The Pulse of the Market?

We spend a lot of time looking at statistics in this business as do our clients when they're in the market either as buyers or sellers. We look for trends and hints as to where the market is heading.

The problem is most reports are way out of date in a fast moving market such as San Francisco has seen over the past few months. Statistics (including ours) that discuss sales prices, numbers of sales, median prices, days on market etc. all show the results of decisions made weeks earlier. Even in our fast paced market, most closings take 30 days or more after the decision to make an offer was made. ("Days on Market" only takes into account the number of days between listing date and pending status.)

Most sales reports are done on a monthly basis including ours which is just posted over on our web site boldsf.com.

We wait until the second week of the month to pull together our numbers since many brokerages and agents aren't always as prompt as they should be in updating information in the MLS.  So, by the time monthly reports are posted, they represent decisions made as much as 30-60 days earlier.

We get more timely anecdotal reports from our colleagues informally and at our regular sales meetings.  And occasionally other brokerages report some of their findings (see Redfin's post on bidding wars in various markets including San Francisco).

We've found what we think may be a more current and reliable indicator of the "heat" for our specific market.  Our MLS publishes a hot sheet of new listings that covers the 14 days prior to the report.  It also shows how many of those listings are already in contract.  Take a look and let us know if you find this useful.  As you can see we've only started collecting data so it's a bit early to be drawing major conclusions.

But this apparent trend of a slight cooling off in both single family homes and especially condos is consistent with our own recent market experience.

Volume of Sales and Seasonal Variations

Well, we haven't published these graphs recently and given the current market conditions this might help put some of it in perspective:

This shows the total number of single family homes and condos/TICs sold during the first seven months of the year.  It's easy to see we're back to and surpassed the volumes of 2006 and 2007, prior to the housing and economic meltdown.

This second graph, while very busy, also explains some of the seasonality of the San Francisco market.

(Click on the graph to see a larger version.)  As in many real estate markets, San Francisco generally experiences two sales peaks each year. The most pronounced is the so-called spring market where sales peak in May or June.  A second, less pronounced peak usually happens in October.

One important fact to keep in mind with these graphs and numbers -- "Sales" are recorded as of the day escrow closes.  The decision to buy was generally made 30 days prior to close of escrow.  So the peak in June represents sales where the decision to buy (go into contract) was made in May.  The opposite is also true -- the dip in sales in September represents a lack of buying activity in August.

(These statistics are taken from the San Francisco Multiple Listing Service).

Distressed Properties mostly in the rear view mirror

PropertyRadar (formerly Foreclosure Radar) reports that San Francisco has the smallest percentage of distressed properties (foreclosures and short sales) of any county in California.

Compared to the same time last year the percentage of distressed properties has dropped by ten points from 34.8%.

Four of the five counties with the lowest percentage of distressed properties are in the Bay area:  San Francisco, San Mateo, Marin and Alameda.

Safety

A potential client recently asked the following:  "Is the area around 1080 Potrero Ave. safe?"

Here's the essence of my response:

This is a tough question to answer not just about this particular address but in general. Your definition of safe is not likely to be the same as mine.  Your background and circumstances will define what you consider "safe" as much as crime statistics.

And, compared to what? What's your frame of reference?  Do you currently live in San Francisco or the Bay area.  Are you moving here from elsewhere?  Urban, suburban, rural?

There are several tools available on the web that try to characterize and/or quantify the level of crime in a particular area.

Trulia has one under "Community Info" that's a good start:
http://www.trulia.com/real_estate/San_Francisco-California/crime/ 
(Plug in the zip code for the address in question.)

There's also another great tool: http://www.crimemapping.com 
(Plug in an address or just click away. You can see what's been reported to the local police department around an address.   Then look at a different address for the same time period.)

Here's some other ideas to consider:

• Spend some time in the neighborhood.  Visit at different days of the week and hours of the day, evening and night.
• Talk to the local police station staff.
• Contact the San Francisco SAFE organization that works with the police department to organize neighborhood watch groups.  Ask if there is a group where you're considering moving and, if so, have them put you in touch with them. 

And keep this in mind:  real estate agents are generally reluctant to give an opinion about the safety of a neighborhood because it's all too easy to run afoul of the Fair Housing Act which requires us to avoid "steering" buyers away from or toward a neighborhood based on race, color, or other protected categories.  This is a situation where you really need to do your own research and reach your own conclusions.

New Highest Price for Residential Property on Potrero Hill

You may recall in an earlier post I mentioned a property on the market that had negotiated an easement with their neighbor that would protect their view (something of a rarity in San Francisco).

Well, that property just closed escrow for the highest price ($3,660,000) for a residential property since records have been kept by our multiple listing service.  The property is located at 827 De Haro Street.  (Click the link for more photos and listing information).

The sales price is approximately 15% over asking.

Technically, the property is a two-unit building.  Here's the agent's public description from the MLS.  (I get a kick out of the lack of vowels.  It reminds me of when we paid for advertising by the number of characters in the ad.  Or, a more current reference, a text message version of the description.  The truth is more mundane -- our MLS still limits the description field to 750 characters -- this is just two shy of the limit).

1-of-a-kind custom Potrero Hill VIEW hm blt in 2005. 4 bdrms/3.5 baths incl 1 bdrm legal unit. Elev to every lvl, incredble VWS from every lvl & unsurpassed finishes thruout. Top lvl includes huge LR w/expansive City & Bay views, fireplac, 2 patios, open flr plan w/ dining area, all great for indoor-outdoor entertaining. Kitchen has all the bells & whistles w/ a center island. Mster ste feat a prvt patio w/ views & hot tub, huge walk-in. 3 bdrms on middle flr w/one perf suited for home office w/flr to ceiling blt-ins. Garden legl unit is an open flr plan w/2-tiered living/dining area, firepl & direct access to yd, also w/spectac views. The spectacular views north are protected by a recorded view easement restricting ht of neighbor's hm.

Although not included in the MLS, tax records say the building has over 5,000 sq. ft. of living space.  So, on a price per sq. ft. basis, this would be considered "a bargain" compared to most single family homes in this price range selling for upwards of $900/sq. ft.