average prices increasing.
  • There is increasing pressure on lower priced properties (median price down).
  • There's slightly more caution in the market with DOM (days on market) increasing and premiums dropping slightly.

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* We track five separate configurations of homes for our monthly reports:
2br/1ba single family homes;
3br/2ba single family homes;
1br/1ba condo/TICs;
2br/1ba condo/TICs; and
2br/2ba condo/TICs

Those five configurations make up over 60% of residential sales in San Francisco.

Higher 1st Quarter 2017 Sales in San Francisco, part 1

Recently there have been several items in other blogs and publications suggesting that the number of transactions in San Francisco residential real estate is on the decline signaling a possible downturn or bursting bubble.

Statistics from the SFMLS show that the number of residential property sales (single family homes, condos, TICs, co-ops, but not including multi unit buildings) first quarter sales did decline in 2015 and 2016 an average of 9%/year (compared to the previous year) but are up almost 5% in 2017.



And our latest quarterly report of sales where we track five separate configurations of homes (eg. 2br/1ba single family homes; 3br/2ba single family homes; 1br/1ba condo/TICs; 2br/1ba condo/TICs; and 2br/2ba condo/TICs) average sales prices in the first quarter of 2017 are higher than they were for the same quarter in 2016 in 3 out of the 5 configurations.  See next post for details.

(BTW, those five configurations make up over 60% of residential sales in San Francisco).

Monday, March 13, 2017

Market Watch - annual trends continue

New listings continue to increase as is typical this time of year.  During the last two weeks there were 291 new listings (129 single family homes and 162 condos) which compares 245 (93 and 162) in the prior two week period and 277 (117 and 160) for the same period a year ago.

There was a considerably higher percent of those new listings which went into contract during that last two weeks (11% of single family homes and 15% of condos) compared to a year ago (3.4% and 2.5%).

The number of price reductions are about the same (10 single family homes and 28 condos) as they were a year ago (12 and 28) as well as the previous two week period (8 and 27).


Wednesday, March 8, 2017

Decline in Residential Sales?

Total residential sales (single family homes, condos, TICs, co-ops) in San Francisco as reported by the MLS declined in 2016, the third consecutive year of such declines.

The percentage reduction from the peak of the recovery in 2013 to 2016 is about 16%.  From the height of the real estate market just before the mortgage meltdown and subsequent recession the drop was more than 25%.

Since we haven't had a financial collapse recently we need to look for other reasons to understand the decline.  In no particular order here are some possible explanations:

  1. The pent up demand from the recession has worked its way through the market;
  2. There is a large number of new construction condos that have come on the market in the last several years.  (Most new construction condos do not appear in the MLS and are not included in the sales totals above).

Monday, February 27, 2017

Market Watch - condo price reductions

Price reductions on condo listings continues to be the story.  The number of new condo listings for the past two weeks is down somewhat compared to the same period a year ago (152 vs. 186 a  year ago) but even with fewer new listings the number of price reductions is up (27 compared to 22 a year ago).



The number of single family home new listings is down (93 compared to 121 a year ago).  Doing the math, total new listings for the last two weeks was 245 compared to 307 a year ago -- a drop of 20%.



The percentage of new listings going into contract with the two week window held steady at about 17% for single family homes and 16% for condos.


Wednesday, February 22, 2017

Value - Perception and Reality

Interesting study just published by Quicken Loans compares what people applying for refinance mortgages think their homes are worth compared to the value ultimately determined by an appraiser.  There's quite a difference based on geography:

Of course we're most family with the San Francisco market where the average 2-bedroom/2-bath condo sells for more than $1.2 million.  According to this study owners seeking to refinance that condo would estimate its value as about $25,000 less than the appraiser.

Frankly, I'm surprised there's such a LITTLE gap between the home owners estimate of value and the appraiser's calculation.  To me this suggests most owners seeking to refinance their mortgage are well informed about home values in their area.  San Francisco is almost obsessed with the cost of housing so maybe it's not surprising at all.

On the other hand, it's common to talk to prospective SELLERS who have an overly optimistic idea of the value of their property.  It would be interesting for someone to do a study of sellers initial perception/expectation of sales price vs. the actual sales price.

You can see the full Quicken report here.

Monday, February 13, 2017

New Listing Watch -- inventory climbs

On the standard roller coaster (or sine wave, if you prefer) that represents activity in the San Francisco real estate market, inventory and new listings have begun to increase right on schedule.


The number of new listings going into contract within the last two weeks has eased off for single family homes (15% vs 22% two weeks ago) but ticked up slightly for condos (15% vs 12%).


The number of price reductions has risen.  For single family homes there were 10 reductions compared to just 1 two weeks ago and compared to 10 a year ago.  For condos, there were 21 price reductions vs 12 two weeks ago and 11 for the same period a year ago.



Clients sometimes feel they're kind of like these guys.  They have a great view but feel somewhat precarious:


Monday, January 30, 2017

New Listing Watch - one month into the new year

As expected new listings continued to increase in during the previous two weeks -- 267 compared to 244 in the previous two week period.  Most of that increase was in condominiums which showed 176 new listings compared to 155 for the prior period.  Of the 91 new single family home listings, 20 went into contract indicating very strong demand.  Of the 176 condo new listings, 21 went into contract, about the same as the prior period.



A year ago during the same two week period there were 218 new listings.


Price reductions on single family homes were almost non-existent.  12 condos posted price reductions, about the same as during the previous period and compared to the same period last year.

Wednesday, January 18, 2017

New Listing Watch

Well, we skipped posting about the two weeks preceding January 2 because there wasn't much to report (and holidays).  The last two weeks of December routinely see the smallest number of new listings of any two week period and this year (last year) was no exception.

But now that's out of the way, things begin to pickup right away.  During the two week period ending January 16 there were 89 new listings of single family homes and 155 condos compared to 91 and 138 respectively during the same period a year ago.


There was only one price reduction of single family homes and 15 price reductions of condos.

As we've seen during most of 2016, price reductions of condos are outpacing those of a year ago and it looks like that trend will continue into 2017.

Almost 17% of the single family home new listings went into contract during the same period (compared to 11% a year ago) but that's consistent with the pace we were experiencing since roughly the beginning of November.   14% of condos went into contract (compared to 17% last year).  


Although the percentage of new listing going into contract dropped considerably compared to the prior period that's mostly a function of so few new listings.

The full report can be found at our web site:  www.boldsf.com/Statistics