Archive for the ‘Macro-Level Info’ Category
April 9, 2009
The first quarter has been interesting. We’ve broken the market into price segments and tallied up the action going on in each bracket. Then we compared this year’s first quarter activity to the first quarter of 2008. The numbers are telling, and they probably explain why medians have come down so far this year. Here are the bullet points from our research:
- Activity in the lowest price bracket, under $499,999, actually increased by nearly 15% year over year.
- The next bracket, $500,000 thru $999,999 saw a drop in activity of nearly 29% year over year.
- $1M thru $1,999,999 saw a more significant drop in activity, with a 55.78% decline in the number of transactions compared to Q1 2008.
- And the highest portion of the market, $2M and above, is hurting the most, with a 71.08% drop in activity!
- Total Sales Volume for all price brackets is down nearly 35% year over year thus far.
- With more action taking place on the low end of the market and less on the high end, it’s no wonder why median prices are down so much this year.
After putting the market under the microscope, we've determined that the low end is smokin'!
When we published our Q1 2009 Report, we mentioned that we had noticed these trends in the marketplace, and now we have the numbers to prove the point. This is very useful information if you’re in the market right now. As we mentioned in our report, the time is ripening for buyers to get into the higher ends of the market. Jumbo money has slightly loosened up recently and rates have eased. If you’re selling on the low end, it could be a good time for you as well.
Want the full spreadsheet? Click HERE.
*Please note that the total number of sales is for San Francisco only, and property types include single family homes, condominiums, stock cooperatives, lofts, TICs, and 2-4 unit buildings.
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Posted in Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis, Tips | Tagged market trends, numbers of sales, q1 2009, sales volume, san francisco, san francisco real estate, Tips, year over year change | Leave a Comment »
April 7, 2009
In the April 2009 edition of Realtor Magazine, there was a particularly interesting article about real estate market cycles. It addressed issues such as inventory levels, appreciation, and stages of a market cycle. Some of the bullet points include:
- Appreciation was out of whack from 2000-2006, a time in which values went up on average 89%.
- The market is in balance when there is 5-6 months of inventory available.
- The stages of a market cycle resemble Elisabeth Kubler-Ross’s states of death and dying. Optimism, Excitement, Euphoria, Denial, Fear, Panic, Despondency, Depression, Hope and back to Optimism.
We scanned the most interesting box, which details these bullets.
Market Cycle Info (click to enlarge)
We’re big believers in keeping close tabs on inventory levels in individual neighborhoods. We have put together a spreadsheet that contains all of San Francisco’s neighborhoods, how many properties have sold during Q1 2009, how many are for sale, and how many months of inventory there are in each. From these figures we are able to determine which neighborhoods are:
- Strong sellers’ markets
- Sellers’ markets
- In balance
- Buyers’ markets
- Strong buyers’ markets.
You may be surprised at the results from Q1 ’09. Because the spreadsheet is too large to post here on the blog, you may contact us if you’d like a copy for yourself. We continuously update this spreadsheet throughout the year so we can track the individual neighborhoods.
And why do we do all this? We’re big believers in the notion that there are a myriad of opportunities no matter the market’s condition. The key is understanding where they are. And it’s info like this that paints a picture of where the opportunities lie.
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Posted in Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis, News, Tips | Tagged appreciation, depreciation, inventory levels, inventory spreadsheet, market absorption, market cycles, san francisco, san francisco real estate | 3 Comments »
April 5, 2009
Where have we been the past couple of days? On a Bahamas beach swinging in a hammock under a couple of palm trees, umbrella drink in hand? Not quite. We’ve been knee-deep in spreadsheets, crunching numbers for the first quarter so we can bring you our Q1 2009 Report.
The findings are very interesting and is worth a read if you follow the market closely. Don’t worry, it’s just a 1-pager. Our Q1 2009 Report is available in a PDF file, downloadable here:
Click this sentence to download the Q1 2009 San Francisco Real Estate Report
Someday.... someday....
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Posted in Macro-Level Info, Nerdy RE Analysis, Quarterly Reports | Tagged 1st quarter, analysis, first quarter, q1 2009 report, real estate prices, san francisco, san francisco real estate, trends | 3 Comments »
April 2, 2009
We’ve tallied up all sales taking place since the first of the year in San Francisco and ranked them by neighborhood. Totals include sales of single family homes, condos, TICs, lofts, stock cooperatives, 2-4 unit buildings, 5+ unit buildings, lots, and acreage. Here are the rankings:
Has the pace of sales quickened recently?
| Rank |
Neighborhood |
Number of Sales |
| 1. |
Noe Valley |
44 |
| 2. |
Potrero Hill |
23 |
| T-3 |
Excelsior |
20 |
| T-3 |
Bayview |
20 |
| T-5 |
South Beach |
17 |
| T-5 |
Inner Mission |
17 |
| T-5 |
Portola |
17 |
| T-5 |
Crocker Amazon |
17 |
| 9. |
Bernal Heights |
16 |
| T-10 |
Visitacion Valley |
15 |
| T-10 |
Pacific Heights |
15 |
To see the remainder of the list and commentary, continue reading –>
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Posted in Countdowns & Rankings, Macro-Level Info, Nerdy RE Analysis | Tagged neighborhood rankings, real estate statistics, sales pace, sales volume, san francisco, san francisco real estate | 2 Comments »
March 23, 2009
This morning we queried the MLS for a snapshot of our local marketplace in order to understand absorption. Property types in the query include single family homes, condos, TICs, lofts, co-ops, 2-4 unit buildings, 5+ unit buildings, and lots/acreage. It does not include new developments who leave their data out of the MLS. Here is the rundown:
- 518 properties have sold in San Francisco since January 1, 2009.
- There are currently 2,038 properties for sale in the MLS.
- 625 properties are currently in contract.
- That leaves 3.26 months of inventory* out there. Anything less than 6 months of inventory is considered a stable market.
*When we refer to “months of inventory”, it means that if new listings stopped hitting the market immediately, it would take X amount of time for the current inventory to completely sell off. This is also known as an “absorption rate” and it tells us how quickly demand is eating up supply. It is calculated by dividing the number of properties currently for sale by how many properties are currently in contract.
How quickly is demand eating supply?
Now that we have the big view, lets break things down further into property types. For example, what absorption rates are we looking at with single family homes, condos, or TICs? Here are the results:
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Posted in Macro-Level Info, Nerdy RE Analysis | Tagged absorption rates, demand, months of inventory, san francisco, san francisco real estate, supply | 3 Comments »
March 10, 2009
There is a lot of talk going around lately about activity on the low end of the market beginning to strengthen. Most people attribute this to the bargain hunters and investors snatching up foreclosed properties, REOs, and short sales. Curious to see what’s happening here in San Francisco, we set out to crunch some numbers and get some answers.
Which market segments are asleep?
Our goal was to see which price ranges have experienced the highest declines in activity since peak. We tallied up the numbers of sales in each segment per year. We found the low end of the market experiencing major declines in activity while the high end being less affected. Here are the results:
- $0 to $499,999 – This segment has experienced a drop in sales activity of 75.69% since peak.
- $500,000 to $999,999 – Has experienced a drop in sales activity of 46.18% since peak.
- $1M to $1,499,999 – Has experienced a drop in sales activity of 37.88% since peak.
- $1.5M to $1,999,999 – Has experienced a drop in sales activity of 36.90% since peak.
- $2M to $2,499,999 – Has experienced a drop in sales activity of 16.27% since peak.
- $2.5M to $2,999,999 – Has experienced a drop in sales activity of 14% since peak.
- $3M and above – Has experienced a drop in sales activity of 14.97% since peak.
Because we looked at the data on an annual level, 2008 was our last complete year for the analysis. Next time, we’ll zero in on the last 5 months to get a more updated view of the market and see if the aforementioned claims are true. Speaking of claims, we’re also hearing that the high end of the market is now going through trials and tribulations that the low end has already experienced. Either way, the data above tells a good (or not so good) story of what has happened in San Francisco through the end of 2008.
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Posted in Macro-Level Info, Nerdy RE Analysis | Tagged market segments, number of sales, sales activity, sales volume, san francisco, san francisco real estate | Leave a Comment »
March 8, 2009
In case you’ve been living under a rock, our country’s financial system has undergone radical change during the past five months. The pace at which change is occurring is akin to a forest fire. We’re hoping for a fast burn that clears the way for new growth. At this time, however, the fire’s still going. Maybe not quite as strong as it was at climax, but definitely still going.
What's going on in the economy isn't exactly a "controlled burn"...
Because of the rapid changes going on, we crave the freshest information. In the interest of seeing what’s going on right now, we created an analysis that you may find veeerrrry interesting. Here’s what we did:
- List out all the sales that have occurred in San Francisco’s 10 MLS districts from October 1, 2008 to March 1, 2009 (that’s five months worth of sales).
- Find the median sales price in each district over this period. Record it.
- Follow steps 1 & 2 for each district over the same time period going back to the year 2003.
- Find when prices peaked for each district.
- Calculate how far prices have fallen from peak.
- Rank the 10 districts based on performance over this period.
*Please note: You’ll need to familiarize yourself with THIS map in order to understand the MLS districts. All sales come from the MLS. These do not include private transactions or sales taking place at new developments. All numbers were adjusted for inflation to control for the changing value of the dollar. This helps us gain better insight into true market behavior. Property types included in the analysis include single family homes, condos, TIC’s, lofts, and stock cooperatives.
Now that you know the method, how about those results?
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Posted in Countdowns & Rankings, Macro-Level Info, Nerdy RE Analysis, Tips | Tagged analysis, depreciation, districts, median sales price, rankings, san francisco, san francisco real estate, Tips, trends, value decline, values | 2 Comments »
March 6, 2009
Real estate transaction volume in San Francisco is off to a lackluster start here in 2009. No surprise really, as it’s tough for people to get loans and many buyers are on the sidelines, riding exercise bikes and sipping Gatorade until coach calls ‘em into the game.
So where is the action this year? As I write this, there have been a total of 395 transactions recorded to MLS in San Francisco this year. That includes single family homes, condos, stock cooperatives, TICs, 2-4 unit buildings, 5+ unit buildings, and lots. It does not include sales taking place at new developments, private sales, or slacker agents who sold something two weeks ago but still haven’t put the sale in MLS.
We were curious to see who’s getting action so we ranked the 85 neighborhoods in the City (as determined by MLS) by the number of transactions thus far in ’09. The findings were more interesting than we thought they would be. Here is the rundown:
| Rank |
Neighborhood |
Number of Transactions |
| 1. |
Noe Valley |
30 |
| 2. |
Potrero Hill |
17 |
| 3. |
Excelsior |
13 |
| 4. |
Visitacion Valley |
12 |
| T-5. |
Russian Hill |
11 |
| T-5. |
South Beach |
11 |
| T-5. |
Inner Mission |
11 |
| T-5. |
Portola |
11 |
| T-5. |
Crocker Amazon |
11 |
| T-5. |
Bayview |
11 |
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Posted in Countdowns & Rankings, Macro-Level Info, Neighborhood Info, Nerdy RE Analysis | Tagged 2009, neighborhood rankings, number of home sales, sales, san francisco, san francisco real estate, transactions | 1 Comment »
February 24, 2009
We were perusing through some stats the other day (imagine that!) and happened upon a list of the top 5 states with the newest housing inventory. Here is the list, courtesy of Arun Barman, Research Economist at Realtor.org.
- Nevada – 7.7%
- Arizona – 6.7%
- Florida – 5.4%
- Idaho – 5.4%
- Texas – 5.0%
We’ve long held the hypothesis that run-away development can ruin a real estate market, but we’d yet to really see a macro-level list that corroborated that thought. What of course jumped off the page to us is the top 3. Nevada, Arizona, and Florida all have had major real estate busts.
Where is California, you might ask. California experienced growth in new inventory over the past real estate boom. However the growth in new inventory did not cast a shadow over existing inventory (as it did in the other states) which is why California did not make the list. With development costs in California so high, investors and/or developers are more apt to rehab and flip property than they are to build new. The places where property values have taken the biggest hits in California (and the Bay Area) are the newer suburban and exurban developments. In general, the more established communities have been hit, but not as hard.
Getting back to the hypothesis, it really all comes down to value. The four tenants of values are demand, utility, scarcity, and transferability (remember it as “DUST”). An item (any item) must have all four of these characteristics to have value. When developers go crazy, building anything and everything in a booming real estate market, they put downward pressure on the existing homes in the area. This is because all the new inventory greatly affects the scarcity portion of the value equation.
It is for this reason (we believe) that San Francisco’s market has not imploded the way other markets around the nation have. The lion’s share of San Francisco inventory is old, scarce, and one-of-a-kind. Furthermore, our local government makes it very difficult for developers to build massive structures that send un-welcomed, downward property value pressure throughout our neighborhoods.
Age of San Francisco's Housing Stock - Courtesy of Propertyshark.com (click to enlarge)
This is a big reason why we’re especially cautious when taking clients around the newer parts of the City. We’ve seen what an onslaught of new inventory can do to real estate markets and we’re wary of what it will do here (albeit localized to just a few select pockets within SF).
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Posted in Appraisal 101, Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis, New Developments, Tips | Tagged arizona, developer, florida, housing development, housing stock, markets, nevada, san francisco, san francisco real estate, value, year built | 5 Comments »
February 17, 2009
This morning we took a pulse reading of the local market to see the distribution of the 1,484 homes for sale in San Francisco. Homes included in our analysis include condos, TICs, lofts, stock co-ops, and single family residences. Keep in mind, homes not advertised on the MLS (such as pocket listings, FSBOs, and new developments) are not reflected in this data.
Current Inventory Distribution by asking price (click to enlarge)
- Listings asking over $1 million account for exactly one quarter of all homes for sale in San Francisco.
- Listings asking $500,000 to $999,999 account for over half (53.77%) of all homes for sale in San Francisco.
- Listings asking $500,000 to $749,999 account for 31.60% of all actives. This is the largest category when breaking the market down in $250,000 increments.
- The next largest is the $750,000 to $999,999 category, posting 22.17% of all actives.
- Listings in the ultra-luxury market (above $4 million) account for 1.82% of all homes for sale in San Francisco.
- There are more homes for sale over $1 million [378] than there are under $500,000 [308].
- Want a home for less than $250K? Good luck. Less than 1% of all homes for sale in San Francisco fit the bill. It’s twice as easy to find something over $4 million!
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Posted in Macro-Level Info, Market Check Up, Nerdy RE Analysis | Tagged 2009, active listings, analysis, distribution, homes for sale, market trends, Public Listings, san francisco, san francisco real estate | Leave a Comment »
February 13, 2009
Ever been curious about how much of our local condo market is comprised of studios? 1 bedroom units? 2 bedroom units? Well this post is for you.
How many bedrooms do YOU need?
We took a good look at the San Francisco condo market and calculated what percentage of condo sales were taking place at each bedroom level, and plotted them on a chart to see if any trends were identifiable. For example, are 2 bedroom units becoming more popular? Less? Unchanged? Let’s find out.
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Posted in Macro-Level Info, Nerdy RE Analysis | Tagged condo market, condominiums, condos, distribution, market share, number of bedrooms, san francisco, san francisco real estate, trends | 2 Comments »
February 12, 2009
In case you hadn’t figured it out yet, we spend a lot of time building and looking at spreadsheets over here at InsideSFRealEstate. We’re constantly looking at ways of improving our analysis in our search for truth. A criticism we have of our own analysis is always looking at things on an annual scale. Generally, this is okay. But 2008 was a weird year. Very weird… particularly the last quarter.
How bad was the dive at the end of 2008?
For this reason, we decided to break Q4 off from the rest of the year and compare it to Q4′s of years past. We felt that this might give us more insight into just how dramatic the end of ’08 really was. And oh boy, did we discover a dive! Read the rest of this entry ?
Posted in Macro-Level Info, Nerdy RE Analysis | Tagged decline, depreciation, dive, fourth quarter, median sales price, median values, q4, san francisco, san francisco real estate, Tips, trends | Leave a Comment »
February 10, 2009
A fairly common question we come across in everyday business is “How do 1-bedroom condos perform when compared to 2-bedroom condos?“
It’s an interesting question, and we set out to identify some trends. We looked at all condo sales in San Francisco dating back to 1995, and separated them out by number of bedrooms into four groups: Studios, 1-bedroom, 2-bedrooms, and 3-bedrooms. What we found was somewhat revealing about the condo market in general. *Please keep in mind, we have adjusted the median values for inflation to get a more accurate view of the market.
Can the number of bedrooms keep your property value afloat?
- Studio medians peaked in 2005 and are down 12.84% since.
- 1-bedroom medians peaked in 2005 and are down 9.04% since.
- 2-bedroom medians peaked in 2005 and are down Read the rest of this entry ?
Posted in Macro-Level Info, Nerdy RE Analysis | Tagged 1-bedroom, 2-bedrooms, 3-bedrooms, condominiums, condos, days on market, dom, median sales price, medians, san francisco, san francisco real estate, stats, studio, trends | Leave a Comment »
February 10, 2009
A fellow real estate statistics nerd (actually, this guy’s a developer, Realtor, AND attorney), wrote an interesting article recently on his blog, Misha’s Musings. He put an old hypothesis to the test with San Francisco’s market data. The hypothesis? When marketing times go up, sales prices go down.
Interested to see if the inverse correlation was proven? Click HERE to check out the article.
World's tiniest inverse correlation...
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Posted in Macro-Level Info, Nerdy RE Analysis | Tagged days on market, dom, inverse correlation, misha's musings, sales price, san francisco, san francisco real estate, statistics, stats | Leave a Comment »
February 4, 2009
One can often tell how hot or cold a real estate market is by how long it takes a typical home to sell. When homes are selling within a few weeks of hitting the market, things are pretty hot. Conversely, when homes sit on the shelf for a while, the market is cold. The duration of time a home is on the market is known as “marketing time”, “days on market”, or “DOM” for short.
In any given U.S. market, marketing times averaging less than 30 days signal a red hot market where properties are selling like hot cakes. Average marketing times between 31 and 59 days signal a strong market. When marketing times are between 60 and 180 days, the market is believed to be in balance.
Remember when homes were selling like hotcakes?
Once average marketing times surpass 180 days, however, things are looking grim and signal a weakening of the market in question.
How do we know these cutoffs are reliable indicators of market conditions? Well, we didn’t just make these numbers up– they’re actually what the banks have set forth as their guidelines. Matter of fact, average marketing times are printed right there in the appraisal report, which the lender scrutinizes carefully (especially these days).
Appraisal report snipit (click to enlarge)
Now that we’ve discussed marketing times and what a hot market, a market in balance, and a cold market look like, how would you like to see some trends in San Francisco? Well that’s just what we’ve done. We plotted average and median marketing times for all property types in the City and looked at the trends over a 14-year history. Here’s the chart:
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Posted in Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis, Tips | Tagged analysis, days on market, dom, history, marketing times, san francisco, san francisco real estate, Tips, trends | 1 Comment »
