New Listing Market Watch -- price reductions

As is typical this time of year the total number of new listings (single family homes, condos/tics/co-ops) in the last two weeks declined and are at lower levels than a year ago by about 2%.

New listings of single family homes are down by 21 (18%); condos actually had 15 more new listings than last year at this time (12%).

The number of new listings that went into contract over the past two weeks has increased compared to the previous period and compared to a year ago.  There were 17 single family homes (17.9%) and 21 condos (14.7%).

The number of price reductions of single family homes is up compared to the prior period and compared to a year ago (20 vs 17 in the prior period and 16 a year ago).  There were 25 price reductions of condos compared to the prior period of 28 and 16 a year ago.

With this light inventory we have compiled a list of single family homes and condos where the asking price has been reduced within the last 14 days.

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WRONG: "Bay Area home sales fell sharply in June — prices mostly fell, too"

It's been widely reported that the number of home sales in the Bay area "fell sharply" in June and "prices mostly fell too". That's from a headline in the Chronicle.  Just this week there was a similar story in the Mercury News.

The Mercury News story  omits San Francisco data and only covers Santa Clara, Alameda, Contra Costa and San Mateo counties.  The Chronicle story covers all nine Bay area counties.

My comments here relate to the Chronicle story.  First, the Chronicle's own graphic shows median prices are up month over month (June compared to May) in seven of the nine counties.  On a year over year comparison five of the nine counties show an increase in medial sales prices and two counties show no change.  How does this support the idea that "prices mostly fell too"?  It obviously doesn't.

It's true that if you average the median sales price of all nine counties there is a slight decline on a month over month basis but that attributable entirely to one county (San Mateo).  And the idea of averaging selling prices over such a wide geographic area is not very useful if you're trying to get a sense of the market.

Or look at it this way:  in June 6124 homes were sold in counties where the median sales price was up from the previous month.  Only 1233 were sold in the two counties that showed a decline in median sales price.  Again, how does that support the idea that "prices mostly fell"?

Specifically for San Francisco, it's true that the number of sales in June declined compared to May -- but that's been true seven out of the last thirteen years.  If you look at the month-by-month sales profile in San Francisco, June is the beginning of the summer doldrums that lasts until Labor day.  This is a repeating pattern that has been true through boom and bust economies.

The following graphic shows total sales for the first and second half of each year.  The first half of 2019 is well within the normal range of sales.

Hysterical headlines notwithstanding, for the five categories of condos and single family homes that we track on a monthly basis the average sales price for four out of five of those categories are at all all time highs.

New Listing Market Watch - mid July doldrums?

No.  While it may be true that the number of new listings tends to slow down between Independence Day and Labor Day there is still plenty of activity.  In the last two weeks 241 new residential listings came on the market compared to 257 in the same period in 2018.  That's down 6%.  You can see the breakdown between single family homes and condos here:

20 of those new listings went into contract.

The number of price reductions is increasing:  17 single family homes and 28 condos.  For the same period last year the figures were 15 and 23.

These statistics represent opportunities for buyers but perhaps not quite as fierce as peak times (spring and early fall).

And if all of this leaves you uneasy, contemplate the garden for a while.

Our Little Corner of the World IS Different

Intuitively, true San Franciscans know this is true.  We're different; we're unique ...

I found an example in one of the social media items they put out from time-to-time that they encourage agents to use.

When I first saw this I said to myself "this doesn't seem to fit our market in San Francisco."  Myself replied: "prove it."

OK, here it is.  Looking at single family home sales in district 2 (the Sunset) since 1/11/2019 there were a total of 174 closed transactions:

The average selling price for the 30 owner occupied properties was $1.476 million (19 DOM).  
The average selling price for the 8 tenant occupied properties was $1.294 million.(38 DOM).
The average selling price for the 136 vacant properties was $1.695 million (20 DOM).

So for this sample, "vacant" is the clear winner with highest average sales price and virtual tie for the shortest days on market.

Comparison of US and International Housing Trends

This is Bill Jansen's Facebook post quoting from an Economist article that says "investing in housing is safe with no housing bubble in site".

https://www.facebook.com/photo.php?fbid=2501786566554898&set=a.312200685513508&type=3&sfns=mo

New Listing Market Watch - Summer Starts

Summer may have begun officially on June 21st but in San Francisco real estate the summer season usually starts just before the 4th of July holiday. The number of new listings declines significantly and the number of price reductions increases temporarily.  This year follows that trend.

During the last two weeks (the last half of June) the number of new listings dropped to 236 compared to 323 in the prior period (the first half of June).  The bulk of the reduction was in condos (128 vs 196 in the previous period).  New listings of single family homes fell to 108 vs 127 in the prior period.

The number of price reductions was almost the same as the prior two weeks (20 vs 16 reductions in single family homes and 32 vs 43 in condos).  This year the significant increase in price reductions happened in the first half of June.

Te number of new listings that went into contract stayed just about the same as the previous period:  20 single family homes vs 21 two weeks earlier and 32 condos vs 34 in the prior period.

The full report is posted on our web site:
www.boldsf.com/Statistics