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market (from deals falling through), as well as increasing numbers of listings expiring without sale and listings being withdrawn from the market. (Listings are often withdrawn for the holiday season to be relisted in the new year.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)

 HousesCondosTICs2-4 Units
2 weeks ending11/24        12/811/24          12/811/24         12/811/24        12/8
New Listings105               5786                7026                 2624                20
Went Contingent52                4943                3222                 1012                11
Went Pending74               6444                47 7                 2210                12
Sold78               6750                 45 4                 1711                11
Back on Market31               3133                 21 9                 1110                  9
Price Reduction127              71135               6940                 3831                 20
Expired25               3621                45 8                 3113                 16
Withdrawn47               5268              10520                 2813                 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

 HousesCondosTICs2-4 Units
                    As of:10/27/08       12/8/0810/27/08     12/8/0810/27/08   12/8/0810/27/08   12/8/08
Total Active713                     601792                   660275                 241245                213
Contingent/Pending105/ 176       96/ 15386/ 141        76/ 11235/ 32          42/ 2924/ 44         29/ 35
Median List Price (LP) for Active Properties850k                 840k765k                 725k638k              599k1.395m       1.349m
Median LP for Properties Contingent & Pending                        629k                         645k                      549k                    1.131m
Avg Days on Mkt (Active)67                        7963                        7460                     7383                    94
 30 Days Ending:
(Year to Year Comparison)
12/1/07         12/1/0812/1/07          12/1/0812/1/07       12/1/0812/1/07     12/1/08
Total Sales188                   139190                     8646                      1248                      17
Median Sale Price928k                  780k778k                 702k600k                551k1.272m              1.2m
Avg Sale Price1.292m              1.027m893k                 794k644k                565k1.323m          1.265m
Avg $/sq.ft.$641/sq.ft.     $548$744/sq.ft.     $635N/A                 N/A$458/sq.ft.    $457
Avg DOM40 days            55 days48 days          60 days61 days        70 days49 days         56 days
% Selling within 30 days and the average % of LP for those sales08: 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
4.8 months7.8 months8.9 months12.0 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 TypeMonths 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: SFD4.8 months3.8 months52 days120 days
All SF: Condo7.8 months3.2 months64 days90 days
All SF: TIC8.9 months4.2 months58 days98 days
District 1: SFD & Condo6.2 months2.1 months56 days85 days
District 2: SFD3.4 months2.4 months51 days80 days
District 3: SFD6.5 months6.7 months61 days96 days
District 4: SFD3.1 months2.0 months63 days84 days
District 5: SFD9.6 months2.0 months45 days140 days
District 5: Condo3.5 months1.3 months41 days71 days
District 5: TIC7.6 months3.0 months66 days87 days
District 6: Condo6.2 months2.2 months49 days152 days
District 7: SFD20.5 months3.2 months20 days179 days
District 7: Condo9.1 months1.3 months40 days71 days
District 8: Condo6.4 months4.1 months58 days81 days
District 9: SFD6.3 months3.7 months53 days185 days
District 9: Condo12.6 months4.1 months89 days101 days
District 10: SFD3.4 months7.5 months50 days110 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.