Inside San Francisco Real Estate

Here are some interesting facts and figures we ran today that corroborate the story of two markets, which we wrote about a few days ago.  What exactly did we look at?

We isolated all sales that have taken place from January 1 through June 1 and compared 2008′s performance to 2009′s.  The sales were divided up by price bracket.  Our goal was to see which price brackets have seen the biggest drops (or rises) in activity since this time last year.

Sales volume by price bracket - click to enlarge

• The number of transactions in the sub $500K range is actually UP from last year… by 21.82%.
• The number of transactions in the $500,000 to $749,000 range is down 13.55% from last year.
• The $750,000 to $999,999 bracket is down 45.02% from last year.
• The $1M to $1,249,000 bracket is down 55.38% from last year.
• The $1.25M to $1,499,000 bracket is down 60.14% from last year.
• The $1.5M to $1,999,999 bracket is down 60% from last year.
• The $2M to $2,999,000 bracket is down the most: 64.89% from last year.
• The $3M to $4.9M bracket is down 41.18% from last year.
• And the $5M+ bracket is down the second most, with a 64.29% decease in transactions from this time last year.

Final Thoughts

For all price brackets, the number of transactions is down 32% year over year.  Since that seems to be the norm, it could be deduced that anything less is a sign of relative strength while anything more is a sign of relative weakness.

Sales on the low end continue to show signs of strength in 2009.  Essentially, homes priced less than $750K have shown that they are capable of selling in this rough and tumble market, while anything above $750K has around half the activity it used to have.  Homes above $1 million have been hit the hardest, at least as far as the volume of transactions are concerned.  The jumbo loan limit could be the big culprit in this trend, as discussed in this article.  And as we all know, when transaction volume slows to a halt, prices come down.

This leads us to believe that the $1M+ market likely has some correction left, while the $750K and below market is showing signs of stabilization.  And what about the $750,000 to $1M market?  Who the hell knows.  Flip a coin.  Hehe… seriously though, there is probably a gradient starting at the $750K price point where the state of the correction changes from “stabilizing” to “little ways left to go”.

As with all our market analyses, it will be interesting to see how things shape up for the remainder of the year.  Will the luxury market come to reality soon, or will it be dragged kicking and screaming to its fate, denying what must be done?  Will activity on the low end save the housing market from a complete collapse?  So far it seems to be the only saving grace for the year.

For similar articles, click HERE.

2009 has been a rough and tumble year...