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.

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.

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:

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.

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