SF December prices lowest in 2 years

According to my feet on the street feel for the market San Francisco hit "bottom" for a couple of brief months in early 2006. According to Dataquest this December matched those lows. To put it all in perspective I've included all of Dataquest's 2007 numbers:

Jan '07 - Median Price $750,000 - up 0.7% over Jan '06
Feb '07 - Median Price $757,500 - up 2.4% over Feb '06
Mar '07 - Median Price $753,000 - down 2.1% from Mar '06
Apr '07 - Median Price $790,000 - up 1.4% over Apr '06
May '07 - Median Price $835,000 - up 8.4% over May '06
June '07 - Median Price $825,000 - up 4.4% over June '06
July '07 - Median Price $799,000 - up 3.1% over July '06
Aug '07 - Median Price $822,000 - up 7.8% over Aug '06
Sept '07 - Median Price $773,500 - up 1.9% over Sept '06
Oct '07 - Median Price $795,000 - up 3.9% over Oct '06
Nov '07 - Median Price $760,000 - up 7.2% over Nov '06
Dec '07 - Median Price $731,000 - down 1.9% from Dec '06

You'll note the seasonality of the San Francisco market... low in January, picking up steam and peaking from April through October and sliding back down again.

So how "real" are these numbers? Are there other factors at play? Should YOU be worried if you're an owner, or slow down your plans if you're a Buyer?

Outside of San Francisco, probably yes, you should be worried, although I'd strongly suggest buyers speed up... don't try to time the bottom since so many markets are already so low and you can bargain hunt and pick up something even lower than the overall market. However, in San Francisco, especially in the more affluent areas of town, "my feet on the street feel" tells me our market is going back up.... and quickly.

My belief has always been that there's much more behind the numbers to begin with... so let's look at them. First, a monthly "closed" number is actually the PREVIOUS month's activity because most Escrows are 30 days in San Francisco, so if you went into contract on a home in November, you Closed in December. So the above December numbers are actually November activity. November is Thanksgiving, and I can tell you almost nothing happened for me personally. In fact, even those that actively looked in December passed up on the homes they liked. But they are still active.... AND I've got several more active Buyers... so demand is picking up in my little world.

There were also fewer overall homes sold... and it's a median number, so more lower priced homes sold. Does that mean people are buying fewer higher priced homes? Well, back to "feet on the street feel". I have a couple of higher end buyers, and they've been extremely disappointed in the "inventory". It seems more likely that Seller's are not selling their premium homes. Unfortunately the general media can scare people into not Buying AND not Selling. Those that have to sell right now are those who can't afford to hold on... and that's usually owners of lower priced homes who don't have large cash reserves. Owners of multi-million properties don't have to sell... so they wait. If I were advising a Seller right now I'd advise them to hold off listing their home until March or April. And guess what, that's what most agents do. So this April through October's numbers are likely to go up just like 2007's numbers.

So... should you be worried about the San Francisco market? Well, if you want to buy in the "affluent" neighborhoods, expect prices to continue to rise. If you're a Seller you are still in a Seller's market. If you're in a less affluent area on the outskirts of the city, I expect this to be another tough year. As the Chronicle said a couple of weeks ago, this is a "tale of two cities".


CleanOffer San Francisco Trend Report

CleanOffer.com is the most complete MLS search service for consumers to search for homes for sale in San Francisco, and it allows you to save favorite listings and set up email alerts for specific searches. In addition they product Trend reports on the market.

The complete 2007 report is now available at this link. Interesting to see the trends for the past 7 years. The only segment of the market that was down significantly in '07 is the "Southwest" Condo market. Meanwhile, the "Northwest" market was up significantly.

If you'd like access to MLS searches on CleanOffer it's an invitation only service, but you can invite yourself at my specific link here.


Pacific Union's Avram Goldman on FOX Business News

My firm's CEO gets interviewed about the San Francisco and Bay Area real estate market. His opinion about the state of the market, and what to expect in the future.


The news media finally gets one right

Well, I generally rant against national media, but while local media generally don't know what they're talking about either when it comes to Real Estate, I finally read an article where the author actually did some research.

Carol Lloyd of the San Francisco Chronicle wrote an article two Sunday's ago which you can read here. She analyzed data from two sources to come to the conclusion I've been writing about for a while... that the "working class" neighborhoods in San Francisco are suffering, whereas the areas of "storied affluence" are up significantly in the last year.

She also sites Atherton, a gated community down south on the Bay Area's Peninsula, where the writer says people are "continuing to snatch up mansions like fresh cream puffs." If you can scroll to about minute 45 in this nearly 47 minute video you'll hear a Peninsula agent echo the same thing.

The bottom line reason cited in the article for the tale of "two cities" is that "people in Pacific Heights never had to lie for a loan". Although another agent rightly states that there are many highly paid technology professionals would rather live in urban areas with "walkable neighborhoods". In San Francisco there are a number of little communities that have fared quite well over the past year with central business district streets that locals love to live near. Examples include Fillmore Street in Lower Pac Heights, Polk Street in Russian Hill, 24th St in Noe Valley... and even Clement in the Richmond.

There are quite a few others... clean, safe blocks in affluent areas with coffee shops and restaurants, and the market is up in 2007, and from early "feel" it looks like they'll be up again in 2008.


"San Francisco" by Maxime Leforestier

Aerial Tour of the Golden Gate Bridge

Brief look at a handful of SF neighborhoods

Noe Valley

In Summary - a family oriented neighborhood where Real Estate prices always seem to go up.


SF up again per Dataquest

DQNews.com came out with their November report and San Francisco (the entire city) is up 7.2% over November '06. Solano County got crushed, down 14.8% with sales off by 50%. That's just crazy. 15.7% fewer homes sold in San Francisco, but a 50% drop for Solano is off the charts. My personal belief (and I know I can back this up with numbers if I felt like spending a couple of hours crunching numbers) is that San Francisco is up because the "luxury" market (in quotes because $1+ million isn't necessarily luxury in this town.... even $2 million isn't always luxury here) is strong, and higher priced homes going up will lift the overall figures.

Of course another look at the San Francisco number reveals that at $814,750 as the median price for November, it's BELOW the top of the market which came in May ($835,000) and June ($825,000) (see my full 2007 chart here). But, all that means is a seasonal drop off. November everyone is focusing on Thanksgiving and other travel and holiday plans. It's also the start of San Francisco's rainy season. Whereas May sales are reflective of April activity (30 days to Close is typical in SF, so something that got an Offer on April 15th would not Close and record it's Sold price until May 15th), and April is when the SF market almost always takes off with Buyers coming out of the wood works.

Plus Seller's know this, so the best and priciest homes also come on the market. If a Seller comes to me and asks to Sell their home in November, I'll ask if they can wait it out until April. Often, the price differential can be worth it to them if there isn't another monetary reason to sell then.

Bottom line... San Francisco is still going up. National news... well... it's news, and only bad news sells, so don't expect to hear about the strong markets like San Francisco.

Donald Trump says it's time to buy

I came across a CNN hour long interview of Donald Trump... and besides finally discovering that, yes, it is his real hair... but a comb over... so yes, he's bald with foot long hair combed backwards... I agreed with virtually everything he said about the current market.

Firstly, he thinks we're near the bottom, and it's about 6 months before it's totally bottomed out.

Secondly, he thinks it's time to buy. Yes, some markets will still go lower, but there it doesn't take much effort to find amazing bargains in any market that's taken a hit.

Third, New York City has done nothing but go up. It's a unique market. And while he didn't say this about San Francisco... San Francisco didn't come up... the same applies. If you've read my posts, you know I think there's a market within the market here in SF. Actually, there are several... many even... markets within San Francisco. If you want to be in the nicer neighborhoods, with proximity to restaurants, parks, or the Bay... you're gonna pay.

The #1 Selling season is almost here... it can start as early as January... but it's always strongest from March through June. If you're a Buyer, you'll have a lot to choose from, but probably a lot of competition. If you're a Seller, the Buyers come out in droves this time of year. Be sure to paint, clean and Stage your home to set yourself apart. And call me to get your home marketed right!!!