San Francisco Real Estate Agent
San Francisco Real Estate Agent
8/16/10 – 8/15/11
The charts below track San Francisco MLS home sales by price, average size and average dollar per square foot ($/sq.ft.) for the 12-month period ending August 15, 2011. Only homes listed as having at least one parking space are included.
Within the charts, neighborhoods are listed by median sales price. “Avg Sq.Ft.” signifies the average size in square feet for all those units that reported square footage. If a price is followed by a “k” it references thousands of dollars; if followed by an “m”, it signifies millions of dollars.
See the notes below the charts for important context to the analysis.
5+ Bedroom Houses
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4 Bedroom Houses
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3 Bedroom Houses
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2 Bedroom Houses
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3 Bedroom Condominiums
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2 Bedroom Condominiums
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1 Bedroom Condominiums
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2 Bedroom TICs
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TIC listings commonly do not publish square footage figures, so no $/sq.ft. analysis is possible.
The MEDIAN SALES PRICE is that price at which half the properties sold for more and half for less. It may be affected by “unusual” events or by changes in buying trends, as well as by changes in value.
Low Price & High Price are self-explanatory, but the low price might be for a property that needs significant work just to be habitable. Within a single neighborhood, it is possible for the low and high prices to be millions of dollars apart – the difference between a small, distressed, bank-owned 2-bedroom condo and a large, pristine 2-bedroom penthouse with spectacular views.
DOLLAR PER SQUARE FOOT is based upon the home’s interior living space and does not include garages, storage, unfinished attics and basements; rooms and apartments built without permit; decks, patios or yards. These figures are typically derived from appraisals or tax records, but can be unreliable, measured in different ways, or unreported altogether: thus consider square footage and $/sq.ft. figures to be very general approximations. All things being equal, a house will have a higher dollar per square foot than a condo (because of land value), a condo will have a higher $/sq.ft. than a TIC (quality of title), and a TIC’s will be higher than a multi-unit building’s (quality of use). All things being equal, a smaller home will have a higher $/sq.ft. than a larger one.
The AVERAGE SIZE of homes of the same bedroom count may vary widely by neighborhood: for example, the average size of a 4-bedroom house in Pacific Heights is much larger than one in Noe Valley; and the average of a Marina 2-bedroom condo is significantly larger than one in South Beach. Besides the affluence factor, the era and style of construction often play large roles in these disparities.
Some neighborhoods are well known for having additional ROOMS BUILT WITHOUT PERMIT, such as the classic 1940′s Sunset house with “bedrooms” and baths built out behind the garage. These additions often add value, but being unpermitted are not reflected in $/sq.ft. figures.
Many aspects of value cannot be adequately reflected in general statistics: curb appeal, age, condition, views, amenities, outdoor space, “bonus” rooms, parking, quality of location within the neighborhood, and so forth. Thus, how these statistics apply to any particular home is unknown.
In real estate, the devil’s always in the details.
Statistics such as these are generalities, subject to fluctuations due to a variety of reasons (besides changes in value). Average figures in particular may be distorted by one or two sales substantially higher or lower than the norm, especially where the sample size is small. New-development condo sales not reported to MLS – of which there are quite a few in San Francisco – are not included in this analysis.
All information herein is derived from sources deemed reliable, but may contain errors and omissions, and is not warranted.
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Months’ Supply of Inventory (MSI) = the number of months it would take to sell the existing inventory of homes for sale at current rates of market activity: The lower the MSI, the stronger the market. Less than 4 months of inventory is usually considered a “Seller’s market”; 4-6 months, a balanced market; and over 6 months, a “Buyer’s market.” MSI in SF, at below 3 months, is very low – much lower than state and national rates. For just SF houses, MSI drops to 2.3 months; for houses in the hot Noe/ Castro/ Haight district, it’s an astonishingly low 1.6 months. This situation of strong buyer demand + low inventory typically exerts upward pressure on prices.
Below are weekly market activity charts for the last 6 months, pertaining to San Francisco houses, condos, co-ops, TICs and 2-4 unit buildings. The numbers and percentages of the charts pertaining to accepted offers will go down over the coming weeks as some of these transactions fall out of escrow.
All data per Broker Metrics.
Units for Sale
Inventory is at its lowest in 6 months and much lower than in previous years.
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New Listings
As is common in August, the number of new listings coming on market is low. Typically, we’ll see a large surge after Labor Day.
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Listings Accepting Offers
Unusually for August, typically a relatively slow month, the number of listings accepting offers is high.
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Percentage of Listings Accepting Offers
Low inventory + relatively few new listings + high demand = a high percentage of listings going under contract (accepting offers).
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Sunset/ Parkside/ Richmond SFDs: Average Days on Market
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Sunset/ Parkside/ Richmond SFD Months’ Supply of Inventory
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S&P Case-Shiller Overall Home-Price Index for San Francisco Metro Area Increases for 2nd Consecutive Month in May
Case-Shiller High Tier Price Index Shows 3rd Consecutive Increase
The Paragon Real Estate Group July 27, 2011 Update
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The Case-Shiller Index Deciphered
For the San Francisco (City & County) Real Estate Market
The S&P Case-Shiller Index report for May 2011 (released 7/26/11) indicated a second consecutive increase in home prices for the San Francisco Metropolitan Statistical Area (MSA). This is based upon the overall, aggregate Case-Shiller analysis of home sales data for the 5 counties of San Francisco, Marin, Contra Costa, Alameda and San Mateo. It is this aggregate Case-Shiller Index that the media typically quotes in their news reports.
However, the aggregate Index is the wrong Case-Shiller Index to use when assessing market trends in the city and county of San Francisco itself (as opposed to the 5-county San Francisco MSA). Here are some important points to remember about the Index:
The main C-S Home Price Indices track price trends for houses only — condos, co-ops, TICs and multi-unit buildings are NOT included. San Francisco contains only 12% of the house inventory in the MSA, so the aggregate Index is heavily skewed toward the other counties’ markets. Market conditions can vary widely between counties and indeed between neighborhoods within counties.
There is typically a 4-8 week time lag between offer-acceptance and closed sales: thus one month’s Index mostly reflects market activity in the two previous months. Since the Index itself is published 2 months after the month in question, the May Index is a snapshot of the market that is already 3 to 4 months old as of today in late July.
Furthermore, Case-Shiller tracks not only overall aggregate house prices, but price trends broken into 3 price tiers: low, middle and high — dividing the total number of sales into thirds. And the conditions and trends in these different price segments have been very different over the past few years.
The “High Tier” price range is defined as those houses selling for over $580,000 – $600,000 (the exact number changes monthly). In the city of San Francisco, over the past 12 months, roughly 69% of all our house sales were in the High Tier price segment. If we exclude the two least affluent, southern Realtor districts running from Bayview to Oceanview (hit hardest by foreclosures and distress sales), and look only at the 8 central and northern Realtor districts, then about 89% of our house sales were in the High Tier. (There are 10 SF districts in all. And for the record, the majority of our condo sales is also in the High Tier segment.)
The May C-S Index report indicates that home values for the High Tier segment of the SF MSA have now increased for the third consecutive month. This parallels the strengthening of the real estate market we have experienced in San Francisco since early 2011.
Nationally, as well as in the state, Bay Area and the city of San Francisco, the lower the price segment, the harder it has been hit by distress sales (bank-owned property and short sales). The greater the percentage of distress sales in a given neighborhood, the larger the decline in value over the past 3 to 5 years. Thus, though all have seen significant declines, the least affluent areas have been hit hardest with value declines and the more affluent neighborhoods have been least affected.
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It’s clear that the Case-Shiller High-Tier Price Index for the San Francisco MSA is the Index most applicable to the home market of the city and county of San Francisco itself. Indeed, San Francisco, whose 8 central and northern districts currently have a median house sales price of approximately $850,000, should probably have its own “Upper High-Tier” Price Index, which would probably vary even further from the aggregate Index results.
Looking at the chart at the top of this article of the Case-Shiller Index High Tier price points in January of each year since the year 2000, we see the large, fast appreciation to peak values in 2006 – 2008 (different neighborhoods of the Bay Area and the city peaked at different times within that time period); then, after the September 2008 financial markets crash, there was an 18% – 22% decline to January 2009. That seems generally correct as an overall average for the price adjustment that occurred in San Francisco’s 8 central and northern districts.
As seen in the second chart, the scale of the difference in impact on the respective price segments and on their associated areas of the Bay Area is enormous. Thus, the aggregate Index typically quoted in news articles and real estate blogs vastly overstates the decline in values for most of San Francisco, and often misrepresents current trends as well. (The 2 southern SF districts, dominated by sales in the upper-low and mid price tiers and hard hit by distress sales, saw declines typically running from 30% to 45%.)
Post market meltdown, January 2009 to present, the Index for High Tier priced homes now shows a further decline of less than half a percent.
Furthermore, based upon what we’re seeing in the city market, both statistically and in the hurly burly of deal-making — i.e. a new influx of high-tech buyers and a significant tightening in the supply and demand dynamic within SF — we believe there is a good chance the Index will indicate further upticks in High Tier home prices in coming months as well. Remember than the May Index mostly reflects March and April market activity, and San Francisco has seen a very busy late spring, early summer home market.
If that continues in a sustained manner, it might be yet another indication that San Francisco home prices did indeed hit bottom in 2009-2010 and are now starting to recover.
For a more complete overview of market statistical trends in San Francisco, there are links to additional analyses below. Further information on the data points and methodology of the S&P Case-Shiller Home Price Index is publicly available on their website.
Statistics are generalities, subject to fluctuation due to a variety of reasons. All information herein is derived from sources deemed reliable, but may contain errors and omissions, and is not warranted. The Case-Shiller data referenced above is from their non-seasonally adjusted Indices. The price ranges of the tiers adjust to a small degree each month depending on sales: lately the high tier has started at $575,000 to $600,000.
The July 2011 Market Overview by the Paragon Real Estate Group
Generally speaking, monthly fluctuations up and down — especially of median price — are relatively meaningless unless continuing for an extended period of time. In real estate, the longer term trends, seen across a wide variety of statistical measurements, are the meaningful ones. This analysis, except where noted, does not include sales unreported to MLS, such as many of the new-development condo sales.
Median Condo Sales Prices
For the past 2+ years, the median price of non-distress condos in the greater South of Market area of San Francisco has generally been oscillating between $625,000 and $700,000, while the median price for distress condos (bank-owned and short sales) has continued to decline. Median prices of condos of varied location, size, views and quality will naturally fluctuate up and down without being particularly meaningful as pertaining to changes in value — until the trend is consistent over the long term, minimally 3 to 4 quarters.
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Percent of Listings Accepting Offers
A good snapshot of supply and demand, though since this is only for sales reported to MLS, it does not include many new-development condo sales. The last 2 quarters have seen this percentage at its highest points in 3 years, reflecting strong buyer demand vs. a limited supply of condos for sale. The only period that comes close to this percentage of listings under contract (accepting offers) over the last 3 years was the run-up to the expiration of the double homebuyer tax credit last spring. The market typically slows down during the summer months — we shall see what happens this year.
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Average Dollar per Square Foot
Average dollar per square foot has been increasing for the last 2 quarters and is now at its highest level since 2008. It will be interesting to see if this trend continues in the second half of 2011.
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The New-Development Condo Market
The vast majority of new-condo construction over the past 15 years has been in this greater area. The 2008 financial crisis caused new condo construction to crash in SF, which has led to large declines in new-condo listings and sales. This has significant ramifications for the supply and demand dynamic and is a large factor in the heating up of the MLS resale market. Because of the time required for large new developments to be built, it will be years before this turns around.
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Months’ Supply of Inventory (MSI)
MSI has been bumping along in the range of 2 to 3.5 months of inventory since February, which is the lowest it has been here in years. The lower the MSI, the stronger the demand as compared to the supply of homes for sale. Please see the definition of MSI following the charts.
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Average Days on Market (DOM) Before Acceptance of Offer
Average DOM here is distorted by the fairly high percentage of distress-condo sales in these neighborhoods: distress transactions often fall through which significantly increases the overall average. Non-distress condos here generally have an average DOM of 60 to 80 days, and distress condos, 90 to 120 days. However, the most appealing listings often accept offers within the first 2 or 3 weeks of going on market.
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Total Condo Sales vs. Distress Condo Sales in the Greater SOMA Area
MLS condo sales in this area are at their highest number in the last 3 years — this market is cooking right now, especially with the influx of new high-tech buyers and the declining supply of new-development condos. The cross-hatched portion of each column shows the quantity of distress home sales within total sales — which is also increasing. However, distress condo sales are clustered generally in the lower price ranges (see median price chart above) and often in specific troubled buildings.
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Condo Sales $1,000,000 & Above
MLS sales of higher priced condos in these neighborhoods are at their highest level since 2008. Distress sales in the upper price ranges are very rare, as can be seen by the cross-hatched sections delineating such sales. In the city as a whole, the high-end home market has really been heating up. Again, this appears to be supercharged by new high-tech money.
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MEDIAN SALES PRICE is that price at which half the sales occur for more and half for less. It can be, and often is, affected by other factors besides changes in market values, such as short-term or seasonal changes in inventory or buying trends. Though often quoted in the media as such, the median sales price is NOT like the price for a share of stock, i.e. a definitive reflection of value and changes in value, and monthly fluctuations are generally meaningless. If market values are truly changing, the median price will consistently rise or sink over a longer term than just 2 or 3 months, and also be supported by other supply and demand statistical trends.
DAYS ON MARKET (DOM) are the number of days between a listing going on market and accepting an offer. The lower the average days on market figure, typically the stronger the buyer demand and the hotter the market.
MONTHS SUPPLY OF INVENTORY (MSI) reflects the number of months it would take to sell the existing inventory of homes for sale at current market conditions. The lower the MSI, the stronger the demand as compared to the supply and the hotter the market. Typically, below 3-4 months of inventory is considered a “Seller’s market”, 4-6 months a relatively balanced market, and 7 months and above, a “Buyer’s market.”
DOLLAR PER SQUARE FOOT ($/sqft) is based upon the home’s interior living space and does not include garages, unfinished attics and basements, rooms built without permit, lot size, or patios and decks — though all these can still add value to a home. These figures are usually derived from appraisals or tax records, but are sometimes unreliable or unreported altogether. All things being equal, a house will sell for a higher dollar per square foot than a condo (due to land value), a condo higher than a TIC (quality of title), and a TIC higher than a multi-unit building (quality of use). Everything being equal, a smaller home will sell for a higher $/sqft than a larger one. (However, things are rarely equal in real estate.) There are often surprisingly wide variations of value within neighborhoods and averages may be distorted by one or two sales substantially higher or lower than the norm, especially when the total number of sales is small. Location, condition, amenities, parking, views, lot size & outdoor space all affect $/sqft home values. Typically, the highest dollar per square foot figures in San Francisco are achieved by penthouse condos with utterly spectacular views in prestige buildings.
Median and average statistics are generalities subject to fluctuation due to a variety of reasons (besides changes in value): how they apply to any specific property is unknown. Averages may be distorted by one or two sales substantially higher or lower than the norm, especially when sample size is small. Sales not reported to MLS – such as many new-development condo sales — are not included in this analysis (except in the specific chart on the SF new-development condo market). All figures should be considered approximate and are derived from sources deemed reliable, but may contain errors and omissions, and not warranted. We are happy to provide or direct you to the original data upon which each chart is based.
A statistical market overview by the Paragon Real Estate Group for Noe Valley, Eureka Valley & the Castro, Cole Valley, Mission Dolores, Haight Ashbury, Ashbury Heights, Clarendon Heights, Parnassus Heights, Corona Heights, Glen Park, Twin Peaks & the Duboce Triangle
July 2011
Below are a variety of charts detailing overview market statistics and trends in the neighborhoods of San Francisco’s central Realtor District 5. District 5 is one of the more homogeneous districts in San Francisco in terms of property values, but still any analysis of an area with so many properties of different type, location, condition and quality can only be a very general overview.
District 5 soared in value between 1996 and 2008 and was one of the last districts to peak in value before the financial markets meltdown in September 2008. Values then fell about 20% very quickly and then stabilized in 2009 and 2010. With the surge in high-tech buyers in 2011, many of whom wish to be close to highways to the peninsula, activity in this district has picked up significantly. It’s a very hot market right now for appealing, well-priced homes, and we are seeing a good number selling very quickly in multiple offer situations. If it continues, this supply and demand dynamic would typically begin to exert upward pressure on prices.
Generally speaking, monthly fluctuations up and down — especially of median price — are relatively meaningless unless continuing for an extended period of time. In real estate, the longer term trends, seen across a wide variety of statistical measurements, are the meaningful ones.
Median House & Condo Sales Prices in District 5
For the past 2 plus years, the median price of houses in District 5 has generally been oscillating between $1,200,000 & $1,350,000 and for condos between $750,000 and $825,000. Median prices of homes of varied location, size and quality will naturally fluctuate without being particularly meaningful as pertaining to changes in value — until the trend up or down is consistent over the long term (minimally 3 to 4 quarters).
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Percent of Listings Accepting Offers
A very precise snapshot of supply and demand. This percentage is at its highest point in 3 years, reflecting very strong buyer demand vs. a very limited supply of homes for sale.
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Average Dollar per Square Foot for Houses & Condos
Both houses and condos in District 5 have generally been oscillating up and down within a $50 band of average dollar per square foot value for the past 2 plus years.
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Inventory of Homes for Sale
The number of homes for sale in District 5 in June 2011 was 40% below that of June 2010 reflecting the very low supply of inventory, which is certainly constraining sales numbers.
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Months’ Supply of Inventory (MSI)
At 1.9 months, June 2011 was at a very, very low level of MSI, one that would typically be indicative of a strong “Seller’s Market” in District 5.
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Average Days on Market (DOM) Before Acceptance of Offer
Average DOM is close to the lowest number in the past 13 months, reflecting strong buyer demand for appealing new listings coming on market.
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District 5 Total Home Sales vs. Distress Home Sales
Home sales in District 5 in the second quarter were a tad above those in the second quarter of 2010, however in 2011 there was no double-homebuyer-tax-credit boosting sales as we had last year, and, more importantly, inventory was way below that in 2010. To increase sales with far fewer homes available to purchase = a market heating up. The cross-hatched portion of each column shows the quantity of distress home sales within total sales — in District 5, distress home sales do not make up a significant percentage of sales and have had very little impact on values. Most distress sales in SF are clustered in specific neighborhoods in the lower price segments.
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District 5 House, Condo & TIC sales by Price Range
This is a snapshot of sales by price segment over the past year. In the second quarter of 2011, the overall median sales price in District 5 for houses, condos and TICs was something over $900,000.
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MEDIAN SALES PRICE is that price at which half the sales occur for more and half for less. It can be, and often is, affected by other factors besides changes in market values, such as short-term or seasonal changes in inventory or buying trends. Though often quoted in the media as such, the median sales price is NOT like the price for a share of stock, i.e. a definitive reflection of value and changes in value, and monthly fluctuations are generally meaningless. If market values are truly changing, the median price will consistently rise or sink over a longer term than just 2 or 3 months, and also be supported by other supply and demand statistical trends.
DAYS ON MARKET (DOM) are the number of days between a listing going on market and accepting an offer. The lower the average days on market figure, typically the stronger the buyer demand and the hotter the market.
MONTHS SUPPLY OF INVENTORY (MSI) reflects the number of months it would take to sell the existing inventory of homes for sale at current market conditions. The lower the MSI, the stronger the demand as compared to the supply and the hotter the market. Typically, below 3-4 months of inventory is considered a “Seller’s market”, 4-6 months a relatively balanced market, and 7 months and above, a “Buyer’s market.”
DOLLAR PER SQUARE FOOT ($/sqft) is based upon the home’s interior living space and does not include garages, unfinished attics and basements, rooms built without permit, lot size, or patios and decks — though all these can still add value to a home. These figures are usually derived from appraisals or tax records, but are sometimes unreliable or unreported altogether. All things being equal, a house will sell for a higher dollar per square foot than a condo (due to land value), a condo higher than a TIC (quality of title), and a TIC higher than a multi-unit building (quality of use). Everything being equal, a smaller home will sell for a higher $/sqft than a larger one. (However, things are rarely equal in real estate.) There are often surprisingly wide variations of value within neighborhoods and averages may be distorted by one or two sales substantially higher or lower than the norm, especially when the total number of sales is small. Location, condition, amenities, parking, views, lot size & outdoor space all affect $/sqft home values. Typically, the highest dollar per square foot figures in San Francisco are achieved by penthouse condos with utterly spectacular views in prestige buildings.
SAN FRANCISCO REALTOR DISTRICTS
District 1: Sea Cliff, Lake Street, Richmond (Inner, Central, Outer), Jordan Park/Laurel Heights, Lone Mountain
District 2: Sunset & Parkside (Inner, Central, Outer), Golden Gate Heights
District 3: Lake Shore, Lakeside, Merced Manor, Merced Heights, Ingleside, Ingleside Heights, Oceanview
District 4: St. Francis Wood, Forest Hill, West Portal, Forest Knolls, Diamond Heights, Midtown Terrace, Miraloma Park, Sunnyside, Balboa Terrace, Ingleside Terrace, Mt. Davidson Manor, Sherwood Forest, Monterey Heights, Westwood Highlands
District 5: Noe Valley, Eureka Valley (Castro, Liberty Hill), Cole Valley, Glen Park, Corona Heights, Clarendon Heights, Ashbury Heights, Buena Vista Park, Haight Ashbury, Duboce Triangle, Twin Peaks, Mission Dolores, Parnassus Heights
District 6: Hayes Valley, North of Panhandle (NOPA), Alamo Square, Western Addition, Anza Vista, Lower Pacific Heights
District 7: Pacific Heights, Presidio Heights, Cow Hollow, Marina
District 8: Russian Hill, Nob Hill, Telegraph Hill, North Beach, Financial District, North Waterfront, Downtown, Van Ness/ Civic Center, Tenderloin
District 9: SOMA, South Beach, Mission Bay, Potrero Hill, Dogpatch, Bernal Heights, Inner Mission, Yerba Buena
District 10: Bayview, Bayview Heights, Excelsior, Portola, Visitacion Valley, Silver Terrace, Mission Terrace, Crocker Amazon, Outer Mission
Some Realtor districts contain neighborhoods that are relatively homogeneous in general home values, such as districts 5 and 7, and others contain neighborhoods of wildly different values, such as district 8 which includes both Russian Hill and the Tenderloin.
Median and average statistics are generalities subject to fluctuation due to a variety of reasons (besides changes in value): how they apply to any specific property is unknown. Averages may be distorted by one or two sales substantially higher or lower than the norm, especially when sample size is small. Sales not reported to MLS – such as many new-development condo sales — are not included in this analysis (except in the specific chart on the SF new-development condo market). All figures should be considered approximate and are derived from sources deemed reliable, but may contain errors and omissions, and not warranted. We are happy to provide or direct you to the original data upon which each chart is based.
The Paragon Real Estate Group
July 2011 Quarterly Update
As seen below, by virtually every statistical measure of supply and demand, the luxury home segment in San Francisco dramatically strengthened in the 2nd quarter. And this is what we are clearly experiencing on the ground in the day to day transactional market here in the city. One always wants to see trends continue for minimally 2 or 3 quarters before jumping to headline conclusions about market declines or rebounds, but right now the signs are quite positive.
SF Luxury Home Sales by Quarter
In this chart, luxury homes are defined as those selling for $1,500,000 and above. The second quarter saw a surge in sales – as is not uncommon in the 2nd quarter/ spring sales season. Luxury house sales were comparable to those of last fall and last spring, but luxury condo, co-op and TIC sales exploded to by far their highest level in 3 years. Closed sales follow accepted-offer activity typically by 4-8 weeks, so 2nd quarter sales figures mostly reflect accepted-offer activity in mid-February to mid-May. Sales $1.5m and above make up about 10% of the overall home market in the city.
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SF Luxury Home Listings Accepting Offers
As measured by the number of luxury homes accepting offers, the 2nd quarter was the strongest in 3 years: about 15% higher than last year’s figures. This augurs well for closed sales in the 3rd quarter.
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Luxury Home Sales by Neighborhood
In these columns, luxury HOUSE sales are in red; luxury CONDO, CO-OP and TIC sales are in blue. The northern prestige neighborhoods from Sea Cliff to Pacific Heights to Telegraph Hill still make up the lion’s share of this market, but the Noe Valley-Eureka Valley-Cole Valley district and the SOMA-South Beach-Potrero Hill district have also rebounded very strongly – many of the high-end, high-tech buyers coming into the market want to live closer to highways going down the peninsula. St. Francis Wood also continues to be a bastion of large-size, traditional, higher end house sales.
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Percentage of Listings Accepting Offers
This may be the purest measure of buyer demand vs. the supply of homes available for sale, and in the 2nd quarter, the percentage of listings going under contract (accepting offers) was the highest, by far, in the past 3 years. High demand against lower supply will typically exert upward pressure on prices.
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Inventory of Luxury Homes for Sale
The number of high-end homes available to purchase is much lower – over 30% lower — than at comparable periods of 2009 and 2010, which makes the high number of sales that much more significant. The quantity of sales in this market segment is definitely being held back by simple lack of inventory. The situation of more buyers chasing fewer homes often leads to multiple offers on appealing new listings.
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Average Dollar per Square Foot
Median sales prices and average dollar per square foot are less useful measurements when assessing a data set of sales running all the way from $1,500,000 to $12,000,000+ in dozens of different neighborhoods around the city, but for what it’s worth average dollar per square foot has been climbing. If it continues to do so over the next two quarters as well, it would be reasonable to see it as an indicator of rising values.
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Months’ Supply of Inventory (MSI)
The MSI for luxury homes in San Francisco has been very low since February when the city market started to pick up, hovering in the 2.7 to 3.3 months of inventory. The lower the MSI, the hotter the market. Typically, this level of MSI would be considered a strong “Seller’s Market.”
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Average Days on Market (DOM)
The lower the days on market, the stronger the buyer demand. Average DOM for SF luxury homes is now as low as it has been since 2008.
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Expired/Withdrawn vs. Sold Listings
The stronger the market, the fewer the homes that will expire or be withdrawn from the market without selling. That ratio is now at its lowest level in 3 years. Still, even in this period of increased demand, for every 10 luxury homes that sold in the 2nd quarter, about 4 expired or were withdrawn without selling, typically due to being perceived as overpriced.
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Sales With & Without Price Reductions
If a home is well priced, well prepared and comprehensively marketed, it typically sells relatively quickly at very close to (or even over) the asking price. Those homes that are not perceived as good values usually go through 1 or more price reductions and sit on the market for much longer – almost 3 months longer on average – before selling at a significant discount to original list price. And, of course, a good percentage of listings don’t sell at all, but are withdrawn from the market.
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SF Home Sales $2,000,000 & Above
The higher the price range, the more the “luxury home” tag means. The second quarter saw the highest number of home sales of $2m and above since 2008, and the competition for the best houses in this segment can be ferocious. New high-tech money appears to be driving a lot of this demand, and absent another financial markets meltdown, we appear to be at the beginning of this particular upward curve of demand in the Bay Area. It will be interesting to see how business holds up during the summer months, typically a slower period in the market.
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In real estate, longer term trends across a variety of statistical measurements are the meaningful ones — which are what we try to provide in our analyses. The fluctuations of monthly statistics in particular — often quoted with little or no context in the media – are, unfortunately, virtually worthless in assessing what’s really going on in the real estate market in San Francisco.
Statistics are generalities, subject to fluctuation due to a variety of reasons. All information herein is derived from sources deemed reliable, but may contain errors and omissions, and is not warranted. Sales not reported to MLS are not included in this analysis. We can supply the raw data behind any of our charts, if you are so interested.
Interest rates are getting close once again to all time lows. Today’s chart from Bankrate.com charting rates over the past 6 months:
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Today’s chart from Bankrate.com, charting rates over the past 3 years:
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These are market dynamics charts for San Francisco houses, condos, co-ops, TICs and 2-4 unit buildings. They track weekly activity for the past 6 months through the week ending June 19, 2011. For activity reported to MLS, per Broker Metrics.
Listings Accepting Offers
After slowing down in the first 2 weeks of June, market activity as measured by home listings accepting offers zipped back up to May levels. And May was a busy month.
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Percentage of Listings Accepting Offers
This metric also increased dramatically in the last week, again comparable to May.
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New Listings Coming on Market
Typically, the number of new listings decreases as spring goes into summer. This began to happen last week, but it’s too early to know if this is just a normal weekly fluctuation or the beginning of a seasonal slowdown in new inventory.
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Homes for Sale
Inventory of homes for sale dropped a small bit, but basically remained stable.
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