New Listing Watch - the year winds down

Seasons Greetings!  This will be the last "New Listing Watch" for 2016 and gives us an opportunity to look back over the year's changes, always looking for clues to what lies ahead.

As anticipated and similar to a year ago, new listings for the past two weeks have dropped off dramatically (80 vs 130 during the previous two week period).  For the same period last year there were 70 new listings.

The number of new listings that went into contract in the last two weeks is also up significantly with 18% of single family home new listings and 32% of condo new listings going into contract compared with 9% and 16% two weeks ago as buyers (and their agents) try to get sales nailed down before the holidays kick in.  We saw similar numbers a year ago.

Continuing the trend we've seen most of the year, the number of price reductions in the last two weeks is considerably higher than a year ago:  11 single family homes and 20 condos saw price reductions in the last two weeks compared to only 3 and 5 respectively during the same period last  year.

The graph above shows quite well that price reductions this year far exceeded those of last year.  For single family homes there have been 485 price reductions this year compared to just 314 in 2015 -- a 54% increase.  For condos the numbers are 928 this year vs 437 last year -- a 112% increase.  

The number of new listings this year is just about the same as 2015 -- 7,063 so far in 2016 vs 6,717 in 2015.

In our other reports where we report on the number of sales of various configurations of single family homes and condos in San Francisco, the result of this price reduction pressure can be seen especially in condos where two of the three condo configurations we track are showing lower average sales prices than the average 2015 sales price.  For example, the average sales price of a 2-bedroom/1-bath condo in 2015 was $1,024,000.  So far in 2016 the average price has been $994,000.  That's not a huge drop but it is significant since it's the first drop in average sales price after four years of consistent increases.

New Listing Market Watch - the same as last year but different

There are certain patterns in the San Francisco real estate market that are as predictable as rain in winter.

Here's what we wrote a year ago for the same two week period.  It perfectly describes the most recent two week period:

Our New Listing Watch survey done today and looking back at the last two weeks shows the number of new listing and the number of new listings going into contract during that period to be almost exactly the same as a year ago.  This demonstrates the seemingly inexorable seasonal variations.we see every year at this time:  the number of listings will continue to go down until after New Year's when they will quickly increase and reach their spring peak in June.

The number of new single family home listings during the two weeks ending December 5 is exactly the same as it was a year ago -- 56.  New condo listings were 74 compared to 75 a year ago.

There are two items of interest relating to condos.  First, the percentage of new listings that went into contract during the most recent two week period was significantly higher than for the same period last year:  16% vs. 3%.  

Second, although the number of price reductions during the most recent two week period is almost identical to a year ago, it's well below the average during the last six months: 19 compared to an average of 47 every two weeks since April.

Finally, based on the number of residential sales through the end of November, the total number of sales (as recorded in the SFMLS) will fall below last year.  This will be the third year in a row where annual sales are less than the previous year.  The last time we saw this trend was during the height of the recession (2007 through 2009).