Archive for February 2011 | Monthly archive page

What Costs How Much Where in San Francisco

Low, High & Median Sales Prices & Average Dollar per Square Foot
By Neighborhood, Property Type & Bedroom Count
2/16/10 – 2/15/11

The charts below track San Francisco MLS home sales by price, size and average dollar per square foot ($/sq.ft.) for the year ending February 15th. Only homes listed as having at least 1 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. “REO” refers to the sale of bank-owned properties (typically pursuant to foreclosure).

See the notes below the charts for important context to the analysis. Depending on your screen settings you may wish to adjust your viewing “zoom level” to below 100%.

* San Francisco TIC sales have been dramatically affected in the last few years by changes in financing conditions and condo conversion rules. Recently, more TIC listings expire without selling than actually sell. The TICs that do sell are generally perceived as particularly excellent values when compared to condos of similar size, location and quality. That is, a TIC usually has to stand out as a great value to attract attention from buyers, and the TICs sold are cherry-picked from the general inventory. Because the number of sales is low in the TIC chart, the resulting statistics are less reliable as indicators of general trends or comparative neighborhood values. TIC listings commonly do not publish square footage figures, so no $/sq.ft.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 38% larger than one in Noe Valley; and the average of a Marina 2-bedroom condo is 25% 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.

Weekly Market Activity Charts

San Francisco Home Market -Weekly Market Activity Charts Through 2/13/11

For San Francisco Houses, Condos & TICs Unless Noted Otherwise

Statistics are generalities, subject to fluctuation for a variety of reasons. Dramatic weekly changes in particular should be taken with a grain of salt until the trend is established over a longer period of time. All numbers should be considered approximations. The 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.

Home Listings Accepting Offers
A drop off from the previous week, but still above average activity in listings going under contract.

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Percentage of Listings Accepting Offers
The percentage of listings accepting offers, while dropping off from the previous week, is still quite high historically.

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Listings of $1,000,000 & Above Accepting Offers
The market for higher end homes continued to strengthen in the week ending 2/13/11.

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Percentage of Homes $1,000,000+ Accepting Offers
The percentage of higher end homes accepting offers is the highest it has been in well over 6 months.

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Homes Actively For Sale
The inventory of homes for sale ticked up but remains relatively low, which with the strengthening buyer demand is contributing to the high percentage of listings going under contract.

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New Listings Coming on Market
The number of new listings hitting the market increased a bit in the week ending February 13th.

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Listings Sold (Closed Escrow)
Reflecting the low offer-acceptance activity at the end of December and beginning of January (the slowest time of the year), the number of listing closing escrow was very low.

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2-4 Unit Buildings: Percentage Accepting Offers
In parallel with the market for houses, condos and TICs, the market for 2-4 unit buildings has also gotten stronger.

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Mortgage Rates
This chart from Bankrate.com shows interest rate fluctuations over the past 3 months.

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February 2011 Newsletter

SF House & Condo Listings Accepting Offers
Activity by Week: sales activity really picked up since mid-January, with the last week of the month showing the highest number of accepted offers of any week in the past 6 months. In number of listings accepting offers, the full month of January 2011 was up 28% from January of 2010 and up 76% from January 2009 (the market’s nadir). 2010 Overview Analysis

Paragon Real Estate Group
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Percentage of House & Condo Listings Accepting Offers
Charted by Week: With buyer demand increasing and relatively low inventory levels, the last week of January saw a spectacular rise in the percentage of listings accepting offers in San Francisco.

Paragon Real Estate Group
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SF Home Listings for Sale
The dark red columns show the number of listings for sale at any time during the month; the lighter columns show the number of active listings on the LAST day of the month. Except for December 2010 and December 2009, January 31st saw the lowest number of active listings on the market for the last 25 months. (This chart shows the last 13 months.) Inventory levels should climb dramatically as we move toward spring.

Paragon Real Estate Group
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SF New House & Condo Listings
Charted by Week: new listings have been arriving on market in relatively moderate numbers, especially as compared to the beginning of the autumn 2010 season in mid-September. It appears that the number of new listings is not currently meeting buyer demand.

Paragon Real Estate Group
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SF Median Home Sales Price
For houses, condos, TICs by Month: as is typical in January, the median home price dropped. This is for 2 main reasons: firstly, for whatever reasons, a greater percentage of buyers of more expensive homes check out once the holiday season begins in mid-late November, and this affects the median sales price for the subsequent months of closings. Secondly, while many sellers pull their listings from the market for the holidays, banks do not: bank-owned home sales thus climb as a percentage of sales, and since bank-owned sales are heavily clustered at the lower price points, that drags the median price as well. January’s median sales price was virtually the same as in January 2010, which is in keeping with the overall stability of median prices in the City over the past 7 quarters. Indeed, despite jogging up and down on a monthly basis, comparing 2010 with 2009, the overall median sales prices for both houses and condos in SF were virtually unchanged. More on SF Median Prices

Paragon Real Estate Group
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Months’ Supply of Inventory (MSI)
For SF Houses & Condos by Month: except for April 2010 (with its tax credit crush of sales), the MSI in January was the lowest for the last 13 months, and signficantly below the level of January 2010. If we look at just houses, the strongest selling property type, the MSI drops to a very low 2.8 months of inventory. MSI for bank-owned and short sale homes in SF dropped to an even lower 2 months of inventory, signaling a very hot market for these typically lower-end “distress sale” homes.

Paragon Real Estate Group
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SF Distress Home Unit Sales
(By Month) In this chart, distress sales are defined as both bank-owned (REO) property sales and short sales (the lender must agree to a reduced payment on the outstanding loan for the sale to close), though one should note that these are somewhat different animals. In short sales, the seller still lives in the home and it usually does not look “distressed” as is often the case with bank-owned homes. (Short sales can be very time consuming and aggravating, due to the requirement for lender approval.) The monthly number of distress sales has stayed relatively stable in 2010, and though this January’s number was higher than that of January 2010, as a percentage of total sales it was virtually unchanged year over year. As seen in a later chart, distress sales are mostly clustered in the lower price ranges of home sales in the City.

Paragon Real Estate Group
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Percentage of Distress Sales by District
The top chart shows the percentage of distress sales (both REO & short sales) by quarter in the less affluent Realtor districts of 3 & 10 (Bayview across to Oceanview), while the lower chart shows the percentage of such sales in the affluent districts of 5 (Noe/ Castro/ Haight) and 7 (Pacific Heights/ Marina). The cross-hatched portion of the column reflects the number of distress sales. In SF, the whole phenomenon of distress sales largely began in late 2008/ early 2009. As one can see, the less affluent districts 3 & 10 have been hugely affected, with the percentage of distress sales running 38% – 45% in the past 4 quarters. The more affluent districts 5 & 7 have been relatively unaffected by distress sales, with the percentage usually running in the 3 – 6% range (and those predominately in the lowest price ranges for homes in those neighborhoods). In both charts, the percentage of distress sales in the 4th quarter of 2010 was the lowest for the year.

Paragon Real Estate Group
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2010 Bank-Owned (REO) Home Sales by Price Range
In 2010, homes below $650,000 were much more dramatically affected by foreclosures and the resulting bank-owned home sales than those at the higher price ranges. Under $650,000, the percentage of REO sales is 29% for houses (and then, mostly in the less affluent areas of the city), and 13% for condos. Once above $650,000, the percentage drops to a relatively negligible 3-4% of sales. Above $1 million, it falls to well below 2%, not enough to impact values in these price ranges and the neighborhoods one finds them.

Paragon Real Estate Group
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Median Price for SF Distress Sale Homes
Reflecting the fact that most distress sales (both REO & short sales) occur at the lower price ranges, the median price for such sales in the City has been generally running in the $450,000 to $500,000 range, well below the overall median sales price for SF homes (approximately $700,000 when including distress sales; approximately $750,000 when not).

Paragon Real Estate Group
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Homes Sold vs. Listings Expired or Withdrawn
The green bars delineate closed sales per month and the purple bars delineate listings expired and withdrawn. While the market has definitely heated up since mid-September, a large number of listings still expire or are withdrawn without selling, typically due to being perceived as overpriced. (December is usually the peak month for expired/ withdrawn listings.) If not priced fairly, as defined by the market, the home typically won’t sell, or even attract offers.

Paragon Real Estate Group
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Mortgage Rates
For the past 12 months per Bankrate.com: interest rates have been climbing since their incredible lows in October, though they remain low by historic standards and are roughly comparable to where they stood 8-10 months ago. Many pundits believe rates will continue to increase in 2011. Rate increases could affect the market in two totally different ways: buyers may pull out of the market as the cost of home buying increases, or buyers may rush into the market having come to the conclusion that prices have bottomed out, and they best move quickly before interest rates climb further. Needless to say, interest rates can affect the cost of home ownership very significantly (unless one is paying all cash): an increase of 1 percentage point is roughly comparable to paying a 10% higher purchase price.

Paragon Real Estate Group
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Mortgage Rates since 1971
Here’s a good chart to put into context the recent rise in rates since last October.
Paragon Real Estate Group
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Chart: Where Buyers Found the Home They Purchased in 2010