Posts Tagged ‘depreciation’
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 »
March 12, 2009
We’ve put together a chart that pits four of San Francisco’s most prestigious neighborhoods against one another… Russian Hill, Nob Hill, Pacific Heights, and the Marina. Median condominium values were plotted over a 14 year history, dating back to 1995 (this is as far as MLS will go). We adjusted the median prices to account for inflation so we could isolate market appreciation.
And around the final corner, it's Nob Hill in front... Nob Hill in front!
How did they fare?
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Posted in Getting Granular, Marina, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis, Nob Hill, Pacific Heights, Russian Hill | Tagged appreciation, condominiums, condos, depreciation, Marina, nob hill, Pacific Heights, russian hill, 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 2, 2009
Sunnyside, aka District 4S, is located just south of Mount Davidson. San Francisco City College and the Sunnyside Conservatory are located here. The neighborhood is chock full of cute single family homes and has quite an interesting history.
We decided to take a look at the median sales price trend in the neighborhood as far back as MLS would allow (1995). We adjusted the medians for inflation using formulas from the Bureau of Labor Statistics, so we could control for the changing value of the dollar.
Is Sunnyside up or down?
To find out, continue reading –> Read the rest of this entry ?
Posted in Appreciation and Hold Times, Getting Granular, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis, Sunnyside | Tagged appreciation, depreciation, district 4s, rates, sales, san francisco, san francisco real estate, single family homes, Sunnyside, Tips, trends | Leave a Comment »
February 23, 2009
It’s time to narrow in on a San Francisco neighborhood again! This time we’ve chosen Potrero Hill and are putting the condo market under the magnifying glass. We looked at median sales prices for condos over a 14-year history and have compiled the findings here for your convenience.
The City as seen from Potrero Hill
To see all the stats and trends, continue reading –> Read the rest of this entry ?
Posted in Appreciation and Hold Times, Getting Granular, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis, Potrero Hill | Tagged appreciation, condominiums, condos, depreciation, potrero hill, sales, san francisco, san francisco real estate, trends | 1 Comment »
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 2, 2009
We’re having fun with our new formulas that give us the ability to adjust sales prices based on the Consumer Price Index. Just what is inflation adjusting?
Let’s say your parents bought a place in 1990 for $100,000 and today it is worth $500,000. One might assume that the value has increased $400,000. However, the value of the dollar has changed over the past 18 years, so we need to correct for those changes in order to determine how much true appreciation their home has accrued. What we find when we adjust for inflation is that $100,000 in 1990 is equivalent to $162,529 today. This changes the appreciation rate a bit. The home has actually appreciated $337,471 in real terms, not $400,000. Adjusting for inflation gives us a more accurate depiction of what the market is doing.
Balloons aren't the only things that inflate...
We wanted to revisit an old post that was one of our most popular on the blog to date. We discussed how much home prices have come down in San Francisco, and have since taken the data, inflation adjusted it, and have some new numbers (although very similar conclusions to last time).
Keep reading, this is good stuff!
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Posted in Home Buying, Home Selling, Macro-Level Info, Market Check Up, Nerdy RE Analysis, Tips | Tagged analysis, appreciation, depreciation, districts, median, median sales price, rankings, san francisco, san francisco real estate, Tips, trends, values | 2 Comments »
December 11, 2008
Duboce Triangle is a tiny but beautiful part of San Francisco. Classic Victorians line the lush streets. The flat, walkable neighborhood sits under a canopy and is home to the cute Duboce Park.
If you like trees, then Duboce Triangle may just be for you
We often get a kick out of newcomers who pronounce the neighborhood “Du-bot-chee”. To clear up any confusion for visitors and newcomers, it’s pronounced “Dew-bose”.
So what kinds of home price trends are we finding in the area? There are few sales within the neighborhood’s boundaries (due to its small geographic area), but we ran numbers anyway to see if we could at least identify an overall trend.
To view the trends, continue reading –>
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Posted in Duboce Triangle, Getting Granular, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis | Tagged 2008, appreciation, depreciation, duboce park, Duboce Triangle, median sales price, san francisco, san francisco real estate, Tips, trends | Leave a Comment »
December 9, 2008
Bernal Heights and Glen Park exhibit some very similar characteristics. We wanted to share with you how each neighborhood has performed over time, and thought the best way to do it would be a good old fashioned showdown.
Bernal and Glen Park, it's time to reveal those cards
The first chart we’re looking at shows median prices for single family homes, trending over the last 14 years. Here’s a peek:
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Posted in Appreciation and Hold Times, Bernal Heights, Getting Granular, Glen Park, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis | Tagged analysis, appreciation, Bernal Heights, depreciation, Glen Park, houses, median sales price, san francisco, san francisco real estate, single family homes, Tips, trends | Leave a Comment »
December 7, 2008
District 7 is one of the most sought-after areas of the City. Beautiful architecture, amazing views, shop-lined streets, and pricey homes all abound here. The neighborhoods in District 7 include the Marina, Cow Hollow, Pacific Heights, and Presidio Heights.
District 7 is home to Cow Hollow. Clearly, this Cow has been shopping there...
We were curious to see how condominiums have appreciated or depreciated over time in the district. We studied the median sales prices for condos in the district, dating back to 1995. We plotted the points on a chart to gain insight into the overall trend, and then figured out how much appreciation you would have gained/lost if you owned for X amount of time. Keep in mind that these are all based on the median sale price each year. With that said, here is a look at the data:
District 7 Neighborhoods - Median Sales Prices for Condos Over Time (click to enlarge)
Keep reading for the appreciation and hold time chart –> Read the rest of this entry ?
Posted in Appreciation and Hold Times, Cow Hollow, Marina, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis, Pacific Heights, Presidio Heights | Tagged appreciation, condominums, condos, Cow Hollow, cows, depreciation, Marina, market conditions, median sales prices, Pacific Heights, Presidio Heights, prices, san francisco real estate, trends | Leave a Comment »
December 4, 2008
We’ve been hearing a lot of talk lately about how the high-end of the real estate market is performing better than the overall market. But what about here in San Francisco? Some reports tout that the luxury market has remained relatively unscathed, while others say that there is a lag and it will soon be hit. We wanted to sample some neighborhoods around San Francisco so we could get a feel, not just for the high end of the market, but also for the middle and low ends.
Here’s what we did. The most expensive single family home to sell in 2008 (per the MLS) is in Pacific Heights. The least expensive single family home to sell in 2008 is in Bayview. The neighborhood with the highest number of median-priced sales (median is currently $835,004) was Central Sunset. These 3 neighborhoods are our three samples from around the city of the high, the middle, and the low end.
The results from our analysis?
How you fared if you owned your property for... (click to enlarge)
For our commentary, continue reading –> Read the rest of this entry ?
Posted in Appreciation and Hold Times, Bayview, Central Sunset, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis, Pacific Heights | Tagged advice, analysis, appreciation rates, Bayview, Central Sunset, depreciation, hold times, Pacific Heights, san francisco, san francisco real estate, Tips, trends | Leave a Comment »
December 3, 2008
We performed a detailed analysis of Noe Valley single family homes for our “In Search of Truth” series. If you are unfamiliar with our methodology, please read this. We looked at all sales within the past six months (6/2/08 thru 12/2/08) and here is the run down:
- A total of 56 single famly homes sold during this period, per the MLS.
- Looking through all the photographs, descriptions, and property histories of each of the 56 sales, only 4 qualified for the analysis. These are our “perfect pairs”.
- Stroller Valley back in the Spotlight
Based on these four representatives, how have Noe Valley single family homes fared recently?
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Posted in In Search of Truth, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis, Noe Valley | Tagged appreciation, case shiller, depreciation, market conditions, Noe Valley, san francisco, san francisco real estate, strollers, trends | Leave a Comment »
December 2, 2008
Welcome to our first installment of “In Search of Truth”. If you are unfamiliar with how we arrive at the numbers we’re about to talk about, be sure to read about our methodology here.
Russian Hill Condos
In this edition, we set out on a mission to find out if condos in Russian Hill have been appreciating or depreciating. We went through all sales of Russian Hill condos over the past 6 months with a fine-toothed comb and here’s what we found:
- There were a total of 23 condo sales in Russian Hill in the past 6 months (6/1/08 to 12/1/08).
- Only 4 of the sales appeared to be in the exact same condition when they sold in 2008 versus when they were last sold (according to the MLS photos). We’ll call these “perfect pairs”.
- All other sales were left out of the analysis because they lacked photos, did not have a past sale to compare to, or had been completely remodeled between sales.
Based on these four perfect matches, did Russian Hill condos appreciate or depreciate? Here’s what we learned:
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Posted in In Search of Truth, Micro-Level Info, Neighborhood Info, Nerdy RE Analysis, Russian Hill | Tagged appreciation, case shiller, condominiums, condos, depreciation, russian hill, san francisco, san francisco real estate, Tips, trends, truth | Leave a Comment »
December 1, 2008
We learned a lot about the Case-Shiller Index last week. Admittedly, we have not placed much faith in this particular index for the following reasons. First, it analyzes metropolitan area statistics. If you haven’t figured it out by now, we’re much more into neighborhood-level data, as we have found that neighborhoods truly are their own micro-markets, each behaving in their own way. Another reason we did not give Case-Shiller much credit is because they leave out condos, TIC’s, stock cooperatives, and lofts. The index is based upon single family home sales only. This is a big drawback.
- Your detective has arrived.
Despite these shortcomings, we read through the 40 page document describing the Case-Shiller methodology. There is certainly value in what they are attempting to do.
In short, they look at the sales price of a recently sold home and compare it to the previous sale of that same home. This allows them to see whether the home appreciated or depreciated, and at what rate. Comparing the home to itself controls for factors that can dirty data when comparing homes against other homes. When a particular home has a previous sale to which it can be compared, this called a “matched pair“. Case-Shiller takes thousands of matched pairs to come up with their overall metropolitan area (MSA) trend. The other brilliant thing about Case-Shiller is that they discard sales of homes that took place off-market, that were flipped (two sales too close together), and that had gains from major renovation projects or significant added square footage. Do they go through each listing manually to verify this? This answer is no. There is an algorithm that decides which matched pairs to keep and which ones to discard.
Case-Shiller does offer zip-code level based data. We called the provider (Fiserv) to purchase it so we could report on it and give it to you. However, only institutions can purchase the data and furthermore, they cannot reproduce or share the data with anyone else (per the user license).
SO – what we’ve done is come up with our own methodology, drawing from the positive aspects of the Case-Shiller Index and applying it to our micro-markets here in San Francisco. We’ll be reporting on each neighborhood as we go through them one by one. Is this painstaking? You bet. But we are in search of truth. And that’s what the series will be called… “In Search of Truth”.
Here’s a look at our methodology: Read the rest of this entry ?
Posted in In Search of Truth | Tagged analysis, appreciation, cake, case shiller, depreciation, matched pairs, micro markets, neighborhoods, sales, san francisco, san francisco real estate, trends | Leave a Comment »
November 7, 2008
When you’re out looking at properties, be on the lookout for curable versus incurable characteristics. What are these?
Jaw-dropping views from the back yard!
Both refer to types of depreciation homes can go through. However, there is a big difference. Curable refers to conditions that are financially feasible to fix. This means that if you were to spend $1 on curing this type of depreciation, you would get back $1 or more of your investment. Some examples include repainting, putting in a new kitchen, or updating an old bathroom.
By contrast, incurable depreciation is where one would invest that same $1 and get back less than the full $1 in return. Examples range from Read the rest of this entry ?
Posted in Appraisal 101, Home Buying, Tips | Tagged 747, advice, Appraisal 101, curable, depreciation, home values, incurable, obsolescence, san francisco, san francisco real estate, Tips | 1 Comment »
