How Much Have San Francisco Home Values Declined Since their Peak?

February 3, 2009

A burning question for most of us, to be sure.  The below analysis should help to shed some light.  However, a friend of mine says that statistics are like bikinis (they can cover up the crucial bits while exposing only what they intend to expose) and I couldn’t agree more.  If you want a detailed analysis of the value of your home, don’t be shy about asking.  Your situation is likely a bit different than the “big picture.”

This analysis of San Francisco neighborhoods compares dollar per square foot ($/sq.ft.) at what is estimated to be the time when peak value was reached, to what the $/sq.ft. was for sales occurring 10/15/08 – 1/30/09. (Sales occurring after 10/15/08 reflect the impact of the 9/15/08 financial meltdown on the SF market.)

The neighborhoods below were chosen because enough sales occurred in the comparison periods to generate what appeared to be reliable statistical results. (Many areas of the city did not have sufficient sales.) We have chosen $/sq.ft. because it is more trustworthy than median prices when trying to assess changes in value for specific properties.  Indeed, median prices have dropped significantly more than $/sq.ft. because less expensive homes now make up a much larger proportion of sales than they did previously (for a variety of reasons, especially financing conditions).

Different areas reached peak values at different times – in 2006, 2007 or 2008 – and the asterisked notes denote the estimated peak value period that pertains. The price ranges of the sales included were chosen because we felt them to be in a standard range of value for the area and property type specified – thus attempting to eliminate both the ultra high end and the ultra low end, which often distort averages.

Important note: the changes delineated probably understate the actual decline in values for 3 reasons:

  1. In a declining market, sales data – which typically shows up 30 to 45 days after acceptance of offers – will always be a step behind current activity, i.e. offers being accepted right now.
  2. The market has definitely shifted to smaller, less expensive homes (less expensive as to total sales price). All things being equal, a smaller home will have a higher dollar per square foot value than a larger one, therefore skewing current values higher than they ought to be in an apples-to-apples comparison.
  3. In a sellers’ market, virtually everything sells, but in a buyers’ market, typically just the best homes sell – best appearing, best condition and/or best value. So the $/sq.ft. for the recent period applies to the “best homes” while the $/sq.ft. for the peak period applies to homes of a much wider range of quality.

Key to Estimated Peak-Value Period for the Chart Below:

*             Peak values estimated to have been reached 1/1/06 – 6/30/06
**           Peak values estimated to have been reached 1/1/07 – 6/30/07
***        Peak values estimated to have been reached 1/1/08 – 6/30/08

Only homes with parking were included in the below analysis. SFD = single family dwelling (house)

Neighborhood
or District
Property Type
Price Range
Avg $/sq.ft. at Peak of Market $/sq.ft. for Sales
10/15/08 – 01/09
Change in Avg $/sq.ft. Value
Bayview/Excelsior
(District 10)*
SFD (House)
$400 – 800k
$554/sq.ft. $416/sq.ft. – 25%
Ingleside/ Oceanview* SFD
$400k – 800k
$572 $459 – 20%
Potrero Hill/ Bernal Hghts** SFD
$700k – 1.6m
$678 $610 – 10%
Richmond District** SFD
$700k – 1.6m
$582 $547 – 6%
Parkside/ Outer & Central Sunset** SFD
$550 – 1.1m
$608 $542 – 11%
Miraloma/ Sunnyside** SFD
$600k – 1.2m
$667 $611 – 8.4%
SOMA** Condo
$500k – 900k
$689 $534 – 22.5%
Noe & Eureka Valleys*** SFD
$800k – 2m
$856 $770 – 10%
Noe & Eureka Valleys*** Condo
$500k – 1.2m
$759 $704 – 7%
Pacific Hghts/ Marina (Dist 7)*** Condo
$600k – 1.2m
$818 $762 – 7%
South Beach*** Condo
$500k – 1m
$785 $713 – 9%
Hayes Valley/ Alamo/ NOPA*** Condo
$500k – 900k
$684 $612 – 10.5%

Averages are generalities and cannot account for the varieties in location, condition and amenities found in SF homes. Averages may be affected by unusual events or anomalous short-term trends, and do not necessarily reflect values for specific properties.  

All data from sources deemed reliable, but not guaranteed and may contain errors and omissions. Sales not reported to MLS – such as many new condo-development sales – are not included in this analysis. February 3, 2009
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