2010 Home Sales at Median Price by Neighborhood
Buyer demand has been strong since the autumn sales season began in mid-September. Overall median home prices continue to remain stable – as they have for the past 12–16 months – jogging up and down within a narrow band of value. Inventory is about 12% higher than 1 year ago, but Months’ Supply of Inventory remains at about 4 months of inventory, which is considered a relatively balanced situation between buyer’s and seller’s markets. However, for every 10 listings that have sold in the past 4 months, another 8 have expired without selling: buyers are choosing those properties they consider fairly priced (which typically sell quite quickly) and ignoring the rest. Average Days on Market for those houses, condos and TICs which did sell was 54 days in October, which is the lowest figure in over 2 years.
Below are specific San Francisco home sales which closed at or near the median prices for houses and condos sold in the neighborhood specified – however, they are not necessarily representative of typical values.
Pacific Heights, $3,500,000, 4BR, 4.5 BA Victorian on California Street, 4509 sqft, panoramic views, decks, 6 fireplaces, 2 car parking, $776/sqft
Sea Cliff, $3,000,000, 1951 4BR, 3.5BA on El Camino del Mar; 3491 sqft; water, Golden Gate and Mt Tam views; Zen garden, 8000 sqft lot, 2 car parking, $859/sqft
Clarendon Heights, $2,800,000, modern 3-level 6BR, 5.5BA on Villa, 4580 sqft, panoramic views, all new systems, 4 car parking, $617/sqft
Russian Hill, $2,250,000, 1906 3BR, 2.5BA on Hyde, 2090 sqft, deck, garden, library, 2 car parking, $1077/sqft
Telegraph Hill, $2,000,000, 1912 3BR, 2.5BA Edwardian on Vallejo cul de sac; spectacular views of bay, bridge and downtown; roof deck, separate apartment, leased parking
Marina, $1,875,000, 1930 3BR, 2.5BA on Cervantes, 2180 sqft, seismic upgrades, bonus office, 2 pkg, $860/sqft
St Francis Wood, $1,825,000, 1956 4BR, 3.5BA on San Pablo, 3740 sqft, ocean views, bank-owned sale, 2 pkg, $488/sqft
Lake Street, $1,759,000 (median is $1.85m), 1913 3BR, 2.75BA, North of Lake Craftsman on 18th, 3465 sqft, family room, needs restoration work, 1 pkg, $508/sqft
Eureka Valley, $1,475,000, 1905 4BR, 2.5BA Victorian on Noe, 2389 sqft, family room, sunroom, 1 pkg, $617/sqft
Cole Valley, $1,450,000, 1907 3BR, 3BA on Cole, 2040 sqft, new systems and foundation, garden, deck, 2 pkg, $711/sqft
Forest Hill, $1,400,000, 1926 3BR, 3BA detached Spanish-Med on Magellan, bonus family room, deck, yard, 1 pkg
Lower Pacific Heights, $1,232,000, 1883 4BR, 2BA Victorian on Pine, needs complete renovation, 1760 sqft, 2 pkg, $700/sqft
North of Panhandle (NOPA), $1,230,000, 1910 2BR, 1.5BA Craftsman Edwardian on Hayes, 1950 sqft, seismic upgrades, decks, 2 pkg, $631/sqft (more…)
Due to the significant differences between the market for homes over 1.5 Million and homes under that price point I though that comparing it with the statistics in my Lowest Sales Volume in 15 Years? Not so fast . . . article, would be useful.
Below is a chart that shows closed sales. The highest number of closed home sales for 2010 so far was in March. This is unusual, but will make sense as we analyze other sales data, below.
Closed Home Sales Over 1.5 MM in SF over the past 25 Months:
Unlike the market for all home sales in San Francisco, for which ratifications peaked early in April in 2010, the luxury home market peaked at a more traditional time, in May. The chart below shows the luxury home market that was perhaps affected INVERSELY by the government tax credits – it’s possible attention was focused on properties for which the tax credits were available. We also see that ratifications in June and July remained relatively strong.
Accepted Offers on SF Homes over $1.5MM over the past 25 Months:
Our final measure is the months supply of inventory which is generally used to show whether it is a buyers’ market or a sellers’ market. The market earlier in the year was a definite buyers’ market, but with the glut of ratifications in February that ate up the sitting inventory from Fall 2009, the late spring and summer market turned an advantage towards sellers. Looking at luxury home sales over the past six months, the main factor seems to be pricing. There were 196 homes sold in San Francisco over $1.5MM in the last six months and 144 homes either expired or were withdrawn. Of those that sold, 80 sold over their original asking price at an average of 105.33% in an average of 24.35 days on the market. The remaining 116 sold homes were reduced on average about 10% before receiving an offer and sold for 92.04% of their original asking price after an average of 78 days on the market.
As always in San Francisco, pricing is king and these numbers prove again s to go you that just because a seller “wants” or “needs” a price, buyers won’t move until they are perceived as a value – and then they rush to outbid each other.
The large number of listings withdrawn or expired without selling combined with low short and REO sales volume tells us that a large percentage of sellers over $1.5MM are attempting to delay until the market brings them the price they want. After 2 years of waiting, I wonder if luxury sellers will finally be ready to sell at the prices the market will bear … It will be interesting to see what the fall brings.
Months Supply of Inventory: SF Homes over $1.5MM over the past 25 Months:
There have been hundreds of the-sky-is-falling articles everywhere, in every major newspaper, about how sales drastically slumped in July when compared with May, or when compared to July of last year, both nationally and in the bay area. Today it was on the front page of the New York Times and it has been a frequent topic in the SF Chronicle …
But with statistics, context is everything, and these articles show a fundamental lack of understanding of current context and are misleading regarding what’s going on in San Francisco (which is, after all, the best place on earth).
The first chart below is of the last 2 years’ home sales in SF. July 2010 is indeed well below May 2010, as well as well below July 09 and July 08. However, this is almost completely a function of the fact that deals that would have naturally and typically accepted offers (ratified) in May 2010 were rushed into April so as to meet the Federal Tax Credit deadline. Because of that crush of April ratifications, closed sales in May and June soared way over the sales rate of past years, AND May ratifications this year were much lower than normal. Typically May is one of the highest ratification months of the year; low May ratifications translated to lower July closings. Typically, July is one of the highest closed sales months because of the high May ratifications. With the unusual events this year, the numbers were thrown off – which created the dramatic percentage declines everyone is chattering on about.
Remember: closed sales are 30 – 60 days behind the market (the time of offers being accepted). To get a sense of current market activity, one looks at ratifications, as in the second chart below.
In the third chart below, the Months’ Supply of Inventory for SF houses and condos is shown over the past 2 years. MSI, at a moderately low 3.8 months of inventory, hasn’t budged in three months – again one can see the effect of the April tax credit rush on the chart — and it is almost exactly the same as in July 08 and July 09. (The lower the MSI, the hotter the market.)
Closed Home Sales in SF over the past 25 Months:
Below, we see the huge surge of ratifications in April which (stealing normal early May ratifications) led to the large decline in May. Thus May’s number of accepted offers is below past years. But June 2010 ratifications are above last year’s. And July’s ratifications are above July 2009 and July 2008. That is not an indication of a collapsing market. Yes, the market surged in April due to the expiring tax credit, but except for the initial effect on May ratifications (and the resulting effect on July closings), the expiring tax credit hasn’t affected June and July ratifications at all.
Accepted Offers on SF Homes over the past 25 Months:
Since the SF home market started recovering in spring 2009 from the “crash” of autumn 2008, Months’ Supply of Inventory has been very stable, delineating a relatively stable market, running typically between 3 to 4 months of inventory. This is generally considered a moderately low MSI, signifying a relatively strong and consistent buyer demand. Again, it is unchanged for three months, and almost identical to the MSI recorded one year ago and two years ago.
Months’ Supply of Inventory: San Francisco Houses & Condos
None of this is to say that the market might not change tomorrow. It is to say that the most recent statistics don’t currently indicate any dramatic change in market conditions in San Francisco.
Despite the constant news of dramatic changes in the real estate market – Values soar! Values crashing! Market up or down ___% from last month! Double dip recession! – the home market in San Francisco has exhibited a remarkable stability over the past year. As shown in the charts below, median prices for both houses and condos are virtually unchanged from one year ago; buyer demand remains steady; months’ supply of inventory remains steady; foreclosure sales are stable; low interest rates continue. Statistics jump around within a relatively narrow percentage band: there has certainly been no definitive trend up or down. It is neither a crazy buyers’ market nor a crazy sellers’ market: it’s a relatively healthy, balanced market, where the basic rules of real estate generally apply: well-priced, well-prepared, well-marketed homes typically sell quickly and homes without those characteristics don’t.
Of the 11 neighborhoods we are tracking for 2 bedroom condominiums in San Francisco, 6 showed sale prices higher in the first half of 2010 over 2009 numbers. For the 13 neighborhoods in which we are tracking single family homes, 8 showed improvement in the same period. Interestingly enough, for TICs, all three of the neighborhoods under consideration showed improvement.
I can almost hear you asking, well, what does this mean? I think it means that the market is stabilizing and sluggishly trying to improve, but that it depends very much on the inventory being offered. In Glen Park, for example, there were a couple of very large, brand new homes sold that were very dissimilar to the inventory that closed in 2009. The extreme sale prices for these homes (over 1.6MM) had a dramatic affect (+19%) on the average sale price out of only 11 sales in the first half of 2010. I would say this is an anecdotal improvement in values. I would contrast this with the 3.3% improvement in values in Pacific Heights/Cow Hollow based on 27 sales, which I think is a more valid reflection of marketplace recovery.
As always, if you want to check in on the value of your home, I’m happy to work it up for you!
Now for the details (click on image to see larger):
Median prices and average dollar per square foot figures are generalities, which may be affected by other market factors besides changes in value. All information contained 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 these analyses.
San Francisco was the # 1 pick, in front of Pittsburgh, Phoenix, Memphis, and Charleston WV.
I hope the Today Show’s expert Barbara Corcoran is right!
Therefore, the market data for February, as seen in the charts below, is of particular interest. While it’s unwise to make too much of one month’s data (a failing of many pundits), it is surprising how sharply February’s statistics indicate a strengthening market. That is not to say a double-dip isn’t possible — the state, national and world economies are still fragile — just that we are not yet seeing indications of one here in San Francisco. Those who have spent the last year waiting eagerly for further price declines have so far waited in vain. (For the record: according to the Case-Shiller index, home values in the 5-county SF Metro Area have increased 4 – 5% in 2009, but the city accounts for only a small percentage of those sales.) It will be interesting to see if the trends seen below continue, as spring gets under way — and what implications that might hold regarding price movements.
This is what I was asked at every party this past holiday season. I’m sure you heard folks discussing this as well. I’m happy to report that the news is not as bad as you might think!
Despite all the hype, the median home price (house and condo) in the city was remarkably stable in 2009, running between $685,000 and $710,000 from April through October 2009, then ticking up to $731,000 in November. It is too soon to tell if November’s increase in median price is the beginning of a trend or just an anomalous blip. This is after the general 15% to 25% decline in values from their times of peak value in most neighborhoods.* In comparison, in 2007, the median home price in the city hit $829,000.
While prices are down from each neighborhood’s “peak,” the city-wide median home sale price has been disproportionately affected because the low end has been disproportionately active. This activity is being driven by the low interest rates available on government backed mortgages below $729,000. Loan interest rates are a vital part of the home-purchase affordability equation because of their impact on both qualifying for a loan and the ongoing monthly cost of home ownership. Interest rates hit at all time low in late November. While it’s harder to qualify than in past years, the rates are fantastic. If your home (or the home you want to buy) is well-priced and that price is below about $910,000, activity/competition will be high. The further the value/price is away from $910,000, the fewer buyers there will be who can get a great interest rate, and there will be commensurately less activity. ($729,000 is just about 80% of $910,000 and most loan products offering great rates require a minimum 20% down payment.)
More listings accepted offers in October than in any month in the past 2 years. You can see that this is the case in the chart of recent sales. All of these closings took place since December 1, 2009. When I pulled the same sample data for my piece in August 2009, I had to include almost 2 months to get enough data! New ratifications began to taper off in November, which is common for the holidays, but the number of accepted offers was still higher than in November 2008 or 2007. The holiday season was a good time for buyers to make offers because there wasn’t as much competition from other buyers and sellers are eager to move on with their lives. Now that it’s January, it can be a good strategy to have your agent review recently expired or withdrawn listings. These homes may still be for sale – just taking an official break from marketing while waiting for spring.
These have been stressful times for all of us. Before you worry about the value of your home, I encourage you to ask an expert. Realtors spend all our time discussing, researching and thinking about property values. So if you need to know about your home – just ask one of us!
*The southern neighborhoods hit hard by foreclosures have seen 25% – 40% declines. As has been the case since the foreclosure crisis began, the majority of bank-owned (REO) house sales occur in the city’s less affluent, southern border neighborhoods running from Oceanview to Bayview-indeed, a little more than half of all house sales in those neighborhoods are either REO or short sales. For REO condos, the main neighborhoods are SOMA, South Beach and Mission Bay, where most recent condo development has taken place. read more →
We have a lot to be thankful for in San Francisco. We have largely survived this real estate downturn without the enormous declines we are seeing on the news. However, they have been significant. Anyone in the market today on the seller side certainly can tell you that.
I thought it was a good time to check in and update the article from earlier this year “How Much Have San Francisco Home Values Declined Since their Peak?” Thankfully, many neighborhoods have not had a change since April, when values were even lower than in February, and some have even climbed a percent or two.
Below is an analysis of San Francisco neighborhoods comparing Average Dollar per Square Foot ($/sqft) at what is estimated to be peak value, to the average for sales occurring 10/15/08 – 4/1/09 (the market period right after the 9/15/08 financial markets meltdown), and then to the average for more recent sales occurring 5/1/09 – 10/30/09 (as home sales volume – and financial markets – surged again).
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 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.
Dollar per square foot is based upon the home’s interior living space and does not include garages, unfinished attics and basements, rooms built without permit, or exterior spaces. These figures are usually derived from appraisals, tax records or condo maps, but are sometimes unreliable (especially for older homes) or unreported altogether. There are often surprisingly wide variations of value within neighborhoods, and averages may be distorted by one or two sales substantially higher or lower than the norm. They may also be distorted by confidential sales, which are not uncommon at the upper end of the market. (For confidential sales, the list price, and not the sales price, is used for the calculation.)
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
Changes in Average Dollar per Square Foot Values
for Selected San Francisco Neighborhoods & Property Types
|Avg $/sq.ft. at Peak Value||10/15/08 – 4/01/09||5/1/09 –|
|Change from 4/1/09||Total Change from|
Est. Peak Value
$300k – 800k
|$507/sq.ft.||$294/sq.ft.||$280/sq.ft.||– 5%||– 45%|
|Ingleside/ Hghts / Oceanview*||House|
$400k – 800k
|$580||$449||$444||– 1%||– 23%|
$400k – 800k
|$600||$457||$450||– 1.5%||– 25%|
|Central/Outer Richmond **||House|
$700k – 1.4m
$500k – $800k
|Central/ Outer Sunset**||House|
$500k – 900k
|$626||$533||$501||– 6%||– 20%|
$500k – 1m
|$677||$598||$550||– 8%||– 19%|
|Hayes Valley/ Alamo/ NOPA***||Condo|
$500k – 900k
|$684||$602||$559||– 7%||– 18%|
$500k – 900k
|Avg $/sq.ft. at Peak Value||10/15/08 – 4/01/09||5/1/09 –|
|Change from 4/1/09||Total Change from|
Est. Peak Value
$500k – 1m
|$651/sq.ft.||$556/sq.ft.||$567/sq.ft.||+ 2%||– 13%|
|St Francis Wd/W.|
Portal/Forest H **
$800k – 2.5m
|Noe & Eureka Valleys***||Condo|
$500k – 1m
|$751||$675||$613||– 9%||– 18%|
$500k – 1m
|$785||$681||$640||– 6%||– 18%|
$700k – 1.4m
$600k – 1.2m
|Noe & Eureka Valleys***||House|
$800k – 1.5m
|$891||$755||$707||– 6%||– 21%|
|Pacific Hghts/ Marina (Dist 7)***||Condo|
$600k – 1.2m
|$809||$763||$733||– 4%||– 9%|
|Most Expensive North SF Areas***||House|
$1.5m – $4m
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 short-term trends, and do not necessarily reflect values for specific properties. Average dollar per square foot values fluctuate even in a stable price market as they are impacted by individual sales, and changes of less than 3-4% should probably be ignored. 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. read more →
As I mention in my article on volume, more activity puts pressure on prices. As you can see in the table below, the number of transactions where the property is selling for more than the asking price, is sharply up from earlier this year, where even for single family homes, under 20% of transactions were yeilding a sales price over asking. We’re at a whopping 54% of single family home transactions closed in the last two weeks coming in over asking price. To see more about earlier in the year, click see “Have we found the Floor?” from July 31, 2009
|Last 2 weeks’ home sales in SF:|
|Over Ask||Under Ask||At Ask||Total|
|% of sales||54%||28%||18%|
|% of sales||24%||58%||18%|
|2-4 Unit Buildings||2||9||1||12|
|% of sales||17%||75%||8%|
|% of sales||37%||45%||17%|