Where are we compared to last year?

 A new report we just published that gives some indicators on the direction of the residential real estate market over the past three months and a comparison to October 2019.

Average selling price for single family homes in October was down 1% compared to September but up 1% compared to a year ago. 

For condos the average selling price in October was down 5% compared to September and down 12% compared to October last year.

There is a large inventory of condos on the market although we expect to see fewer new listings come on the market through the holidays until after the new year.  For buyers this time of year can present opportunities with less competition.

The full report is at our web site.

 

Parents help kids buy their first home?

The question of how parents can help their kids with their first home purchase comes up frequently.  According to JVM Lending there are seven approaches:

1) Gift of Funds.

2) Loans.

3) Co-Signing.

4) Second Home.

5) Kiddie Condo.

6) Investment Property.

7) Equity Share.

More details

Each of these approaches has potential pitfalls and consequences you need to be aware of before proceeding.  As always, consult your tax and real estate professionals.

So Where Are We?

Inventory

As it typical this time of year, the total number of new listings entering the market over the past two weeks has dropped -- 472 vs 606 in the prior two week period.  The drop is seen for both single family homes (190 vs 236) and condos (282 vs 370).

But as the graph shows, we had substantially more new listings in the last two weeks compared to the same period a year ago:  190 single family homes vs 114 a year ago and 282 condos vs 176 a year ago.

As of Monday (11/2/2020) there were 1,803 active listings including 441 single family homes and 1362 condos/TICs.  A year ago 924 active listings (303 single family homes and 621 condos).

Sales and Sales Prices

We're seeing a similar number of sales this year (October) compared to the same month last year.  In fact total sales in October was actually 8% higher than a year ago (555 vs 512). 

Median sales prices for single family homes have held steady over the past year.  Median sales price in October this year was $1,650,000., unchanged from October 2019.  

Median sales prices for condos have dropped 11.5% from $1,325,000 in October 2019 to $1,173,000 in October this year. 

Highlights from Monthly and 3rd Quarter Reports

We've just posted our regular collection of monthly reports along with third quarter reports for residential listings and sales in San Francisco, Marin and Sonoma counties.  Also included are our Biweekly New Listing Report for San Francisco and weekly Tri-County report. The full reports can be found at our website:  www.boldsf.com/Statistics

Here are some highlights:

San Francisco

• Every two weeks for the past four months San Francisco has added more than 500 new listings of single family homes, condos and TICs.  For the two weeks ending October 5 we added 652 new listings.  That compares to 403 during the same period last year.  The bulk of new listings are condos with 425 added in the last two weeks compared to 264 a year ago.

• Every two week period for the past sixteen weeks we've seen 100+ price reductions posted for condos.  During the two weeks ending October 5 there were 208 price reductions compared to just 73 a year ago.

• As of October 5 there were 1,401 condos listed for sale.  For September there were 308 condo sales that closed compared to 191 in September of 2019.

• The conclusion seems to be there are more than the normal number of buyers for condos but they are substantially outnumbered by more and more listings coming on the market.

Marin

• Inventory remains a problem in Marin county.  In September 240 single family homes closed escrow.  As of October 6 there were only 336 single family homes on the market -- barely a month's supply.

• For the third quarter this year smaller single family homes (3 bedrooms or less) are selling for premiums above those for the same quarter last year. Premiums for 4 bedroom homes are slightly below last year's level.

• The number of sales was up in the third quarter of the six configurations of single family homes we track compared to the same quarter a year ago.

Sonoma

• Inventory is also a problem in Sonoma where 517 single family homes closed escrow in September and, as of October 5, there were 643 on the market.

• For the six configurations of single family homes we track, all posted sales for the third quarter above those of the third quarter last year with the exception of 4 bedroom, 3 bath homes.

• Premiums were also up in all of the configurations except the two largest.

Tri County

• The number of sales of condos and single family homes in all three counties was up in September compared to a year ago with the exception of condos in Sonoma County.

Global Real Estate Bubble Index

The large, global investment bank UBS has put out it's annual Global Real Estate Bubble Index for 2020.  It lists 25 cities around the world and classifies them as Bubble Risk or Overvalued, Fair Valued, or Undervalued.  Of the 25 cities there are five in the US -- Los Angeles, San Francisco, New York, Boston and Chicago.

San Francisco is in the Overvalued group but trending down over the past three years:

Barrons describes the index this way when discussing the seven cities most at risk of a housing investment bubble:  "Faced with high price-to-rent ratios and uncertain rental price growth, investors searching for a buy-to-let home may want to look elsewhere."

Keep in mind this index is focused exclusively on residential real estate as investment.  So if you're not planning on renting your property the index probably isn't especially relevant -- but it is interesting.