Fresh back from a jaunt to Seattle for some much needed R&R, we’re here with our Quarterly Report. A lot of scenes unfolded in Q2. Below is the scoop:
Click HERE for a convenient 1-page PDF document you can print and take with you.
The first half of 2009 is officially history and we have some general observations about the real estate market. Three dramas are currently playing themselves out which can be discerned by dividing the market into three segments; the high end (luxury market), the middle, and the low end.
The luxury market held out longer than any other segment during the downturn, but has now made up for lost time and is experiencing drastic price reductions. It has not yet stabilized, and it could be some time before it hits bottom. The availability of reasonable jumbo loans has played significantly into the fate of the luxury market, making it tough for things to improve. In San Francisco, the luxury market includes homes priced at $2M+.
The low end of the market has shown the most activity in 2009, and it is safe to say that it seems to be stabilizing. It was the first to react to the downturn, and will be the first to stabilize. Homes in San Francisco priced below $750,000 generally fit into this segment.
The middle market is a mixed bag of tricks. There is a gradient of decreasing stabilization as you move from the $750,000 price point up to $2M.
Overall, sales activity in Q2 has picked up quite significantly from a dismal Q1, but is still down year over year. City-wide, prices are down year over year anywhere from 10% to 35%, depending on the neighborhood. Neighborhoods with high foreclosure rates (those south of I-280) have been hit harder than those in the northern parts of the City. Inventory levels also play a major factor in how specific neighborhoods are holding up. Those with a glut of inventory fell harder than those with tight inventory.
Stemming from these observations, we have some of advice that you may find helpful. Read the rest of this entry ?