Weekly Fluj: Inventory, is there a lot of it?

Lots of people yapping on and on about how San Francisco listing inventory is through the roof, sales volume is in the toilet, and both median and average home prices have plummeted, but the Fluj says:

Seemingly the perception is that there is a lot of inventory, but is there, really? And as for prices, come on now!

Discuss, debate, have fun.

…and kicking it off, we’ll go ahead and show you Fluj’s first comment in the thread to get you going:

Right, so, “Inventory.”

Seemingly the conventional wisdom is that there is a lot of it. Why the disparity between what buyers in the field are actually excperiencing and the media/blogs then?

I did a search for available properties. I used a metric that I believe to be extremely common for San Franciscans. This is a search for a couple or a small family who hope to buy something with room to grow into.

The parameters are: 750K to $1.205M, 3 brs, 2 bas, 1 car parking. I limited the search zones to only generally safe(r) areas. Essentially I included everthing except Ingleside, Ingleside Heights, and Oceanview, all of 9 save Bernal and Potrero Hill, and all of 10.

I turned up 82 properties.

1. Of the 8 Richmond properties, only one was east of Funston, and it is a cosmetic fixer on 7th Ave for 899K. (On the market for 7 days, offers Tuesday, you best to hurry if interested IMO)

2. Twenty-seven are in the central or outer Sunset.

3. For areas 3, the Arch st. listing appears to be a nice little Merced Heights home for 559 a foot. Many searchers will not entertain areas 3.

4. For areas 4, if they are not on a very busy street or a fixer, only Forest Knoll, and Miraloma Park areas 4-D and 4-H have properties for 550-600 a foot. Like 3, many buyers will not entertain areas 4 as it is not particularly central.

5. Surprisingly, for areas 5, there are only two Glen Park listings. In Noe, there is only 4120 22nd, a permitted fixer in need of at least 600K in capital. In Ashbury Terrace, only one cosmetic fixer I know to have received two offers already. And there is one large fixer property up on Grand View — and it doesn’t have any views.

6. There was nothing in 6. This was surprising.

7-8. Nothing here. Not surprising.

9. Eleven are in Bernal Heights and will not appear in the search perameters of many groups. Two in Potrero Hill. The Wisconsin listing is a total fixer on a corner with very little southern exposure and an entrenched tenant. The Rhode Island property at $1.195M and 663 a foot appears to be a decent deal for North Slope.

So is that a lot of inventory? I really don’t think it is.

12 thoughts on “Weekly Fluj: Inventory, is there a lot of it?”

  1. Right, so, “Inventory.”

    Seemingly the conventional wisdom is that there is a lot of it. Why the disparity between what buyers in the field are actually excperiencing and the media/blogs then?

    I did a search for available properties. I used a metric that I believe to be extremely common for San Franciscans. This is a search for a couple or a small family who hope to buy something with room to grow into.

    The parameters are: 750K to $1.205M, 3 brs, 2 bas, 1 car parking. I limited the search zones to only generally safe(r) areas. Essentially I included everthing except Ingleside, Ingleside Heights, and Oceanview, all of 9 save Bernal and Potrero Hill, and all of 10.

    I turned up 82 properties.

    1. Of the 8 Richmond properties, only one was east of Funston, and it is a cosmetic fixer on 7th Ave for 899K. (On the market for 7 days, offers Tuesday, you best to hurry if interested IMO)

    2. Twenty-seven are in the central or outer Sunset.

    3. For areas 3, the Arch st. listing appears to be a nice little Merced Heights home for 559 a foot. Many searchers will not entertain areas 3.

    4. For areas 4, if they are not on a very busy street or a fixer, only Forest Knoll, and Miraloma Park areas 4-D and 4-H have properties for 550-600 a foot. Like 3, many buyers will not entertain areas 4 as it is not particularly central.

    5. Surprisingly, for areas 5, there are only two Glen Park listings. In Noe, there is only 4120 22nd, a permitted fixer in need of at least 600K in capital. In Ashbury Terrace, only one cosmetic fixer I know to have received two offers already. And there is one large fixer property up on Grand View — and it doesn’t have any views.

    6. There was nothing in 6. This was surprising.

    7-8. Nothing here. Not surprising.

    9. Eleven are in Bernal Heights and will not appear in the search perameters of many groups. Two in Potrero Hill. The Wisconsin listing is a total fixer on a corner with very little southern exposure and an entrenched tenant. The Rhode Island property at $1.195M and 663 a foot appears to be a decent deal for North Slope.

    So is that a lot of inventory? I really don’t think it is.

  2. Pure numbers — 1 — eight listings. 2. 31 listings. 3. 8 listings. 4. 19 listings.

    That’s 65 out of 82.

    Want areas 5 through the nicer parts of areas 9? Many do. There are 17 listings in those areas, and 11 are in Bernal Heights — of those, most are south slope. There are only two in Glen Park, and three in the rest of 5 — one is all but sold and two are in need of a ton of capital.

  3. Was this for SFHs? If so, the results are not that surprising for the “central areas” such as D6-8.

    Perhaps, if this was the case, a search for condos specifically would be interesting as well.

  4. OK,

    For condos there are 41 listings using the same metric. As you might expect other ‘hoods have opened up.

    1. 9 Richmond. Three east of Funston.

    2. 10 Sunset — this is quite pricy for a Sunset condo, right?

    3. 1 — Lake Merced hill, 1900 feet for 775K

    4. 4 here, all large Diamond Heights with big views

    5. 7 here. Ranging from 795K on Oak in the Haight to three ~1.2M condos, one each in Ashbury Terrace, Dolores Heights, and Noe Valley.

    6. 3 here. 856 Baker is pretty nice, reduced from $1.2M to 1.095M.

    7. One, 2413 Franklin for 899K — this is a fixer in shell condition

    8. one, 950 Columbus # 17 1776 sq ft for 975K.

    9. 4, one Bernal and three Potrero Hill.

  5. Great stuff Fluj! It’s tough to find anything decent for $1.5-2mil in D7 to be frank. This range use to be quite common back in 2005, but not any more. You’ve got to spend about $2.3+ to get something decent now.

  6. Fuj, all you did is prove that there aren’t a lot of ‘starter’ homes. And by started, I in no way mean to imply that $1.5M is ‘starter’ for anyone. I’m not disagreeing with your analysis but the point is skewed a bit IMO. By ‘lot’ of inventory, I think it phrase means that there is a greater amount of properties that are not selling. I’m more interested in the traditional statistics like How many Weeks or Months of inventory are we seeing on the market? And how does that compare versus what we’ve seen during the boom years?

  7. Yeah, but Eddy, people like living here and that is the affordable range for a broad swath of San Franciscans.

    Somebody answered your particular question in an article I read the other day. I’ll try to see if I can find it.

  8. eddy. do you mean the health of the stale fish inventory?

    Alex, can we have a current list?

    On that list, I’d list the same invotenry as above (upping the price to 1.5 as many fish go stale “just because” they are overpriced) and compare to same last year.

    not sure there is so much of it.

    think of buying a bathing suit. Inventory is large ENOUGH when you can have several choices in your size, several colors to pick from – and from the 5 to 10 you try on, you can actually find one that is not too expensive, about the color/style you wanted AND that you dont look fat in it.

    Translated to RE market, inventory is large ENOUGH when you can have several choices in your price ranges, several neighborhoods to pick from – and from the 5 ti 10 you visit and have a FAIR chance to make an offer (that takes any pending, high flying and other off market deals), you can actually find one that is not too expensive (ie your budget wont crash within 6 months), about the style/features/size you wanted AND that you can make your home in (like you’ll feel ok, safe, proud etc to live in).

    And as I feel about the market, there is NO inventory right now. NONE. I’m not saying that there are no good houses, or no deals, and that no buyer can be happy. I’m just saying that many people are not buying what they choose, but rather the less worse choice left on the shelf. (in the best case, the only problem being that it’s more expensive that they should afford)

    Inventory is when you have time to visit the houses on the market and decide for yourself which one is the first choice, and which one is worth your time of making an offer. Lack of inventory is when you depend on Alex pocket listings to actually have a chance to visit something before it flies the “pending” sign on the door.

    Lack of inventory is when you have a specific list of criterias, and only one property a year fits the list – creating the urgency to buy, the urgency to overbid, and high prices.

    Reasonable inventory is when you have 2-5 such properties a year. So if you miss that one, you can reasonnably wait for the next one. And right now, there is a good portion of the districts that see only a couple of properties coming on the market each year. (GGHts, WestP to name only two).

    SF is not a big even suburb where you can live anywhere save transportation differences. Districts are different, offer different property types and are not exchangeable.

    So when you look for a SFH in district 1, you might extend to district 2 – but certainly not to district 4, 8 or 9. So it’s not the total of 85 which matters, but the breakdown written by fluj.

    Or to have another take on the question. There will be inventory when talks will REQUIRE to specify “which” property or “which” address you talk about. Right now, I can say “THE” so and so house, and everybody will know exactly which one it is – simply because it’s the only one on the market. (and the “normal” properties move/sell faster than the buzz can travel across the city)

    [Editor’s note: Well said Sophie!]

  9. Inventory Months is a fairly easy statistic to calculate. It’s generally the number of active listings at a point in time divided by the number of pending sales at that point in time. This gives you a sense of sales activity over a period of time and how long it would take for all the inventory to deplete assuming a consistent rate of closing. I imagine it would be hard to calc the number accuratley in SF since houses tend to close pretty quick so you might take the total number of pending transactions in a 30 day period.

    Sometimes referred to as absorption rate — here is a more detailed post on the topic.

  10. good points sophie (bravo!)

    inventory of cookie cutter suburban tract houses and onerinconhill condos are relevant only when you are actually in the market for that product.

    stated another way- i don’t care how many soma lofts are on the market b/c it does not materially affect the availability or price of the sfr market in d7.

    or as Jules says in pulp fiction “sewer rat could taste like pumpkin pie and i still would’nt eat that filthy mfcker”

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