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".