Market Update

December 11, 2008

I have a big statistical update for you this issue, but the highlights are a) normal seasonal market slowdown, b) buyers shift toward less expensive inventory, and c) buyers are gaining power as inventory climbs.

Statistics from the last two weeks show a slowing market, which typically occurs as the holiday season begins. Fewer new listings and fewer accepted offers. There are still large numbers of price reductions and of properties coming back on market (from deals falling through), as well as increasing numbers of listings expiring without sale and listings being withdrawn from the market. (Listings are often withdrawn for the holiday season to be relisted in the new year. Sellers who have given up on getting their price will also withdraw their properties from the market.)

MLS Hotsheet Statistics comparing the last two weeks, 11/24/08 – 12/8/08
with the 2-week period 11/10/08 – 11/24/08


Districts 1-10 (All SF)

  Houses Condos TICs 2-4 Units
2 weeks ending 11/24        12/8 11/24          12/8 11/24         12/8 11/24        12/8
New Listings 105               57 86                70 26                 26 24                20
Went Contingent 52                49 43                32 22                 10 12                11
Went Pending 74               64 44                47  7                 22 10                12
Sold 78               67 50                 45  4                 17 11                11
Back on Market 31               31 33                 21  9                 11 10                  9
Price Reduction 127              71 135               69 40                 38 31                 20
Expired 25               36 21                45  8                 31 13                 16
Withdrawn 47               52 68              105 20                 28 13                 17

SF MLS Statistics: Active as of 10/27/08 and as of 12/8/08
& 30-Day Sales Figures Comparing 11/1/08 – 12/1/08 to the comparable period of 2007

  Houses Condos TICs 2-4 Units
                    As of: 10/27/08       12/8/08 10/27/08     12/8/08 10/27/08   12/8/08 10/27/08   12/8/08
Total Active 713                     601 792                   660 275                 241 245                213
Contingent/Pending 105/ 176       96/ 153 86/ 141        76/ 112 35/ 32          42/ 29 24/ 44         29/ 35
Median List Price (LP) for Active Properties 850k                 840k 765k                 725k 638k              599k 1.395m       1.349m
Median LP for Properties Contingent & Pending                         629k                          645k                       549k                     1.131m
Avg Days on Mkt (Active) 67                        79 63                        74 60                     73 83                    94
         
 30 Days Ending:
(Year to Year Comparison)
12/1/07         12/1/08 12/1/07          12/1/08 12/1/07       12/1/08 12/1/07     12/1/08
Total Sales 188                   139 190                     86 46                      12 48                      17
Median Sale Price 928k                  780k 778k                 702k 600k                551k 1.272m              1.2m
Avg Sale Price 1.292m              1.027m 893k                 794k 644k                565k 1.323m          1.265m
Avg $/sq.ft. $641/sq.ft.     $548 $744/sq.ft.     $635 N/A                 N/A $458/sq.ft.    $457
Avg DOM 40 days            55 days 48 days          60 days 61 days        70 days 49 days         56 days
% Selling within 30 days and the average % of LP for those sales 08: 37% at 99.8% of LP
07: 52% at 104.9% of LP
08: 27% at 100.9% of LP
07: 47% at 104% of LP
08: 25% at 99.3% of LP
07: 21% at 106% of LP
08: 24% at 96.7% of LP
07: 39% at 103.1% of LP
Months Supply
of Inventory
  11/30/08
4.8 months 7.8 months 8.9 months 12.0 months

 

 

Still dramatic differences between the median prices for properties recently sold and currently actively for sale and the median prices for properties that have accepted offers but not yet closed (contingent & pending), indicating a market in the midst of a significant shift. The 2008 sales figures above generally reflect the closing of properties which accepted offers after September 15th, when the financial crisis took a quantum leap with the bankruptcy of Lehman Brothers. Looking at year-to-year comparisons, we see large drops in the number of sales: 26% for houses; 55% for condos; 74% for TICs; 65% for 2-4 Unit Bldgs. Also significant declines in median sales price, average sales price and dollar per square foot. Months-Supply-Inventory and Days-on-Market have increased dramatically for all property types. There were significant drops in the percentage of properties selling within 30 days of going on market and in the average sales price to list price percentage (SP/LP).  It is the first time in recent memory that houses selling within 30 days of going on market sold at an average sales price below the list price.
And now the question you are all asking:  Is it a buyer’s market (finally)?  Well, the answer is complex.

Opinions vary but generally speaking, 4-6 months supply of inventory is considered a “balanced” market between buyers and sellers; less than 4 months is considered a sellers’ market; and more than 6 months is considered a buyers’ market. By these definitions, for the first time in many years, the residential market in most of San Francisco’s neighborhoods is moving into a buyers’ market.

Area/Property Type Months Supply of
Inventory (MSI)
As of 11/30/08
Months Supply of Inventory
As of 11/30/07
Average Days on Market (DOM)
(under contract)
Average Days on Market
(for sale)
All SF: SFD 4.8 months 3.8 months 52 days 120 days
All SF: Condo 7.8 months 3.2 months 64 days 90 days
All SF: TIC 8.9 months 4.2 months 58 days 98 days
District 1: SFD & Condo 6.2 months 2.1 months 56 days 85 days
District 2: SFD 3.4 months 2.4 months 51 days 80 days
District 3: SFD 6.5 months 6.7 months 61 days 96 days
District 4: SFD 3.1 months 2.0 months 63 days 84 days
District 5: SFD 9.6 months 2.0 months 45 days 140 days
District 5: Condo 3.5 months 1.3 months 41 days 71 days
District 5: TIC 7.6 months 3.0 months 66 days 87 days
District 6: Condo 6.2 months 2.2 months 49 days 152 days
District 7: SFD 20.5 months 3.2 months 20 days 179 days
District 7: Condo 9.1 months 1.3 months 40 days 71 days
District 8: Condo 6.4 months 4.1 months 58 days 81 days
District 9: SFD 6.3 months 3.7 months 53 days 185 days
District 9: Condo 12.6 months 4.1 months 89 days 101 days
District 10: SFD 3.4 months 7.5 months 50 days 110 days

 AVERAGE DAYS ON MARKET (DOM) is defined as the average number of days it took all of the properties that went under contract during the period to accept a first position offer.

MONTH’S SUPPLY OF INVENTORY (MSI) is a measure of how long it would take, in months, to sell the existing inventory at the current sales rate for the specific neighborhood and property type. MSI is defined as the number of active properties on the market for one day or more during the month, less the number of properties that have been withdrawn or expired, divided by the number of properties that have gone under contract during the month.

As this analysis was done on 12/5/08 regarding November 08 activity, the Months-Supply-of-Inventory figure is possibly skewed a little higher than it should be since a number of ratifications occurring in November may not have yet been reported to MLS.

The only districts showing a decline in MSI year to year are Districts 3 & 10 – where sales activity has picked up in recent months, probably due to foreclosure sales. Many districts saw a major increase of MSI – sometimes doubling, tripling or more – comparing 11/08 to 11/07.

Average days-on-market have increased significantly for both sold and pending-sale homes, but it is the “For Sale” DOM which particularly stands out. Many properties are sitting on the market for much longer periods of time. Subsequently, the number of price reductions has soared as well.

All data is derived from Agent Metrics, may contain errors and omissions and is not guaranteed. Statistical data can sometimes swing dramatically from month to month.

 

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